Key points:
- The ASX is working to convince top venture capital investors that the local exchange is the best place for tech start-ups to go public.
- However, founders of successful start-ups such as SafetyCulture and Octopus Deploy are skeptical about listing on the ASX.
- They cite a lack of expertise in local investment circles and the poor performance of earlier listings as reasons to avoid the exchange.
- Founders also prefer to stay private for as long as possible to focus on building their products.
- The ASX’s listings executive believes that more venture capital firms will need to find exits this year, which could lead to more tech listings.
The ASX is working to convince venture capital investors that its exchange is the best place for tech start-ups to go public. The exchange has been meeting with investors, both domestically and offshore, to discuss the benefits of listing on the ASX. They point to the performance of tech stocks such as Siteminder, WiseTech Global, and Xero as evidence that the ASX provides entrepreneurs with an effective way to access capital.
Despite this, founders of successful start-ups, including SafetyCulture and Octopus Deploy, remain skeptical about the benefits of listing on the ASX. They cite a lack of expertise in local investment circles and the poor performance of earlier listings, such as Nuix, as reasons to avoid the exchange. They also prefer to stay private for as long as possible to focus on building their products.
The ASX’s listings executive, Blair Beaton, believes that more venture capital firms will need to find exits this year, which could lead to more tech listings. He believes that it will be easier to find coverage from analysts and investor interest locally than overseas. In 2022, companies listed on the ASX raised $20 billion of secondary capital, compared to $10 billion on Canada’s Toronto Stock Exchange, $17 billion on the London Stock Exchange, and $37 billion on the Nasdaq.
However, founders will need to start viewing a listing on the ASX as a badge of honor before companies in venture capital portfolios will want to float locally. There is a desire for more high-quality, mature tech companies on the market. Some venture capital firms are looking for the exchange to step up as a venue for the quality start-up crowd.
