Freelancer CEO Matt Barrie: ASX Listing Is Too Hard For Tech Startups

Matt BarrieMatt Barrie / Supplied

When floats on the ASX on November 15, not much of the company will be up for grabs: just 8.1 per cent, which is likely to raise $15 million or so.

Why such a small cash grab?

CEO and founder Matt Barrie says the main reason is to ensure that the float delivers the expected result. “We wanted to maximise the chances of success,” he said today.

But a second motivation is to provide a “template” for other start-ups to list on the ASX, rather than being caught up in what he describes as the “valley of death” for mid-sized start-ups seeking finance in Australia.

Barrie hopes the listing will serve as a model for other tech businesses looking to raise money. “If this works, it can hopefully be an alternative template for going on the ASX.”

“We don’t have a long track record [on the ASX] for success in tech to date, so there haven’t been a lot of technologists who have gone on to be venture capital partners,” he told Business Insider Australia. “It’s been pretty much career bankers.”

“It’s a pretty primitive [venture capital] economy on the whole.” Barrie told attendees at a startup media lunch hosted by Amazon Web Services in Sydney today. “The current Australian venture capital model is quite broken.”

Barrie contrasted the reluctance to embrace technology firms with the Australian addiction to resources stocks: “People going in with a tenement, a PowerPoint presentation and no drilling results can go a long way.”

Early stage capital for tech startups is fairly readily available, and firms with significant revenues (above $10 million) can usually attract attention from global venture capital, but businesses in between those extremes have very limited fund-raising options in Australia, he said. “Raising between $1 million and $5 million is the valley of death.” Outside of Square Peg and Blackbird VC, few firms are pursuing the sector locally, he said.

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