Scottish author Sir Arthur Conan Doyle — best known for the Sherlock Holmes series — said it was a capital mistake to theorise before one had data. Today, data drives the decisions of business, and of startups, but when it comes to data on what makes the Australian ecosystem tick, it’s hard to draw any real conclusions.
While startups now apply Artie’s philosophy of constantly testing and iterating using user analytics, we haven’t yet been able to apply the same science to the broader ecosystem: the incubators, accelerators, investment funds, startups, and people who help shape Australia’s ‘Silicon Beach’.
Without understanding those trends, it’s hard to say exactly what’s needed to ensure more than five percent of Australian tech companies scale (currently the case according to the Startup Genome project). Anecdotally, we can assume the wrap-up of the IIF program, the lack of government co-investment schemes and tax constraints will affect the performance of the Australian startup industry but without good data, testing that assumption is hard.
Recently, FLT has been hunting for data about the number of investments, at different stages, which have taken place in the tech space over the past couple years. We thought this information would be useful to help understand the type of companies attracting investment, and the implications for startups currently building companies, and potentially looking for funding. But, as we’ve found, it’s not easy to find any comprehensive data.
We were initially prompted by renewed hype in Silicon Valley about the so-called Series A crunch (Pando Daily story here), or ‘ the angel boom’ as it’s been dubbed by others. Most of the discussion has been qualitative, although some interesting data has emerged (this article on Forbes has some telling stats) — it shows the number of angel deals skyrocketing, with little change in the number of Series A investments.
However, rather than succumb to the same sort of speculation, we were keen to see whether there were key factors that set aside companies which raised Series A rounds in Australia. There must be — we wanted to find out what they were. However, we were hamstrung by the lack of good data.
The problem stems from a lack of consistency in the tracking of startup deals. According to Jordan Green, Chairman of the Australian Association of Angel Investors, other countries have better data, because of the involvement of government in early stage deals. Once government is involved, these things are tracked.
“Like similar research done in the USA, Europe and most other places the data (in Australia) remains indicative rather than authoritative,” says Green. “Countries like New Zealand and Scotland get better data because they have good tax incentives and/or government co-investment funds.”
We thought we’d share with you the data sources we’ve found so far, and we’re keen to find ways to collect better data about startups in Australia, so if you’ve got any suggestions for data FLT could capture, please ping us.
Fewer than 5% of Australian companies scale. How can data help improve this figure?
Internet DealBook
Australian company, Online Agility, runs the Internet DealBook database, which captures data on the top internet deals around the world each week. The Internet DealBook also has a weekly newsletter which summarises recent deals which have taken place. We asked the DealBook team to run a report on the Australian companies which received investment, or were acquired in 2011 or 2012 — here’s the report:
AVCAL
The Australian Private Equity and Venture Capital Association produce a number of research publications each year which look at deal flow in the VC and private equity (PE) space. It recently released its Deal Metrics Survey for 2012. We asked AVCAL to crunch some numbers on the number of tech deals in the past few years:
AAAI
The Australian Association of Angel Investors produces an annual review of angel investment each year. It’s based on survey responses received from Australian investors. The results are only indicative, but they do provide a good snapshot of the state of investment. Here are the reports from the past few years:
- AAAI 2010 National Angel Survey
- AAAI 2009 National Angel Survey
- AAAI 2008 National Angel Survey
- AAAI 2011 National Angel Survey
ABS
The Australian Bureau of Statistics produces a yearly review of venture capital and later stage private equity deals. While it’s not limited to tech, there is quite a bit of data contained in these reports. The latest report shows a significant slow-down in VC activity, with most of the committed funds being used. You can find the research on the ABS website.
Where is the money?
Andrew Stead, Director of Business Development at ATP innovations, also produces a round-up of startups investments each year. Here’s an infographic showing the findings of his March review. FLT also wrote a post in November, following his latest assessment.
Norton Rose
Business law firm, Norton Rose, tracks mergers and acquisitions across technology, media and communications. Nick Abrahams, who curates this list, also publishes research for the company.
We plan to do some more detailed analysis on some of the data we’ve tracked down in the past few days, but we’ve decided to share what we’d found. Know of any other good data sources on the Australian startup ecosystem? Let us know.
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