Startup Genome, a project kicked off last year that measures the “startup ecosystems” of the top 25 hubs around the world, has ranked Sydney and Melbourne 21st and 22nd respectively.
Australia’s two largest cities fall well behind traditional homes to technology startups, such as US hubs in Silicon Valley and New York CIty.
These hubs were ahead of the London, Toronto and Israel’s second largest city, Tel Aviv, according to the project's latest figures given to TechCrunch.
The closest location to Australia that made the top 10 was Singapore, which was in seventh spot ahead of Sao Paulo, Brazil and Moscow, Russia.
Startup Genome released its updated report which investigated factors that contribute to the success or failures of startups in each ecosystem, including “throughput”, availability of capital, job creation, risk profile, product types, market size, mentorship, work ethic and thought leaders.
The projects leaders, Max Marmer, Bjoern Lasse Herrman, and Ertan Dogrultan began Startup Genome last year [pdf], collecting data from over 3200 startups from the around the world.
Although Silicon Valley’s startup ecosystem remains three times larger than New York City, and 4.5 times larger than London, and offered more startup capital than any other hub, London and New York offered more capital once a startup entered the “scaling up” stage.
One of the major perceived weaknesses for Australian startups is access to funding compared with the US, according to discussions Werber Vogels, Amazon Web Service’s chief technology officer, had with Australian startups last year.
Sydney’s startup star Atlassian, a self-funded software maker founded in 2002, secured its first major round of funding of US$60 million in 2010 from Palo Alto founded venture capital company Accel Partners.
Sydney-based startup Tigerspike attracted $11 million in funding from English company Aegis in 2011, which would help it expand into Singapore and other markets around the globe.
Despite New Zealand’s rising reputation as a startup hub, neither Auckland nor Wellington made the top 25.
The nation has attracted attention through PayPal co-founder Peter Thiel’s investments there through his Valar Ventures fund, helping produce notable successes such as accounting software firm Xero.