Victorian startups employ 41,500 full-time staff members, reveals latest LaunchVic report

Victoria’s startup agency LaunchVic has identified 1,300 new firms across the state in its latest report released this morning, reflecting a strong pipeline of new ventures since its previous report in 2020.

In fact, Victorian startups are more innovative, more mature and more diverse in comparison to the 2020 data according to the 2022 Startup Ecosystem Mapping Report — the fourth report of its kind developed by LaunchVic.

The report also found there is now a higher proportion of larger startups in Victoria, with 32% of firms now having 10 or more employees compared to 21% in 2018.

LaunchVic CEO Dr Kate Cornick said the findings of the report vindicate LaunchVic’s strategy to aggressively invest in programs to support new and more innovative startups to be created and help existing startups scale.

“The impressive growth rate of the ecosystem, demonstrated by the number of new startups coming to market, the increase in innovation, and the growth of larger firms are extremely positive for Victoria’s future,” she said.

Between 2018 and 2022 the share of Victoria’s startups aiming to create a new market more than doubled, from 24 to 58% of all firms surveyed.

The number of first-time founders has also jumped by 20% since 2020, increasing from 44 to 53% of all founders. 

Firms with at least one-woman founder have grown from 20% in 2020 to 34% in 2022, however they still only represent 22% of founders across all firms, which suggests that in firms that have both men and women founders, male founders are outnumbered by a ratio of 2:1.

The report sights that firms with a woman founder have a significantly smaller median firm capital raise.

Cornick said more needed to be done for women founders and their startups. 

“It’s exciting to see the number of women-led founders increase but there is still work to do to ensure that women founders and their firms reach their full potential. LaunchVic is committed to increasing access to capital for women founders in the startup ecosystem through initiatives such as the Alice Anderson Fund,” said Cornick.

The report also found that, in total, Victorian startups employed more than 41,500 full-time staff members in 2022 — a 13% increase from 36,695 full-time jobs in 2020.

An estimated $4 billion in total capital was raised by Victorian startups and scale-ups in 2021, from both venture and non-venture capital sources such as corporate investment and debt financing. There was also growth in deals worth more than $1 million and a decline in smaller raises since 2019.

These findings are consistent with LaunchVic’s State of Startup Funding Report released in December 2022, which revealed Victorian startups raised a record $2.3 billion in venture capital funding in 2021. However, this report showed that much of the growth is in later-stage capital raises (Series B and beyond), while early-stage funding continues to flatline. 

There has also been an increase in participation in accelerator programs according to LaunchVic’s report, with a third of startups surveyed participating in accelerator programs in 2022, which is up from 27% in 2020.

The report also shows that 88% of startups have a founder with at least two years of prior work experience in a relevant industry and 83% of firms have at least one founder with a business degree or at least two years’ experience as a manager.

“More needs to be done to drive research commercialisation into startups. We must recognise that most founders have commercial experience, so more needs to be done to connect commercial expertise to university research commercialisation opportunities to generate new startups from our universities,” said Cornick.