East coast private investment dwarfs support for SA business

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Billions were poured into growth-stage companies on the east coast last financial year, easily trumping the $231 million invested into South Australian companies.

A new report from startup and tech data repository Techboard demonstrates the stark difference between attention received from venture capital firms by scaleups on the east coast compared to South Australia.

The report – ‘Funded in 22’ – found $213 million was invested into South Australian companies by investment firms last financial year.

This compares to the whopping $4.39 billion pumped into New South Wales-based companies, $1.55 billion into Victorian firms and $551 million handed to those domiciled in Queensland.

SA did beat out Western Australia which received $166 million in funding, while the ACT got $103 million, $33 million in the Northern Territory and just $12 million for Tasmania.

The $213 million in 2022 was almost double that received by South Australian companies in 2021 ($135.92 million) and well up on the $35.99 million invested during 2020 taking into account impacts of COVID-19.

Most of the investments were below $1 million, while eight companies received funding around the $1 million to $5 million mark. Two companies locked in rounds worth between $50 million and $100 million, and another two received between $20 million and $50 million.

Nationally, Australian startup and tech companies collectively raised the second highest ever annual amount of private investment of $7.035 billion.

This was down from $8.888 billion in 2021, “mostly driven by a drop in the number and scale of mega-deals” according to Techboard which considers $50 million-plus a “mega deal”.

“The slowdown began post March 2022 with the demise of the ‘Unicorn’ Months of $1b private investment,” Techboard said.

“Although we have seen a tentative recovery from August 22, the year unfortunately closed on a flat note with a drop in funding again in December.”

Female-led businesses received a bit of a boost in funding, albeit from the low base of sub 1 per cent of total funding in 2021. This year, 2.42 per cent of all private capital went to solely-women led ventures.

New South Wales-based businesses had the lion’s share of investment though, with 20 of the 27 ‘mega-deals’ going to those in the nation’s engine room. It helps that of the 481 investors identified by Techboard, 49 per cent are NSW based.

Source: IN Daily