Silicon Valley’s VC sector birthed eight of the US’s 10 biggest listed companies. Australia’s new ventures have grown to $100 billion over the past 15 years – but have often found the local market broadly “hostile”. Now – days after Firmus pulled what was supposed to be the biggest float since Telstra – the ASX is looking to convince them to call the local bourse home.
This story features in Issue 25 of of Forbes Australia, out Monday.
It took SafetyCulture founder Luke Anear a full year of jetting between Australia, New York, San Francisco and London to cut the deals that formed his 2024 fundraise. Anear regaled a crowd at the Tech Council of Australia’s Summit last year with these travails, which produced a $165 million round.
When the floor opened for questions, Anear instead got a statement from ASX head of listings James Posnett. The $165 million that took Anear 12 months to raise, Posnett says, could’ve been accomplished in “one or two days” on the local bourse. Why not get on with it and list?
Anear’s response was polite but rote. There are many good reasons to list, including branding and stronger governance, but the time was not right. The subtext was clear – the start-up would not find itself on the exchange any time soon.
“It happens all the time,” Anear told me after the session. “They’ve been hitting us up for years.”
SafetyCulture gained traction as a simple checklist app for construction sites and manufacturing floors, and has grown into a sprawling compliance, training and insurance platform. Recently rebranded as “Mitti,” it would be large enough to debut in the ASX200 above household names like Virgin Australia and Bega Cheese if it retained its previous valuation of $2.5 billion.
The nation’s biggest start-up success story is Canva. Founded in 2013, it is Australia’s most valuable private company. Were the design giant on the ASX, it would be wedged between Woolworths and Telstra in the ASX20. Yet Canva co-founder Cliff Obrecht has said the company will list on the Nasdaq and has ruled out a dual listing.
Canva is not the only one prioritising alternatives. Just 12% of investors and founders ranked “listing on the ASX” as among the three exit strategies they deemed most likely when asked by Cut Through Venture for its 2025 State of Australian Start-up Funding report. After acquisition by a larger company, the most expected path is sale to a private equity firm.
Australia’s modern venture capital industry sprang up around 2012 when three firms – Blackbird, Airtree and Square Peg – began raising their first funds. The ecosystem is now home to 16 “unicorn” start-ups worth $1 billion or more. Private valuations can be specious – many cling to valuations earned in the frothy pandemic days –but their combined value is at last count over $100 billion. Take out Canva and that number falls to a still very large $50 billion. And that says nothing of the dozens of start-ups valued between $100 million and $1 billion.
This represents a lucrative opportunity for the ASX. The circumstances for a deluge of high-profile floats are forming, as venture capitalists and their investors demand returns and a flow of companies listing in the US signals renewed IPO interest.
The exchange, meanwhile, has had highly publicised troubles improving its financial infrastructure, and has seen its number of listed companies fall rather than rise. A fresh Chartered Accountants ANZ report states the number of companies listed has dropped from 2,012 in 2018 to 1,773 by 2024. A spate of techy newcomers could be a welcome injection of life into the ASX.
But there is a two-front war for these unicorns. The ASX must compete with private markets for Australia’s growing start-ups, and with US public markets for those that swelled into giants.
Related
The new era
In 2009, years before Australia’s start-up scene formed in earnest, Mark Zuckerberg was mulling a problem. Facebook was a prime IPO candidate, with more than 100 million users, but Zuckerberg did not want to cede any control of the company’s direction to shareholders. The start-up was then five years old, long in the tooth in those days, and hundreds of early employees were eager to cash in their shares.
The answer to his woes came via Russian investment firm Digital Sky Technologies (DST). It invested US$200 million for 1.96% of Facebook while springing an additional US$100 million to buy employees out of equity they no longer wanted – all without taking a board seat.
Chris Barter was leading Goldman Sachs’ Moscow operation at the time and remembers the bank rejecting DST founder Yuri Milner’s pitch on backing its Facebook punt. It was a mistake Goldman Sachs wouldn’t make twice.
“He came back to us. He said Zuck needed some pre-IPO capital, and would we consider doing an investment,” Barter recalls. Goldman Sachs went on to tip US$450 million into Facebook.
The deals were landmarks on the industry’s shift into the “private for longer” era. Facebook got a cash cushion, placated employees and delayed its listing until 2012. In exchange, it gave up a sliver of the company but relinquished no control. When it did go public, Zuckerberg said explicitly it was to provide liquidity to investors and employees.
The time from founding to listing had historically been short. Intel, among the first examples of what would today be called a start-up, went public three years after getting US$2.5 million in funding. That was the same amount of time taken in the ‘90s by household names Amazon and eBay. Netscape, the original internet browser, was private for just 16 months.
