Startup Opinion

The (not so) secret rise of Melbourne as Australia’s tech capital, according to a Silicon Valley Insider

Dana Stalder /

Inside Melbourne’s high-rise towers, small offices, and co-working spaces, and behind historic building facades, a digital revolution is taking place. Over the past few years, the city’s burgeoning technology industry has placed the city well and truly on the map as a destination for global innovation, and has earned it the title of Australia’s tech capital.

It is now home to more than half of Australia’s top 20 technology companies. With more than 8,000 technology businesses operating in Victoria, the industry generates $34 billion in revenue each year, employs about 90,000 people, and accounts for approximately 31% of Australia’s entire ICT workforce, according to InvestVic.

Buoyed by strong demand for tech talent, the future looks optimistic for the Australian tech sector, which has seen an influx of global investment following a recent multimillion-dollar boost from a number of international tech giants.

Matrix Partners has three investments in Australia: Zendesk, the global customer-experience software company with Danish origins now headquartered in San Francisco; Afterpay, a Melbourne-born fintech startup that has recently expanded into the US; and Canva, the Sydney based graphic design marketplace.

During my recent visit to both Zendesk and Afterpay’s offices in Melbourne, I was reminded of something I have known for many years: Melbourne truly is Australia’s technology hub. However, a strong focus on attracting talent, both locally and from abroad, will be its secret sauce to continue an exciting upward growth trajectory.

From a US point of view, Melbourne’s reputation as the tech-epicentre of Australia keeps growing, largely based on its quality of technology and engineering talent, and for supporting companies to help them accelerate their growth. Come to think of it, I would be curious to see if this acceleration of talent development and company growth also correlates with the city’s availability of unmatched world-class coffee.

Humour aside, one of the most important growth factors for Melbourne’s economy is its continued investment in promoting STEM studies and careers, and preparing its workforce for what the next century will look like, based on the rise of the digitalised industries of the future. At Zendesk, technical recruiting has become a key strategic priority, with a large global talent team dedicated to this one function. Businesses that make it a strategic priority to attract the best talent, and resource it accordingly, are the ones that I have seen thrive.

A leading factor in the growth of Zendesk’s Melbourne operations stems from the company’s continued investment into finding and fostering local and global talent. Last year, the number of employees across its entire ANZ business grew by almost 50%. This saw more than 300 people in both engineering and go-to-market roles — which includes sales, marketing, legal, operations, human resources, and finance — spread across Melbourne’s HQ, as well as expanding and establishing teams in Sydney, Brisbane and Auckland.

Key to Zendesk’s talent growth and investment in Australia has been its ongoing partnerships with the Victorian government through programs with InvestVic and LaunchVic. Fostering these kinds of partnerships with government, academic, community and industry bodies helps bolster a city’s business ecosystem, ultimately driving job creation, innovation and continued international investment.

In recent years, the Victorian government has championed Melbourne’s growing tech sector, and has encouraged the expansion of business relations between the US and Australia. Welcoming Slack to Melbourne in 2016 is just one example of this. It’s this commerce exchange that has been most successful, and a significant contributor in attracting investment from the US to Australia.

As tech companies continue to compete for talent, with the number of roles outnumbering the number of graduates, it will take much more than trawling LinkedIn, making phone calls, and sending emails to hire the best.

Melbourne is a city that produces more IT graduates than any other Australian city, and is ripe with opportunity to nurture, grow and attract global talent, and will continue its rise as a true hub for technology and innovation.

The future of technology in Australia is exciting, and that future is coming from Melbourne.

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Dana Stalder

Dana is a general partner at Matrix Partners, and sits on the board of directors for various startups, including Zendesk, Afterpay, Earnin and Lever.