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The rise of Queensland’s tech start-up scene

Tuesday, 10 July 2012 | By Michelle Hammond

feature-queensland-thumbMuch has been made of Sydney’s tech start-up scene, particularly by the NSW Government, which is seemingly determined to promote Sydney as Australia’s version of Silicon Valley.

 

But venture north across the border, and Queensland is quietly making a name for itself as a technology hub. This is evident in the many developments coming out of UniQuest.

 

Established by the University of Queensland in 1984, UniQuest is widely recognised as one of Australia’s largest and most successful university commercialisation groups.

 

With an intellectual property portfolio of more than 1,500 patents, it has created more than 70 companies.

 

Since 2000, UniQuest and its start-ups have raised more than $450 million to take university technologies to market, while annual sales of products using UQ technology and licensed by UniQuest run at $3 billion.

 

In February, a start-up formed by UniQuest was named a finalist in the $US200,000 Imagine H20 prize.

 

It went on to win the Pre-Revenue Track award, receiving cash and in-kind services.

 

The start-up, Bilexys, saw an opportunity to biologically convert the organics within wastewater into high-value chemical products, including sodium hydroxide and hydrogen peroxide.

 

Chemicals produced by the Bilexys method are potentially less expensive and have a lower carbon footprint relative to traditional chemical manufacturing techniques.

 

In June, UniQuest negotiated an agreement for UQ-start-up Q-Sera, which wants to develop technology for producing a serum based on the blood-clotting properties of snake venom.

 

In the same month, UniQuest facilitated an R&D contract with a US biotech company on behalf of a UQ associate professor, and saw another of its start-ups secure $1.4 million in funding.

 

It should come as no surprise to hear UniQuest managing director David Henderson say UniQuest is in the midst of a growth phase.

 

“We’ve created something like 70 start-ups since 2000. The average is five to six a year,” Henderson says.

 

“There are a few players around now who have got a bit of money… The normal ones are Uniseed, MRCF [Medical Research Commercialisation Fund] and there’s been a couple of new players like OneVentures.”

 

“We’re also seeing interest from overseas as well, both from traditional investors and also strategic investors.”

 

According to Henderson, the main area of growth is the life sciences, although new materials – namely nanotechnology – is also emerging as a promising category.

 

Mark Cracknell, co-founder of Brisbane-based live video network Kondoot, agrees Queensland has seen great technological growth over the past few years, particularly in the electronic games sector.

 

“We’ve seen many start-ups grow into successful companies,” Cracknell says.

 

“A prime example of this growth is Halfbrick Studios, a Brisbane-based company that has grown to be one of the most popular iPhone game developers in the world.”

Cracknell believes one of the defining factors, with regard to Queensland’s technology community, is the community itself.

 

“It’s a network of supportive, innovative individuals and companies that work together to support the community as a whole,” he says.

 

“Also government support for projects such as The Edge continue to help the thriving technology space.”

 

Stephen Baxter, founder of Brisbane co-working space River City Labs, isn’t nearly as positive about the level of support from the state government with regard to start-ups.

 

“I honestly don’t think Queensland is better placed… We lack government support. Now we have an emperor instead of a premier. There’s no government support at all,” Baxter says.

 

“We’ve been told there’s no money available for new programs.”

 

Baxter is also hesitant to label Queensland a technology hotspot.

 

“I don’t think it compares very well, honestly, which is why I’m taking the time and effort to build River City Labs,” he says.

 

“I’m envious of the situation Sydney is in. River City Labs is my effort to try and get the south east Queensland corner shooting along to where Sydney is.”

 

“Being in Queensland doesn’t give you any inherent strength… I’m struggling to figure out how we’re different from any other state.”

 

Cracknell admits Queenslanders can, and do, face a hard time compared to some of the other states, which have more established communities and backgrounds in the tech space.

 

“Queensland is rapidly catching up to the Melbourne and Sydney communities,” he insists.

 

“However, from a more corporate perspective, Brisbane doesn’t quite have the same level of reach for high net worth individuals who may want to invest in start-ups, nor does it have the same corporate networks put in place by existing large companies.”

 

But Henderson believes Queensland’s smaller population size can sometimes work to an entrepreneur’s advantage.

 

“They’re more globally oriented because Queensland is still small relative to NSW and Victoria,” he says.

 

“Because of that remoteness, they also have to be more generalist with their product. If you’re in a market with seven million people, you can afford to have a narrow niche.”

 

“If you’re in a market with two or three million people, you have to appeal to a wider audience so you automatically have a bigger uptake.”

 

According to Cracknell, Queensland entrepreneurs are persistent, innovative, and – much like Premier Campbell Newman’s election line – have a can-do attitude.

 

“That quintessential ‘Aussie battler’ concept represents very closely what being a start-up entrepreneur is all about – working crazy hours on a crazy idea that might just work,” he says.

 

Meanwhile, Baxter categorises Queensland entrepreneurs as “mostly young and enthusiastic”.

 

“They don’t know what’s right nor wrong, which is excellent,” he says.

 

“They’re very keen to make a difference in their particular field of endeavour. These are all reasons to hang around this sector. That’s why it gets a lot of press.”

 

“But I don’t think that’s all too different to what you’d see in Sydney or Melbourne. They’re just doing it with one less layer of clothing.”

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