Startup Muster’s 2017 report highlights growth in an ecosystem that is focused on global talent

The fourth annual snapshot of Australia’s startup ecosystem has been released, painting a picture of a thriving scene which relies heavily on global talent, with some in the ecosystem saying the volume of international workers in the space shows how concerning changes to 457 visas could be.

Startup Muster’s 2017 report surveyed 2,214 respondents in the startup sector, with 1,184 who identified as a founder, 472 as “to-be” founders, and 739 as those who support the startup ecosystem.

This is the largest response Startup Muster has received from Australians to date, and the statistics reveal a great deal about the local sector.

Close to 22% of current startup founders are aged 35-40, and one-third of entrepreneurs who want to start something in the future are aged 25-35.

The number of female founders is continuing to trend upwards, sitting at 25.4% of those surveyed, which is up from 23.5% last year.

Thirty-seven percent of “future founders” are female. Thirty percent of founding teams are working full time on the startup.

New South Wales boasts the majority of Australia’s startup activity, with 44% of founders being based there, followed by Queensland at 20.8% and Victoria at 14.4%.

A massive 35.7% of founders reported that they were not born in Australia, while 16% of startups have employed an international worker on a visa.

Speaking to StartupSmart, FinTech Australia chief executive Danielle Szetho says the percentage of companies employing those on international worker visas was lower than she expected, but even so the numbers did not bode well in light of the government’s proposed 457 visa changes.

“I would expect the 457 visa wind back is actually what’s causing that decline in the number of foreign workers,” Szetho says.

“But in terms of the number of international founders, that’s no surprise. It’s in line with the broader Australian population, and it’s something we should be proud of, not something we should change.”

FinTech Australia chief executive Danielle Szetho

While Szetho says she understands the intention of the government’s changes to the 457 visa program, she believes they were executed too quickly and with little consultation or regard for the jobs companies need to fill in the future.

A “whole bunch” of new skills are constantly evolving through the development of new technology says Szetho, skills she says the government has not addressed in the list of eligible 457 jobs.

“We’re looking closely at when the next announcement comes from the government, and we’ll see if they’ve been listening to the startup community or not,” she says.

“The biggest issues facing Australian startups right now is a lack of talent.”

Fintech booming

Szetho is enthusiastic about the continued rise of fintech as one of the largest elements of the startup ecosystem, with 19.7% of founders saying they were in the fintech sector, up from 15.9% last year.

The next most frequently appearing sectors were education at 15.1%, and internet of things at 14.7%.

Additionally, 2017 has continued to see the rise of the blockchain, with 7.4% of founder identifying their startup as blockchain focused, compared to 3.4% in 2016. Szetho is similarly enthusiastic about these numbers, saying she was “really pleased to see it increasing”.

“The big fintech number is not a surprise, we knew fintech was going to come out very strong, but we didn’t expect it quite this strong,” she says.

However, fintech did see a drop in the number of startup support organisations targeting the sector, falling over 10% from 2016, and dwarfed this year by support for AI, IoT, and medtech.

“This diversity is important, as it provides startups with more and more intersection opportunities,” she says.

Improvements still to be made

“We have to improve on female participation everywhere, both in leadership and founders and just in general. Many of us in the startup community want to see those metrics go up constantly,” Szetho says.

Szetho would also like to see more numbers around how startups are taking on investment but is happy to see the statistics from Startup Muster back up last week’s AVCAL report, which showed total venture capital investment in Australian businesses was up 24% and 117 startups receiving capital in the last 12 months.

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