Meet the American tech investment bank which is targeting Australia for its next round of deals

Growthpoint Australia Director Kara Frederick (L) and John Savage, co-founder and Managing Director.

With offices in Palo Alto, the UK and now Australia, Growthpoint is chasing its next round of merger and acquisition advisory targets.

The tech investment bank sees Australia as prime hunting ground with a growing number of tech startups looking for exits.

“It’s maybe what Silicon Valley was thirty or forty years ago,” Growthpoint co-founder and Managing Director, John Savage told Business Insider, adding the market wasn’t as crowded with venture capitalists or companies like his.

Comparing the Australian tech market to the “second innings” of a baseball game, Savage said it was still early days but being on the ground now was a strategic play for the company which offers the connection between Silicon Valley and Australia. It helps tech companies with competition analysis, valuations, finding partners and brokering deals.

Leading the Australasia operations, Kara Frederick joined Growthpoint as a director with a particular focus on Australia and New Zealand. She previously worked on transactions totalling more than $15 billion across the tech and energy sectors and was a director at Goldman Sachs.

The Princeton graduate is looking to build an advisory platform for middle-market technology firms in Australia. She defines mid-market as around the $20 million mark.

“Australia and New Zealand punch above their weight when it comes to innovation and technology. We aim to showcase this on a global stage by not only providing connectivity to Silicon Valley’s ecosystem of technology innovators, entrepreneurs and 600+ institutional investors, but also by using our sector expertise and deal execution capabilities to deliver a superior outcome for clients,” she said.

Over the past two years the company has completed nearly half-a-dozen transactions in the region. Growthpoint brokered the sale of GreenButton, a SAAS company which enables businesses to move intensive workloads on-demand to the cloud without having to rewrite the application, to Microsoft which was finalised in May last year. It also advised Mesaplexx when it was acquired by Nokia in March 2014.

Savage said the growing number of multinational tech companies popping up in Australia, the types of people building tech startups and the ideas they’re executing are elevating in sophistication.

“There’s more and more talent that’s either coming to Australia or staying in Australia. You’ve got Google’s presence, you’ve got some of the larger tech companies from Silicon Valley that are here. What we’re starting to see is with the maturity of the tech cycle worldwide, those people that are here as a result of some of those more mature companies are starting to seed new things,” Savage said.

“In the years way in the past, a lot of the Australian tech was very myopic, servicing local companies.

“We’re seeing more early stage activity with a different kind of person seeding that. These people are seeding that with more of a world view of where the technology is going as opposed to a local view.

“They’re trying to build something that’s a little more significant.”

As for where the Australian market sits in comparison to the US, both Savage and Frederick agreed there’s a worldwide tech bubble occurring.

Looking at company formations and valuations of both early and late stage financing, “In Australia, we’re in the early stages of that [bubble], its lagged the US, the US has been in this bubble for a while,” Savage said.

Frederick explained it was currently very easy to argue that we’re in an up-cycle of a bubble. But pinpointing where the market is in that cycle is very “difficult”.

“Certainly, the longer you’re in an up-cycle the more nervous you become that you may have passed the apex,” he said, adding when valuations start rising quickly, not just on an absolute basis, it can also be an indicator a market is heading towards the top — very bullish.

“The head of the cycle is still in the US and Australia is still lagging, although much less than it used to,” Frederick said.

“Australian companies have more options than they did five, ten years ago. They’re growing more quickly… They’re also more interesting from a size perspective for US buyers.”

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