SafetyCulture Founder & CEO, Luke Anear was invited to speak at the Australian Financial Technology and Regulatory Technology Select Committee. The inquiry examines how Australia can better foster start-up culture and further its growth. Here is Luke's take on how to support the technology industry in Australia.
SafetyCulture’s life started when we were three people in a garage in the northern suburbs of Townsville, in Queensland.
I had been running businesses since the age of 16 and my goal was to make safety and quality available to every worker in the world.
I was a single Father with 50% custody of two girls aged 9 and 11 and we all shared a single toilet at my house with my staff.
I understood that technology could play a role in helping workers around the world do their jobs better, but I did not have a network of other technology founders, or access to capital. Traditional lenders wouldn’t loan us money as we had no assets.
The local AusIndustry representative introduced me to the Commercialisation grant process. I also learnt that we required venture capital investment to match any grant funding.
As a result of receiving a $1.79m Commercialisation Australia grant, and matched venture capital funding 8 years ago, I leased an office in Townsville and employed a team of 30 product developers over the following six month period. That foundation has directly contributed to SafetyCulture employing a further 540 people, adding an additional 25 new people a month, with 350 of those people employed within Australia. Our average salary of our employees in Australia is $128,931.
In 2021 SafetyCulture will generate over $100m in revenue with an 82% gross profit margin. 80% of our customers are outside of Australia, therefore, we are an export business. Software is unique in that you can build a product once and sell it millions of times without any distribution costs, thanks to the app store.
SafetyCulture has attracted $180m in funding, with the majority of the funds coming from overseas. Each year we have reinvested into building the business by creating more jobs and continuing to develop new products.
What I have just described is a success story on every level. And yet, today, the Commercialisation Grant program has been scaled back to a $1m cap and most founders are discouraged from applying due to the likelihood of success. Subsequently the R&D tax incentive program has been significantly challenged recently.
We need to two things;
Funnel investment into technology companies
Attract the best product teams from around the world.
If we do that, we will build products that the world will consume.
Many of the best people we require have not completed university degrees or have 5 years experience . Certified Technology companies should be able to attract the best talent, without university degree restrictions. Early stage companies cannot pay high salaries to meet the current criteria for senior applicants. Equity is provided to offset salaries.
We need to simplify employee equity. It should not be taxed upfront. It needs to be taxed at 24.5% as a capital gain upon sale, not as income tax, so we can issue equity and top ups without penalising workers when they join a company.
Remuneration used to consist of salary, leave & Superannuation. Today it also includes equity. Equity needs to be as simple to offer as leave or Superannuation.
Australia benefited significantly from the immigration in the 60’s and 70’s, and attracting technology founders and workers is critical for the future of Australia.
Brand Australia has never been stronger following COVID, we have an opportunity to attract the worlds best people, but we need to act now.
I propose we set up a GreenBelt for technology talent allowing visa applicants between Australia, USA, Canada, UK, Germany, The Netherlands etc, to relocate to Australia provided they are working in a technology company. SafetyCulture is a FastTrack Visa accredited employer, we are audited to ensure we are complying with the legislation. We need to broaden the criteria for applicants.
We need to urgently incentivise technology companies to establish their product development within Australia. This will lead to new product development and innovation.
Watch the full address:
