Malone makes mark on Perth’s start-up scene
Michael Malone, the man who founded iiNet, is setting himself up to become an angel investor in Perth’s fledgling start-up community, saying the seed of “something good” is emerging in the West.
Speaking to WestBusiness after he announced his first serious local play post-iiNet — a “substantial equity investment” in cyber security outfit Diamond Cyber — Mr Malone said he was pleased the tech-focused start-up scene had been “building rapidly” over the past year.
“When I left iiNet (in March last year), I spent most of my time in Sydney with the start-up sector there, ” Mr Malone said.
“I found even a year ago the maturity of the start-up scene in Perth was pretty non-existent. Curtin has been trying for more than a decade, with its innovation sector out there, but it has never got traction.
“But now I constantly find I’m looking over my shoulder back at Perth. And now it’s building.”
Mr Malone, whose estimated wealth of $100 million has been dominated by an iiNet holding that, based on his last disclosure, comprised 7.9 million shares worth $62 million, said he felt obliged to become a seed investor in tech and financially back some companies.
Diamond Cyber has taken up residence in the hub of Perth’s start-up scene, Spacecubed — coincidently in desks next door to a permanent team iiNet has at the hub — and has been taking on clients for the past few months.
The company, which began in June, employs ex-special forces cyber security experts to provide strategies for corporate clients on their cyber security.
“The old James Bond days where you’re trying to find out state secrets like troop movements . . . and all this stuff, well, it’s not like that anymore, ” Mr Malone said
“Nation states are doing espionage right now, it is all about commercial advantage.
“There’s a lot of compliance now, and protection of IP, even for ASX companies. And it’s building a business around the healthy level of paranoia that exists . . . but lives depend on it, it’s not just a computer getting hacked.”
Mr Malone now spends most of his time in Sydney but travels back to Perth regularly to catch up with friends and business.
He has invested heavily there, including in a start-up incubator called Blue Chilli and a number of other start-ups.
He said while he was excited by Perth’s development, it still had a long way to go compared to the place they call Silicon Beach.
On iiNet, he admitted he had “major withdrawals” in the weeks after leaving.
“I was more concerned they took so long to employ David (Buckingham), ” he said. “But I’m happy now, and the share price is doing well.”
Mr Malone said the start of next year would be spent consolidating his investments but some projects on his radar looked “so sexy” he could not resist.
“The reality is geeks like me might be good at coding but we have no idea how to sell it or commercialise ideas, ” he said.
© The West Australian