According to recent data in AustCyber’s flagship publication, the Sector Competitiveness Plan (SCP), there is serious cause for concern about the funding challenges faced by Australian cyber security startups, particularly the funding gap between Australia and international competitors.
"Australian cyber security startups are facing a significant challenge. In 2022, Australian startups received a staggering 300 times less funding compared to their international peers, making it difficult for them to scale and compete globally." - Jason Murrell
AustCyber's Digital Census 2022, which surveyed cyber security firms across Australia, revealed that funding is identified as a significant barrier to growth. One respondent stated, "Australian cyber security organisations have difficulty scaling due to low capital and no relevant grant opportunities."
An additional barrier to closing the funding gap is Australia's venture capital ecosystem, which currently ranks 20th out of 38 OECD countries in venture capital funding as a share of GDP. Jason emphasised this issue, stating:
"Australia's venture capital ecosystem is still in its infancy compared to other countries, putting us behind countries like Israel, Canada, and Singapore in terms of investment opportunities for startups."
The COVID-19 pandemic has further exacerbated the funding challenges faced by Australian cyber security startups. Murrell acknowledged this, saying, "The ongoing uncertainties caused by the pandemic have added to the difficulties faced by our startups in securing the necessary funding to grow and compete globally."
The impact of the funding gap is not limited to immediate financial constraints, but also has long-term implications for the potential of Australian cyber security startups. Without adequate funding, these startups may struggle to attract top talent, invest in research and development, and expand their operations.
"This lack of funding is not only limiting their immediate financial resources, but also impacting their long-term potential to compete globally and drive innovation." - Jason Murrell
Despite the challenges, there are opportunities for Australian cyber security startups. AustCyber’s SCP highlights that the Australian government and other stakeholders can take proactive steps to address the funding gap and support the growth of the cyber security ecosystem. This could include increasing funding allocations, creating targeted grant programs, and fostering collaboration between startups, academia, and industry.
"By recognising the strategic importance of the cyber security sector and investing in its growth, we can ensure that Australia remains competitive in the global market and at the forefront of cyber security innovation." - Jason Murrell
Learn more about how we can help startups grow here: https://www.austcyber.com/who-we-help/founders