The funnel was clear: VCs backed an idea and, within a prime ministerial term, many of the successful ones would be acquired or have gone public. But deepening private capital pools have allowed that funnel to grow ever longer. SpaceX is the poster child for this trend. Founded halfway through John Howard’s stint in office, it floated earlier this year.
Australia’s modern start-up scene began in earnest around the time Facebook went public.
Now Goldman Sachs alumnus Chris Barter is part of that scene, having co-founded King River Capital in 2018. The firm’s headquarters are in Sydney, but it has investors in San Francisco, and its investments are split 50-50 between the two countries. Barter acknowledges the tech-heavy Nasdaq has its problems but says the ASX is difficult terrain for tech companies to navigate.
“It’s an entirely hostile landscape to list as a technology company on the ASX,” Barter says. He points to the lack of institutional following for tech stocks and says fewer institutions are prepared to support loss-making tech companies, even if they’re fast-growing.
“There are companies that if they were to list, they would really have to list on [the] ASX because they’re domestic businesses,” Barter says. This applies to some of King River’s portfolio companies, he says, which the firm would prefer to exit via acquisition, or another means rather than floating on the ASX.
Forbes Australia asked Barter if the ASX crosses his mind when discussing exits with portfolio companies.
“No,” he said. “No it doesn’t.”
First Funding > Public Market
How quickly major tech companies went public
Elapsed years between first funding and IPO or direct listing
(selected companies)
Years from first funding to public listing
PE, VC
The funnel between venture capital and public offering that gave the United States eight of its ten most valuable companies has thus far not existed in Australia. Xero and Afterpay have proven that tech companies can list early in their lives and enjoy enormous investor backing. But founders of both say they listed in absence of venture capital, not instead of it.
“Xero listed on the New Zealand Stock Exchange less than one year into its life; it had about 100 customers, and it raised $13 million,” says Airtree partner James Cameron. “That is unheard of, and for good reason. It worked out terrifically for Xero, but you typically don’t want companies listing that early.”
Airtree illustrates the explosive growth of Australia’s VC funds, and how that in turn means in-demand entrepreneurs don’t need to rush to float. Airtree raised a record $60 million for its first fund in 2014. Less than a decade later it raised $700 million for its 2022 vintage.
Airtree went on to lead SafetyCulture’s $165 million raise in 2024. That round included $75 million of fresh capital, and $90 million of secondary sales where early investors and employees sold equity to new backers. It’s Mark Zuckerberg’s world, and we’re just living in it.
As VCs can increasingly write IPO-sized cheques, it is becoming more common to see private equity firms on start-ups’ cap tables. KKR, a global juggernaut, bought a stake in HR platform Employment Hero from Seek earlier this year, and Quadrant purchased $100 million worth of Canva shares from Blackbird in 2024.
Yet if Cameron celebrates founders not feeling undue pressure to list, the financial watchdog points out there are drawbacks. The then ASIC chair Joe Longo name checked Canva specifically in his November speech to the National Press Club, in which he lamented the meagre transparency obligations of private companies.
“Is it right that companies like that are subject to more limited disclosure obligations than for a much smaller public company?”
ASIC wants more companies going public. But the handful of VC-backed start-ups that have listed have produced mixed results. The closest thing to a success story is Siteminder, which trades at a market cap around $1 billion after listing around that in 2021. Others like Airtasker and Redbubble are fine businesses but, with valuations around $100 million, are hardly contenders for Australia’s Magnificent Seven.
None of Australia’s VC-backed unicorns has listed on the ASX. Cameron is sanguine, however. The next five years, he says, will look far different to the last.
“The number of years from company birth to IPO has grown to about 14 years,” Cameron says. “To put that into perspective, the Australian tech-VC ecosystem has only been around for less than 12 years.”
“IPOs in any market are a lagging indicator of the ecosystem’s health… many [portfolio companies] do have active plans to go public, and many of them will be on the ASX.”
Apples and Oranges
Cameron’s optimism about the ASX has not always been shared by his VC colleagues. Several who spoke asked to remain anonymous so they could speak freely without damaging their portfolio companies.
The essence of their criticism is that the Australian market does not fully appreciate great technology companies. One investor points out that the ASX’s tech index is up -14% over the past five years, while the Nasdaq has boomed 42%.
“I think there is a lack of belief amongst ASX investors that Australian technology companies are global leaders and have an opportunity to be winners,” a partner at an Australian VC firm says. “There are companies that are ASX listed that are really outstanding globally.”
