Startups – the rapid job growth engine of Melbourne and Victoria

Startup employment in Melbourne and Victoria grew 10.75% year on year between 2018 and 2020. Startups are the State’s new jobs’ growth engine, growing three times faster than job growth in Victoria’s economy.

For the Startup Employment in Victoria report, in collaboration with LaunchVic, we used realtime data to provide a detailed picture of startup job creation in Victoria, including the sectors creating the most jobs and the potential growth trajectory.  

It showed 5,900 direct new local jobs were created by homegrown startups between 2018 and 2020. 

Startups less than five years old generated the highest number of new jobs (39%) in this time period, employing 2,300 people. Those startups founded five to 10 years ago contributed a further 2,100 roles (35%), with companies over 10 years old creating 1,500 new jobs (26%). 

The data demonstrates that as startups grow and become scaleups, job growth accelerates. The 115 scaleups in Victoria created 2,700 jobs since 2018, with 23% of these in the past two years alone.

Dr Kate Cornick, CEO of LaunchVic said the report demonstrates how integral small and scaling startups were to new job creation for Victoria.

Half of the new jobs were created by HealthTech, FinTech and enterprise software startups, a demonstration of how Victoria’s traditional key sectoral strengths are adapting to changing economic and market conditions.

Healthtech companies added new jobs 55% faster than the already-over performing healthcare sector (+9.7% growth). Fintech and Energy startups also outpaced their respective industries, despite an annual growth rate more than two times higher than the Victorian average.

With regard to investment, the report showed that Victorian startups that had received seed funding scaled four times faster than those that didn’t. Series A+ funded startups scaled six times faster. 

There are currently 2,097 Victorian startups in Victoria – responsible for creating more than 40,000k jobs globally, with the bulk of these in Victoria.

Dr Cornick added, “Based on current growth rates, dealroom.co has projected that by 2025 Victoria will have 3,000 active startups that employ twice as many people as the sector did in 2018 – which could be 51,400 people.

“This exponential growth is something startups are renown for and this report confirms this growth is happening at a local level, which is incredibly exciting. 

“A future where startups represent a major part of the new jobs being created and value to the economy is a lot closer than we think.”