Quantifying the impact of Melbourne startups: A key driver for economic growth

$707M

Total Early-Stage Funding

$9.7B

Exit Amount

#32

Global Startup Ecosystem

Challenge: Quantifying innovation's real value

Over the last decade, Melbourne’s startup ecosystem—stewarded by LaunchVic—has rapidly matured. But with increased public funding and policy focus, a compelling question arose: are startups delivering real, measurable impact to Victoria’s economy?

LaunchVic needed to validate the ecosystem’s growth trajectory with tangible data. This meant not only tracking the number of startups, jobs, and revenue but understanding more nuanced contributions—such as the ongoing value of acquired startups, spillover employment effects, and foreign investment flows. Traditional data sources couldn’t capture this complexity, and firsthand input from startup leaders was essential.

Solution: A data-driven impact study

Startup Genome delivered a comprehensive Economic Impact Assessment, charting Melbourne’s tech and innovation trajectory over the last ten years.

Key steps included:

Measuring core economic indicators such as startup output, cumulative revenue, employment generated, and capital raised.
Capturing indirect effects by investigating post-acquisition contributions and the multiplier effect of startup employment.
Conducting qualitative interviews with founders and executives to bridge data gaps, especially for acquired firms.

This deep-dive study not only quantified Melbourne's ecosystem value but illuminated strategic levers for future growth and investment.

Highlights

220%

Increase in startup employment

28,000

Startup jobs

~78%

FDI startup investment

Dr. Christopher Haley

Head of Research

Startup Genome’s analysis highlighted Melbourne’s already strong and rapidly growing ecosystem while showcasing the significant economic and employment impact startups are delivering. Their work reinforces the incredible opportunity for Melbourne’s startups to drive even greater growth, innovation, and global impact in the years ahead."

Heartbeat of the project:

Economic Scenario Impact

The Economic Scenario Impact initiative is a research-driven solution that helps governments analyze their startup ecosystem’s current contributions and future growth potential.

Using a robust data framework and advanced modeling, we reveal how targeted interventions can accelerate innovation, job creation, and startup scaling. This analysis supports informed policy decisions and maximizes the economic benefits of innovation.

Economic Impact Report

A comprehensive document capturing the Melbourne startup ecosystem’s economic contribution, including employment, revenue, exports, investment, and ecosystem valuation. The report also features segmentation by firm stage and sector, providing a nuanced view of growth dynamics.

Custom Data Models and Estimates

Tailored analytical models were developed to estimate job creation, revenue, firm-stage distributions, and multiplier effects using Victoria-specific datasets. These models enabled robust, localized insights to inform strategic planning and policy development.

Strategic Scenario Insights

Forward-looking insights were included to explore the potential outcomes of different policy interventions on ecosystem growth. These scenarios support evidence-based decision-making and help stakeholders prioritize high-impact levers.

Comprehensive Executive Reporting Package

The project delivered a suite of stakeholder-ready materials including a strategic presentation deck, insight visuals, and optional formatted report versions. These assets allow LaunchVic to clearly communicate findings across government, media, and investor audiences.

Recommendations for Policy and Measurement

Actionable recommendations were provided to improve ecosystem support and future assessments. This included suggestions to close data gaps, enhance measurement of post-exit firms, and optimize startup pipeline development.

Assessment Results:

Examples of Uncovered Insights

Startup growth drives employment gains

Between 2012 and 2022, Melbourne’s startup ecosystem more than doubled, growing from 1,289 to 3,061 startups—a 137% increase. This reflects a strong founder pipeline and robust support infrastructure. Employment rose even faster, with a 220% increase to 27,846 jobs, showing startups are scaling and creating significant regional employment.

Foreign investment validates ecosystem strength

Melbourne has become a strong magnet for foreign direct investment. Around 45% of startup exits in the last decade involved international buyers, reflecting both the ecosystem’s global competitiveness and the confidence foreign investors have in its long-term potential.

Acquired startups still create jobs

In 2022, Melbourne startups supported over 37,000 jobs across all firm stages, from pre-seed to post-exit. Notably, 80% of acquired firms expanded their Victoria-based teams by 49% within three years, challenging assumptions about post-acquisition job loss and highlighting ongoing local economic value.

Valuation surge signals global rise

Melbourne’s startup ecosystem has reached a $21.5 billion valuation, driven by sustained startup creation and exits. With ~39% compound annual growth, the ecosystem is scaling fast and establishing itself as a global hub attracting talent and capital.

Key Takeaways

Validation of public investment impact

LaunchVic gained credible, data-backed validation that its long-term investment in startup ecosystem development has delivered tangible economic benefits. This enabled the organization to confidently articulate the value of its initiatives to policymakers, funders, and stakeholders—strengthening the case for continued or increased public support.

Evidence to shape smart policy

The project provided LaunchVic and the Victorian government with a rich evidence base to shape more targeted, effective interventions. Insights into job creation dynamics, scale-up bottlenecks, and post-acquisition outcomes empower the client to fine-tune support mechanisms across the startup lifecycle.

Global positioning and influence

By showcasing Melbourne’s startup ecosystem as high-performing and globally competitive, the analysis enhanced LaunchVic’s ability to position the region as a prime destination for talent, capital, and innovation partnerships. This strengthens both Victoria’s internal narrative and its external influence in national and global innovation policy circles.

Curious how these results could work for your ecosystem?

Every success starts with a deep understanding of local context and a commitment to measurable outcomes. Let’s explore how we can collaborate on a similar project.