Home' Forge : Vol 1 No 1 Contents FAST LANE // 9
More tech IPOs good news for investors
Few initial public offering (IPO) trends are more encouraging
than the rise of tech companies raising capital and listing on the
Australian Securities Exchange (ASX). If Australia is to develop
the equivalent of Facebook, Google, Twitter, Airbnb or Uber, it
needs a vibrant sector of listed fast-growth tech companies.
Tech companies have low representation on the ASX, unlike
other global exchanges. The S&P/ASX 200 index – the key
barometer of Australian shares – has more than 60 per
cent weighting in finance and material stocks. By market
capitalisation, tech stocks barely register.
This low weighting is reflected in fund holdings.
Morningstar data shows that international equity funds
had 13 per cent invested in tech stocks in early 2015.
Australian equity funds allocated around two per cent of
their portfolios, on average, to the tech sector. They had a
whopping 35 per cent in the finance sector – principally
the big banks – or almost double the weighting of
international equity funds.
A small tech sector is a problem for long-term investors
such as self-managed superannuation funds (SMSFs). Those
with multi-year or multi-decade investment horizons want
exposure to growth industries of the future, and potentially
the next star tech stock.
The good news is a sharp rise in tech listings on the ASX in the
past two years. Although it’s small, relative to a $1.8-trillion
share market, more tech IPOs are providing new choices
for investors. This suggests that high-potential, early-stage
companies increasingly see the ASX as a source of equity
capital much earlier in their journey, and are unfazed by higher
regulatory and compliance obligations.
Tech listings in 2014 collectively raised more than
$700 million of equity capital. They included iSentia Group’s
$284 million IPO, 3P Learning’s $282 million capital raising, and
vista Group International’s $83 million IPO. Floats of 8common,
BPS Technology, Urbanise.com and Rewardle Holdings were
others. Several larger IPO floats, such as WiseTech Global, are
expected to float this year.
Chief executive officer of Freelancer Matt Barrie says that
Australian technology companies raised more capital via IPOs
on the ASX than through venture capital last year. Private
equity and venture capital have been the traditional funding
options for the tech sector, but companies such as Freelancer
are showing the benefits of listing earlier, rather than going
through several extra rounds of venture capital funding.
Forge’s profile of Freelancer CEO Matt Barrie starts
on page 23.
Collaboration in life sciences research
The conventional view of university life sciences
research is academics working in isolation in
laboratories and producing theoretical research.
The reality is a stronger multidisciplinary focus,
universities working closer with industry,
and a greater emphasis on applied research.
This multidisciplinary approach is a key theme
in Forge’s extensive life sciences report in this issue.
Universities recognise that complex life sciences problems are usually
solved through a cross-discipline approach in which researchers from
different fields come together.
The University of Sydney’s Charles Perkins Centre, opened in 2014,
typifies this approach. It has brought together world-class researchers
from a range of fields to combat obesity, diabetes and cardiovascular
disease. Having dieticians working with medical researchers, economists,
philosophers and other health-related experts has incredible innovation
potential. The University of Melbourne’s Bio21 Molecular Science and
Biotechnology Institute has a similar multidisciplinary approach. The
prestigious centre is expanding its pioneering open-innovation platform,
deepening industry engagement and taking a stronger global focus.
It continues to set the pace for industry and academic collaboration.
Flinders University is another on the brink of an exciting era of life
sciences research. The Adelaide-based university, known for its strengths
in health care and medical research, is creating new platforms for
multidisciplinary and industry collaboration in life sciences. Its Tonsley
Technology Alliance draws on the university’s schools of Medicine,
Health Sciences and Computer Sciences, Engineering and Mathematics,
and its innovation arms – the New venture Institute and Flinders
Partners – to create new business in healthcare technology.
Other universities are also taking industry collaboration in life
sciences to new levels. Monash University, for example, continues
to develop its groundbreaking research-platform strategy in life
sciences. More than two dozen life sciences companies, ranging from
global giants such as Pfizer, GlaxoSmithKline and Siemens to large
and small ASX-listed life sciences companies and private enterprises,
are working with the 24 Monash platforms. The Gold Coast’s Bond
University is developing a stronger multidisciplinary approach
through its Faculty of Health and Medical Sciences. It continues
to produce well-trained healthcare professionals, state-of-the-art
research and, in partnership with clinical academics, world-class
patient outcomes. The goal is to have leading medical practitioners
spending part of each week at Bond, researching, teaching and
exposing students to the latest medical thinking.
One of Australia’s most important medical research institutes, the Menzies
School of Health Research, describes its work as ‘research in action’ in
Indigenous health. The Darwin-based institute has an applied, rather
than theoretical, research focus, and it seeks greater collaboration with
Australian or international companies on Menzies research projects.
Forge’s biotech feature starts on page 72.
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