The ASX has registered just one float worth more than $100 million since the start of last year, although Abacus Property Group’s Storage King demerger, valued at around $3 billion, is expected to begin trading in early August.
“If you’re a really profitable high-growth company you could probably IPO, but other than that it’s pretty hard,” Mr White said. “That means there are certain numbers of de-listings and mergers that are going on that are shrinking the asset base of the ASX without any input on the other side.”
But he said the ASX was “a long, long way from a dead market”.
Superannuation industry
“It is a great market, it’s got a lot of liquidity, we’ve got this huge superannuation industry that feeds that market very strongly, and all those … investors and the funds that relate to them are in Australia, not on the Nasdaq,” he said.
Atlassian became the largest Australian company on the Nasdaq when it floated in 2015, while another major local technology group, the buy now, pay later operator Afterpay, has its primary listing in New York after being acquired by Block early last year. Canva, one of the country’s largest privately held tech groups, is being actively courted for a listing by the Nasdaq.
Other prominent figures in the tech industry, however, have criticised compliance burdens and suggested they would not try to list on the ASX again. Bevan Slattery, the chairman of technology infrastructure provider Megaport, described the “increase in overhead in running an ASX company compared to 2005” as “extraordinary” in a post on LinkedIn this month.
Mr Slattery has also founded other ASX-listed companies including PIPE Networks, NextDC and telco infrastructure play Superloop.
“The risks to directors are fast approaching the point where it is just not worth the reward. That’s why the ASX is losing so many companies both small and large to [private equity] and why founders like me are preferring to keep our [new] businesses private,” he wrote.
Speaking at the summit, Mr White said going public rather than seeking funding from private equity gave companies more opportunities to have “a global brand” that was more trusted due to the transparency required.
Listing overseas, however, could leave Australian technology groups off important indices due to their smaller size compared to peers in the United States.
“Being in an index is quite an important thing,” he said. “You get coverage, it becomes an investible stock and the valuation metric between those in an index and those that are not is quite a big difference.”
Ultimately, Mr White said he chose to list WiseTech on the ASX because it was the simplest option.
“I wanted to do the thing that was most compatible with us growing the company,” he said. “I wasn’t concerned about valuation in the short term. It didn’t matter that the valuation might not be perfect on the ASX.”
