Australia and New Zeeland is a long way from Silicon Valley, but the problems and circumstances of its risk environments tend to be similar in nature.
Mega deals are increasingly rare today, seed funding has increased, valuations have come back down to earth and investors are encouraging their portfolio companies to demonstrate a sustainable business with a clear path to revenue. The difference is that the geographic isolation of Australia and New Zealand creates a sense of hustle, if not urgency, around fundraising and building a global product.
The Australian and New Zealand startup ecosystems are newer and less robust, and their markets are generally smaller than those of their US, Asian and European counterparts. As such, startups here have a greater need to access not only international markets but also foreign funding, particularly if they operate in capital-intensive industries such as deep tech, and for later-stage rounds.
“For the vast majority of Australian and New Zealand companies, their main markets tend to be overseas,” Dan Krasnostein, partner at Square Peg Capital, told TechCrunch+. “Having investors from these markets at the cap table can be helpful in growing and building local teams in those markets, or finding clients.”
More than a weakness, startups from these countries have turned this set of circumstances into a strength. They know how to exceed their possibilities and they know that they have to create a global product from day 1.
