ASX Seeks Tech Listings as Venture Funds Face Growing Exit Pressure
Synopsis
The ASX is pursuing technology startups backed by venture capital firms across the region and the US, betting that public markets can provide an alternative exit route as funds look to unlock returns after a decade of constrained liquidity.
The Australian Securities Exchange is stepping up efforts to attract venture capital-backed technology companies as founders and investors increasingly consider whether the local market can provide a viable exit route after years of limited liquidity.
The ASX is working with technology companies and venture capital funds across Australia, New Zealand, Singapore and the US on potential listings, according to Capital Brief.
James Posnett, the exchange’s general manager of listings, said the ASX has a “healthy pipeline of tech companies” considering a float.
Globally, however, only around 15% of venture capital-backed companies eventually go public which highlights the challenge facing both startups and their investors.
Posnett said the ASX is working with companies and funds to position the exchange as an option for future growth, liquidity and capital raising.
ASX Sees Opportunity in Mid-Market Exits
The push comes as Australian venture capital funds face increasing pressure to return capital to their limited partners or LPs, after a decade in which exits have remained difficult.
Posnett said the exchange could help venture funds deliver distributions to LPs and recycle capital into private markets. The debate is also gaining momentum among founders and investors with Innovation Bay co-founder Ian Gardner saying the conversation around the ASX as a potential mid-market exit is developing from both sides of the cap table.
The ASX believes Australian technology companies may be better suited to its market than to larger US exchanges. The S&P/ASX 200 has an entry point of about US$1.1 billion, compared with roughly US$22.7 billion for inclusion in the S&P 500, according to Capital Brief. Most Australian technology companies remain below US$5 billion in value.
Investors Weigh the Local Route
Galileo Ventures managing partner James Alexander described the ASX as a potentially strong mid-market pathway, although he said some of the necessary ingredients were not yet working together effectively.
Galileo Ventures partner Julia French said the fund is working directly with the exchange, arguing that Australian startups need an exit pathway beyond Nasdaq.
For the ASX, attracting more venture-backed companies could strengthen its technology pipeline while giving local founders and funds another option beyond private sales or overseas listings. For the startup ecosystem, the bigger question is whether the exchange can turn that growing interest into successful, liquid technology listings.
Source: Capital Brief
Vishal is an experienced Editor at Inspirepreneur Magazine with key interests in artificial intelligence, eCommerce, entrepreneurship, lifestyle and startup sector. Prior to joining Inspirepreneur, he was a Content Writer cum Correspondent at Siliconindia Magazine, where he worked on Company Profiles, Cover Stories, Executive Profiles, Feature Articles and Thought Leadership content.