Successful tech companies on the Nasdaq are covered extensively by analysts, who, if impressed, sway institutional investors to buy in. Accounting giant Intuit lives around spot 50 on the Nasdaq and currently has 36 analysts. Xero occupies a similar spot on the ASX but has about one-third the coverage. This extends over to the funds themselves.
“Most fund managers in Australia are generalists, except in resources,” the VC partner says. “They will have two or three people internally who watch over tech companies, but they’re nowhere near the capability of US fund managers.”
It is no surprise, then, to see Anglo-Swiss mining giant Glencore plan an October float on the ASX – Australia’s investors reward well-run resource companies as well as any other country on the planet.
The ASX argues that critics have it backward, however.
ASX General Manager of Listings James Posnett, the same one to pitch SafetyCulture’s Anear last year, says in an interview that analyst coverage is in fact a selling point for the ASX. He says that Siteminder has 18 analysts at a market cap of around $1 billion – far more attention than a company of the same size would receive in New York. Better to be a small- or mid-sized tech company on the ASX than the Nasdaq.
“I’d love to get the people that say the ASX investors don’t understand tech in the room with Fidelity’s [Australian] portfolio manager,” Posnett says. “I’m pretty sure they’d disagree.”
The matter of ambitious multiples is also more complex. It is true that tech companies with an “m” at the beginning of their market cap denomination can trade at comparatively measly multiples to peers abroad. But once a software company breaks through, Australian investors seem happy to buy into the dream. Xero, for instance, trades at a higher revenue multiple than Intuit.
“The average tech cohort size in the US within the top 500 companies is about $350 billion,” says ASX senior manager of listings Amit Verma. “You can’t compare those companies with a $500 million company in Australia. They’re not comparing apples to apples.”
The ASX is hoping to attract growing tech companies with the allure of indexation. A company is big enough to enter the ASX200 at $1.1 billion. The comparative thresholds for the Nasdaq 100 and S&P500 are both over US$20 billion.
Meanwhile, the argument Posnett gave Anear – that raising capital on the ASX is less of a hassle than doing so privately — has proven a convincing one. NextDC raised $1.5 billion from equity sales in April before racking up $1.1 billion through convertible notes in September, while Megaport in June capped an $827 million raise via the bourse.
“There are more and more companies reaching a scale that could be listing candidates,” Posnett says. “We’re certainly seeing quite a number of companies that Amit and I are speaking to that are on the way or going to list in the near term and medium term.”
The question of timing, however, has almost never been harder to answer.
Private Capital Vs Public Markets
Australia’s biggest start-up rounds tower
over the average tech IPO
Selected Australian start-up funding rounds compared with the average ASX tech IPO.
Headline round or issue size ($ millions)
The AI of it all
Artificial intelligence has wreaked havoc in the software industry this year. The market has in effect thrown a gauntlet down to tech companies, demanding proof that their business models can remain viable in a world where AI is ubiquitous. Tech champions like Salesforce and SAP endured massive sell-offs, though in recent months have recovered. Others like Monday.com and Xero are still licking their wounds.
It is a challenge private companies need to overcome too, even if no daily price ticker charts the effect of their persuasions. That much was proven when Canva’s backers wrote down the company’s valuation by 17% to US$34.9 billion.
Figma offers a cautionary tale. With a market cap of US$12 billion, it is bigger than any Australian unicorn save Canva, yet that is down over 80% since its stock price peaked shortly after its July 2025 listing. The market has judged AI a headwind for Figma rather than a tailwind. That is despite the company reporting year-on-year revenue growth of 48% in August, as Swell Asset Management’s Lachlan Hughes points out, the company has beaten market expectations for the past three quarters. Meanwhile, SpaceX briefly traded at a stunning 96x multiple of its annualised revenue, hitting US$3 trillion despite still operating at a loss.
“It’s probably the most casino-like I’ve ever seen the markets,” says Hughes, whose fund owns Figma. “At the moment the animal spirits are driving the market prices. You’d be best off staying private as long as you can.”
SafetyCulture founder Anear was first to admit that probably only a handful of Australian start-ups are ready to tackle this turmoil. Were SafetyCulture to ever list, he says, it would need to be on a growth trajectory that would continue years beyondthe float.
Speaking in August of 2026, Anear was notably upbeat about the local bourse. Tech investors, journalists and founders themselves have learned more about how the industry works, and now “the ASX is in a better position than it’s ever been.”
Anear says listing was not happening in the near term, and indeed specifically declined to say where, when or even if the company would list. But, were the ASX to live pitch a listing at the next summit, it may get a warmer reception.
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