Many countries have strong rivalries between their two leading cities. New York vs San Francisco, Shanghai vs Beijing, Toronto vs Vancouver.
In Australia, it’s Sydney vs Melbourne.
This past week, I have been reporting from Sydney and meeting as many people as possible from the city’s startup ecosystem in that short period of time. Since announcing my arrival in the country, however, I have been made to regret not adding Melbourne to my itinerary. When it comes to startups, there really isn’t much to separate the two cities. While Sydney, the larger city, seems to have more grassroots activity, with incubators and co-working spaces such as Fishburners, Pollenizer, TankStream, Startmate, and Blue Chilli both fostering and capitalizing on a groundswell of enthusiasm for startup culture, Melbourne has shown that it can compete with Sydney on both breadth and depth in terms of quality of companies, and on exits and revenue.
I didn’t have a chance to get to Melbourne, but several people pitched me on the idea of covering the emerging ecosystem there. Among those folks was Stuart Richardson, a partner at Australia’s Adventure Capital, who outlined what he sees as the key forces at play in the Melbourne community. In lieu of actually going to Melbourne, the least I could do is let the man have his say. So, if you’re interested in Australian startups but you’ve only looked at Sydney, you can below read a briefer on what you need to know about the “other” city.
Melbourne is well-known for its cafe culture, hip bars, and its arts and culture, while Sydney tends to tilt towards the financial sector.* But Richardson points out that Melbourne companies also account for a large chunk of the companies that have been publicly listed in Australia. Among them are $10 billion worth of listings on the national stock exchange, ASX. They include the Monster.com-like Seek, RealEstate.com.au, and Carsales.com.au.
Melbourne has also been home to RetailMeNot, which sold to Austin’s WhaleShark Media, and Hitwise, which sold to Experian. Other hot startups based in Melbourne include 99designs, Aconex, Envato, and iSelect. Richardson says the city of 4 million people is also home to a Fishburners equivalent called the York Butter Factory, which houses more than 70 startups that have global ambitions. It has its own VCs, too, including Adventure Capital and Starfish Ventures. A recent Startup Weekend in Melbourne, meanwhile, attracted hundreds of attendees.
What we’re seeing, then, is the beginning of two ecosystems emerging simultaneously in Australia. That concurrent development does have the result of spreading the country’s tech innovation across a wider geographical region — Melbourne is 10 hours’ drive from Sydney — potentially splitting up resources and attention that might be better focused on a unified ecosystem. At the same time, however, it pays to not have all your eggs in one basket, and Melbourne’s startup output at the very least offers a community that encourages a separate set of entrepreneurs to try to change the world from a little corner of the planet called Australia.
While residents of each city argue strongly for why their locale is better than the other, for now Melbourne and Sydney are better off supporting each other, content in the knowledge that each city is pushing aggressively to put Australia on the startup world map.
* In the first version of this story, I caught a lot of shit from Aussies for saying that Melbourne was known for its “big beaches.” It’s the sort of stupid thing you write on no sleep at 2 in the morning when all you can think of is, “well, there is St Kilda…” I apologize to the nation of Australia and anyone who has set foot on Bondi Beach for the oversight.