WHY BRISBANE HAS AN EDGE ON SILICON VALLEY
Written on the 5 March 2015 by Laura Daquino
SAN FRANSISCO headquartered but soon to publicly list for the first time on the ASX - in spite of rents and rates, this company has a couple of reasons why Brisbane can be a better launch pad than Silicon Valley.
Mobile marketing and analytics company OtherLevels, founded in Brisbane in 2012 by Brendan O'Kane (pictured middle), has just lodged a prospectus with the Australian Securities and Investments Commission for an anticipated ASX listing of March 30.
An OtherLevels IPO is set to raise a minimum of $6 million at 20c per share for 30 million shares, with the ability to take up to $1.5 million of oversubscriptions to value the company at $31.5 million.
OtherLevels revenue grew by more than 100 per cent in the last six months of 2014 as more large enterprises shifted marketing budgets towards smarter mobile campaigns, with December 2014 revenue's alone being $184,121.
The company's clients include Coles, Tatts Group, Intercontinental Hotels Group, Sega and Halfbrick Studios, and the client renewal rate for last year was 90 per cent.
OtherLevels development centre is based in Brisbane but 80 per cent of its revenue is generated from outside Australia.
Its second largest shareholder is startup founder and investor, River City Labs creator and Shark Tank judge Steve Baxter.
Like Baxter, O'Kane has a history of backing early-stage tech companies. KidSpot and Blue Sky Frog - later purchased by News Corp and Vodafone respectively - are in his business backing background.
The pair also share in another mindset - despite the size of its market, Silicon Valley isn't always the best bet.
"Australia was a clear choice for us in terms of where we can find the right technical talent in software engineers to innovate and service our growing international client list, as well as explore options for capital raising," says O'Kane.
"It was a simple decision when you look at the difficulty in building a technical team in somewhere like San Francisco - it's unbelievably challenging because it's a very competitive market.
"It is very attractive to us to raise our capital locally, build our development locally and then be very global in our focus.
"I have a lot of confidence in the Australian stock market - it's a top 10 market globally and for a small country that's great."
O'Kane is conscious, though, that you can't run a company of the kind OtherLevels aspires to solely from Brisbane.
"You can pretend it works but it just doesn't," says O'Kane.
"There needs to be departments offshore, and this is one of the reasons I stepped back into the role of chief technology officer for Ramsey Masri (former Oracle executive, pictured above right) to become CEO last year.
"If we are going to be a true global company with the majority of staff outside Australia then I can't run the company completely out of Brisbane."
O'Kane says "it's been a little while" since a "great Brisbane born company" has cropped up on the ASX, something which OtherLevels is hoping to address.
"If we can emulate the Technology One's (ASX: TNE), Flight Centre's (ASX: FLT) and Wotif's (ASX: WTF) we will be very pleased," he says.
Pictured left to right: OtherLevels chairman Brian Mitchell, founder and chief technology officer Brendan O'Kane, CEO Ramsey Masri