blog It used to be that the most that Australian software companies could pick up in capital raisings was a few hundred thousand to a couple of million. Complaints about the impossibility of raising a decent amount of venture capital were constant and loud. Wow. How times have changed over the past few years. As today’s piece of evidence that money is truly flowing in the streets for Australia’s growing cadre of technology firms, we present the news that fledging Australian software group Marketplacer has just raised a whopping $10 million. From the Financial Review (click here for the full article):
“Australia’s highest profile small cap fund manager David Paradice has led a $10 million funding round for Melbourne-based technology company Marketplacer, as it plans to take its software solution for online marketplaces to an international audience.”
To be honest, I don’t know what to make of this. On the one hand, Marketplacer’s investors are right — online ‘marketplaces’ are taking off in a big way, and it’s always a good idea to sell shovels in a gold rush. Plus, this is yet more indication that Australia’s tech startup scene is attracting the big money these days from investors.
However, there’s also quite a bit more to this story than is being told today. Marketplacer might appear to be about to explode onto the scene with its software, but the company has actually been around since 2007, when it was originally founded as BikeExchange, a site which allows people to sell and buy bikes and biking gear.
It looks like what has happened here is that the company developed BikeExchange, was successful with that, then became The Exchange Group, launched other similar sites, and then gradually pivoted into providing their underlying software for sale to others.
There’s nothing wrong with this (it’s awesome!), but at the same time, it doesn’t appear to me that Marketplacer as yet has a substantial independent customer base for its software. Can it truly be worth, as the AFR has reported, $70 million in total? How much of this valuation is based on its own sites, such as BikeExchange, and not the software it owns or customer contracts to use that software?
Its website is quite … sparse. In addition, all of the marketplaces it appears to have publicly created so far look pretty much identical — which makes me wonder about the flexibility of the platform.
But enough of the quibbling. Apologies — I’ve just seen too much turbulence in Australia’s startup ecosystem to go into things without an open mind. In general, this news is still fantastic, both for Marketplacer itself as well as the technology startup scene in Australia generally. I hope that Marketplacer can live up the hype and become the next Atlassian or Freelancer.com. It will be great to see a home-grown Australian success story like this take things to the next level.