STARTUP ECOSYSTEM PRELIMINARY REPORT

STAGE 5 - ASX*
AUSTRALIAN STOCK EXCHANGE
Australian has the world’s 3rd largest investment
fund asset pool with over $1.6 trillion of funds
and over 2,100 listed companies spread over
a range of geographies and sectors. By freefloat
market capitalisation the Australian Stock
Exchange (ASX) ranks 2nd in Asia and 5th in the
world, and consistently ranking in the world’s top
5 exchanges for capital raising. It is a gateway to
global capital given that 45% of investors on the
ASX are international. 52,53
TECH STOCKS
In foreign developed markets technology is seen
as a good investment option and an important
hedge against disruptions to traditional sectors.
In the US public market technology companies
are very well established, with the ICT sector
now making up 20% of the S&P 500 index - a
larger sector than financials or healthcare. The
NASDAQ Internet Index has returned 17.9% per
annum over the past four years and is one of only
two sectors rated Outperform by Schwab. 53
In comparison the market capitalisation of
Information technology companies listed on
ASX represents only 0.8% of the ASX 200, and
Telecommunications slightly more at 5.4%. This
compares to financials comprising 47.7% of the
ASX 200 (Aug 2015). 54
However, investor interest in tech stocks, both
small and large cap, is increasing with over 141
technology and telecommunications companies
listed on the ASX. Many Australian investors
are looking to gain exposure to the technology
sector, recognising that the industry breakdown
in Australia is likely to trend towards other
developed markets over time. The S&P/ASX 200
Info Tech Indices has outperformed the S&P/
ASX 200, with price returns over the last 10yrs
of 8.53% compared to the benchmark S&P/ASX
SMALL CAP FUNDING
The ASX has a long history of funding and
listing early stage companies, particularly those
in the resource & energy sectors. But recently
technology, media and telecommunications have
been leading new listings with 47% of listings
and 27% of all IPOs leading the listings by sector
in the first half of 2015. Tech companies are also
taking advantage of failing resources companies
using these shell companies to facilitate Reverse
Takeovers (RTO). 56
WA STARTUP ASX LISTINGS
This report identified 10 listings by early stage
digital and internet technology companies based
in Western Australia – all within the past 2 years.
Raising a total of $49 million and an average of
$4.9 million per company. Six of the ten have seen
share prices increase since listing with 1-Page
radically growing its share price over the 3 years
since listing. Many are still in the research and
development stage with almost all having revenue
under $1 million per year in the 2015FY with
the exception of Rewardle which recently began
to monetise its merchant loyalty network. While
it appears early for these startups to raise the
challenges involved with raising within public
markets and the downturn in resources conspire
to create a situation where Reverse Listings are
an attractive option for early stage technology
companies.
*Please note while we have included information
about startups listing on the ASX as Stage 5 in
the report, the current data shows these startups
listing on the ASX at an earlier stage, especially
in terms of revenue, than those in Stage 4 that are
rasing money from Venture Capital firms. As far
as we could identify those that raised money from
Venture Capital firms had average revenue above
the average revenue for listed startups.
NO. ASX LISTED COMPANIES BY GICS
INDUSTRY GROUP 57
Materials
712
Energy
247
Not Applicable
215
Diversified Financials
132
Software & Services
112
Capital Goods
99
Real Estate
84
Pharmaceuticals & Biotechnology
74
Health Care Equipment & Services
74
Commercial Services & Supplies
63
Consumer Services
56
Retailing
49
Food, Beverage & Tobacco
40
Media
37
Utilities
28
Classification Pending
28
Technology Hardware & Equipment 26
Telecommunication Services
25
Consumer Durables & Apparel
24
Transportation
22
Insurance
14
Banks
14
Automobiles & Components
8
Household & Personal Products
6
Food & Staples Retailing
4
Semiconductors & Semiconductor Equipment 3
200 of 1.62%. 55 TOTAL EQUITY CAPITAL RAISED BY EXCHANGE 2009-2013 (US$B) 60 $886
TOTAL INVESTMENT FUND ASSETS BY
COUNTRY (US$B) - 2014 60
United States
$14,306
Luxembourg
$2,872
Australia
$1,647
France
$1,491
Ireland
$1,387
United Kingdom
$1,101
Brazil
$1,072
Canada
$912
Japan
$782
China
$420
New York Stock Exchange (NYSE)
Hong Kong Stock Exchange
London Stock Exchange
NASDAQ
Australian Securities Exchange (ASX)
Japan Exchanges
Shanghai Stock Exchange
Toronto Stock Exchange (TSX) & Toronto Venture Exchange (TSX-V)
BM&F Bovespa (Brazil)
Shenzhen Stock Exchange
Singapore Stock Exchange
$333
$291
$241
$241
$200
$178
$178
$157
$147
$54
28