An Australian couple has moved their technology startup operations to Southeast Asia, citing the country's high cost of living and a challenging venture capital environment as primary reasons for leaving.
Nancy Cao, co-founder of the technology company Musefunnel, stated that the decision to establish their business outside of Australia was driven by the escalating cost of living, which she described as making it feel like a "nightmare" to build a startup there. Cao and her Canadian-born partner, Kether Saturnius, who founded the company in 2025, are currently based in Vietnam for three months, exploring Southeast Asia as a region for their location-independent business.
"The cost of living is a fraction of what it is in Sydney, which means we can keep our costs low, stay focused, and build without the constant financial pressure that comes with operating from one of the world's most expensive cities," Cao said. She explained that reducing personal and business expenses allows for more time, focus, and better decision-making, which are crucial when building a company from scratch.
Cao indicated that discussions with venture capital investors in Sydney were a significant factor in their decision. She reported that many investors were not offering sufficient funding to support even one full-time employee. This led the couple to decide it was more rational to self-fund, reduce their operational costs, and develop the business from Southeast Asia while validating their concept.
While acknowledging Australia's advantages, such as its stability, educated populace, and strong institutions, Cao emphasized that it is not an ideal environment for building a cost-efficient technology business from the ground up. She pointed to high business operating costs, a relatively small market, and conservative early-stage funding as significant hurdles.
Advances in artificial intelligence have also played a role in their decision, according to Cao. She noted that AI allows smaller teams to accomplish tasks that previously required larger product and engineering departments. This shift means that a business requiring a substantial investment for development can now be pursued with a leaner budget by a capable founding team. For Musefunnel, this means they do not need to be in Sydney to hire a large team, as the two co-founders can manage the technical and commercial aspects sufficiently to progress significantly before seeking external capital.
Cao suggested that for Australia to become more competitive for early-stage tech companies, it would need to lower business costs, encourage greater risk-taking among investors, and recognize that not all technology ventures require substantial funding from their inception. Until these conditions improve, she believes it will remain difficult to justify building a company in Australia when faster growth and lower costs are achievable elsewhere.