Australia’s second dot com boom is here


blog Evidence is mounting on a variety of fronts that Australia has just entered its second dot com boom, with a spate of recent articles highlighting the growing intensity of the technology startup sector — which bubbled away nicely during 2010 and looks set to hit boiling point in 2011. From SmartCompany comes a nice little feature by veteran technology journalist Brad Howarth, who has tracked the local startup sector for years:

“It’s the sort of spending spree that’s bought back memories of the dot com boom. In the last six months, a host of local and overseas investors have poured more than $300 million into 18 of Australia’s leading web start-ups. But there is one very important difference between this spending binge and that which preceded the dotcom bust in 2000 – most of the companies are already making money.”

Howarth’s thesis — which he backs up with quotes from local tech startup luminaries like Mick Liubinskas and Niki Scevak — is that there’s a flood of money flowing into the sector, sizable exits such as the Spreets sale to Yahoo!7 have started to occur, and the local activity is mirroring what has happened in the US over the past few years — as chronicled by a clutch of popular sites led by TechCrunch.

This view of the industry is echoed by Roger Kermode, an Australian early stage company specialist, who has published an extensive article detailing “Why Australia is fast becoming a hot place to do startups”. Kermode kicks off the article:

“Australia’s entrepreneurs have long lamented that if you really want to create a successful global technology startup that you have to leave Australia and go to Silicon Valley. It’s just too hard to do startups in Australia, they say. The market is too small, there’s no big tech companies doing real product development here (it’s just Sales and Marketing), the government doesn’t support tech startups well enough … Well guess what? I think that the tide has turned and that Australia is about to become one of the next hotspots for startups.”

Among Kermode’s arguments are the facts that Australia’s economy is still strong compared with other nations, our residents love technology, it’s cheap to start a company here, the broadband market is developing fast, and startup incubators and capital are springing up everywhere.

We couldn’t agree more with this. There’s never been a better time to start a technology startup in Australia; if you’ve been holding off waiting for that perfect moment, you should jump in right now and get your feet wet.

Image credit: Rob Chandler, Creative Commons


  1. “But there is one very important difference between this spending binge and that which preceded the dotcom bust in 2000 – most of the companies are already making money.”

    If funny how every time is different from the last. Trust me, companies that make money can still become over valued and become apart of a bubble. Not that I begrudge Australia getting noticed for it’s tech startups. I hope that will continue to happen. The culture and economy here is great for producing start ups.

  2. aust, startups?? dont make me laugh. Wishful thinking really, Check out the indian companies being snapped up by huge asian internet conglomerates like Softbank Japan (who owns a huge slice of Yahoo). They have no interest whatsoever in Australia. Aust should stick to agriculture before we lose what we were once good at..

    • I’ll admit we don’t have the startup scene of the US but ‘stick to agriculture’ ? That’s like saying that the US should stick to making cars. Times do change. Australia is good at innovation and that should be fostered. By the government and by companies.

    • I think it’s safe to say that almost every reader of Delimiter is likely to disagree with your comments here, Joe. I’d back out while it’s still safe ;)

    • “Aust should stick to agriculture before we lose what we were once good at..”

      Failed at agriculture as well because of the drought. I wonder what they are going to do when the resources boom goes bust. Tourism perhaps.

  3. There was no dotcom boom or crash in Australia. It is strange that there were no dotcoms actually involved in what was really referring to the NASDAQ crash Marchl 2000. The NASDAQ exchange is not limited to Dotcom or ICT companies. Try explaining that there was boom to those unemployed at home starring at four walls and eating peanut butter out of a jar.

    In reality the cause was scandalous accounting practices by the likes of Enron, Aurthur Anderson and the “new economy”. None of these enterprises were dotcoms. For those who were actaully at the coal face then (even in America) it was a mere blip on the radar.

    Prior to this (c.1999) the Liberal government, in concert with their corporate supporters, sold out and displaced 1000’s of highly experienced ICT professionals replacing them with 1000’s of cheap and inexperienced labour using the 457 visa.

    This resulted in a mass exodus overseas by many professionals and many remember the hell and will never return.

    • What a load of croc Renai I do clearly remember. I have been in ICT since 1978. I clearly remember filing fortnightly forms at CentreLink.

      As a result I will never work in ICT in Australia again – I have moved on to more lucrative occupation, but still watching.

      Wake up! One.Tel was not listed on NASDAQ. The ASX was not affected much.

      • Hmm. I think we’re kinda arguing cross purposes. In Australia, the dot com crash wasn’t really about the ASX, although some companies there were affected. It was about innovative local tech startups. Sorry to hear you’ve left ICT — and I know what it’s like to fill out those forms at Centrelink, I’ve done it myself from time to time :(

        Anything we can do to entice you back? ‘Systems administrator’ is still an honourable job title ;)

        • “Anything we can do to entice you back?”

          No fringing way – Ten years too late

          The NASDAQ crash did cause a small global economic downturn and Australians were affected – It is well documented that ENRON was the culprit. Nothing to do with Dotcoms – even in America.

          • Only to a certain extent, Renai. My only tech. interest these days is in Second Life which conforms to my idea of innovation and my interest in the Metaverse.

            I use Second Life as a social network and development platform and soon a business platform although I currently derive an income ($US). I am also a mentor, sim builder, object creator, scripter, texturer and virtual world DJ and male dancer at Moulin Rouge in Second Life.

          • Ten years is enough time for anyone to go to university and get a degree and enter the workforce under a different guise. Perhaps that is why Australia is 10 years behind.

      • I couldn’t think of a more boring and risky industry to be involved in. Even school leavers know this and student entry into University is drastically reduced and many of the facalites no longer exist some even merging with accounting etc.

  4. Australians do not posses the leadership, attitude, social climate, innovation and capital it takes to make a successful ICT company or any product to hype.

    There will never be a Dubai Internet City or Silicon Valley here. That Internet ship sailed right on by some time ago.

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