Matrak sells software that tracks materials through construction supply chains and recently banked $2.9 million in fresh capital, bringing the total raised to $12.6 million and maintaining a valuation of just under $40 million.
It established its new Shanghai office after months of work to ensure it could work on the other side of China’s “great firewall”, which restricts access to sites such as Facebook and Google in the country.
While Matrak hopes the boost in exports will help the start-up break even this year, China’s companies exporting their overcapacity has prompted a wave of concern across Western markets.
Policy-makers worry products like discounted Chinese steel and low-cost electronics will undercut their own trade, and US President Joe Biden has tripled tariffs on steel coming from China and Europe has threatened a restriction on Chinese electric vehicles.
Chips in Taiwan
Another Australian company is delicately managing tough geopolitical tensions between China and the rest of the world. Morse Micro, a Sydney-based chip designer also launched its new office last week, this time in Taipei, the capital of Taiwan, to get better access to the island’s massive chip manufacturing industry.
Taiwan is home to TSMC, the company that exports 90 percent of all advanced chips and has become a geopolitical bargaining chip for the island.
The US has fast-tracked the development of TSMC facilities in America to give it a backup in the event China takes over the democratic, self-governing territory it claims as its own.
But the bulk of semiconductors are still produced in Taiwan, and Morse Micro, which uses TSMC to produce its long-range chips, is competing with a growing number of customers for its “allocation”.
The threat of conflict remains a concern, but Morse Micro chief executive Michael De Nil said the company tests and warehouses its low-fi chips in Singapore to reduce the supply chain risk as much as possible.
“We cope with [geopolitical tensions] by making sure we split our supply chain a bit,” Mr De Nil said. “We are just trying to do business, so when the team travels to China we make sure we’re polite and don’t create any dramas.”
The Taiwanese president will be inaugurated next month after a democratic election that spurned the Chinese-backed candidate.
Building behind the great firewall
Global expansion has been a key pitch for fast-growing Australian technology companies, but most focus on the United States where the market size is complimented by the similar culture and language. IPO hopeful Canva launched its design software on the Chinese mainland in 2018.
Because of China’s strict data laws – tech companies are required to keep the bulk of the data generated from Chinese customers in the mainland – Canva established an independent Chinese business.
Initially, the design company had to contend with a wave of copycat products as local players reverse-engineered the software in a bid to sell lower-cost versions.
“The challenges are very real and the cost of actually launching in China is high, but you can get decent returns if you make it work,” Cliff Obrecht, chief operating officer at Canva, said in March at The Australian Financial Review Business Summit.
“You probably don’t want to launch in China as your first market because there’s other low-hanging fruit to pick, but it’s a massive market that should be considered.”
