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Silver linings: Is the tech sector at a turning point?

In an eventful 2021-22 financial year, the global economy felt the pinch amid rising inflation and interest rates, ongoing geopolitical tensions, supply chain disruptions and talent shortages. How have Australian tech companies been affected? And what will it mean for the sector moving forward? Ahead of Tech Fast 50 2022, we sat down with Sasha Conoplia, Business Development Manager at ASX Listings, to find out.

 Fast facts:

  • A record 217 companies listed on ASX in FY22
  • Approximately 90% of FY22 initial public offering (IPO) capital was raised in 2021
  • The S&P/ASX All Tech Index (XTX) is up approximately 25% since February 2020
  • Deloitte will launch a new Climate category at Tech Fast 50 2022.

“It was certainly a game of two halves,” Sasha says, reflecting not on a nail-biting football match, but the tumultuous 2021-22 financial year. Looking at the numbers from the Australian Securities Exchange (ASX), his observation rings true: approximately 90% of IPO capital was raised in the six months ending 31 December, before a significant pullback in market valuations and capital raising activity.

Geopolitical tensions, rising inflation and interest rates, disrupted supply chains and tight labour markets created a challenging global economic environment in early 2022. But there are silver linings in the short and long term. A record-breaking 217 companies listed on ASX over the last financial year, and as Sasha points out, market volatility (measured by ASX200 VIX) is starting to fall.

“The decrease in volatility is a positive signal that markets could be digesting the stories, with perhaps some longer-term confidence coming back to the market compared to the first six months of the year,” he says.

“In the last six months* the XTX was only down 4%, and it’s up 10% in the past month.”

“Market feedback suggests IPO deals will be priced at more investor-friendly valuations towards the end of 2022 and into the first half of 2023. As for long-term trends, investors will continue to want exposure to sectors linked with the energy transition, decarbonisation, technology and advancements in life sciences, automation and cybersecurity.”


Though tech valuations have been down for much of the year, many companies have continued to grow by demonstrating a clear path to profitability. For Sasha, this has been a consistent consideration for Australian investors.

“Companies that can show a path to becoming cashflow positive through to profitability in the medium term would certainly benefit from an uplift in valuations against longer-term loss-making accelerated growth companies,” he says.

“Having a clear path to profitability would be a strong ticket to play for an IPO in the current environment.”

Impressively, Australia’s tech sector continues to punch above its weight and compete with globally recognised peer exchanges in Japan and the US. 

“The Australian tech sector is very competitive on a global basis,” Sasha explains.

“There have been 111 tech IPOs on ASX in the past five years. ASX investors have a strong appetite for growth companies, borne out of a long-standing growth mindset from back in the early mining and exploration listings. Australia’s AU$3.4 trillion superannuation pool also underpins continued investment in Australian and international growth companies listing on ASX.”

With a single board for listings, ASX gives tech companies of all sizes access to investors and liquidity. And valuations of its listed tech companies compare favourably with similar-sized and larger companies in the US. 

Sustainability is another area where the Australian tech sector will play an increasingly important role. At Tech Fast 50 2022, Deloitte will launch a new Climate category to recognise the Australian companies harnessing technology to help customers achieve net zero.

Sasha believes that as a market operator, ASX has an important role to play in helping corporate Australia achieve its sustainability goals. But first, they want to lead by example.

“In the 2022-23 financial year, we aim to source 100% renewable energy for ASX, reducing our total carbon emissions by at least 85%,” Sasha says.

“Our target is to achieve net zero Scope 1 and Scope 2 emissions by the 2024-25 financial year.

“For issuers, we provide sustainability education and training. And sustainability disclosures and reporting are a significant area of focus for the ASX Corporate Governance Council, which met recently, especially in light of recent work by international standards bodies in proposing a global baseline of sustainability disclosure.

“We believe every bit helps – be it setting an example for our people, partners or across the market.”