Denham Sadler
May 30, 2019

Morse Micro keeps HQ, R&D in Aust

Policy

Morse Micro keeps HQ, R&D in Aust

Andrew Terry and Michael De Nil: The R&D tax incentive has been a big support

Fresh from a $24 million capital raise, Internet of Things semiconductor startup Morse Micro has vowed to keep its headquarters and research and development operations in Australia, and lauded the federal R&D Tax Incentive scheme as critical to its success.

Morse Micro developed a micro Wi-Fi chip with a long range and reliable connection, specially designed for IoT devices. The chip uses a 900MHz radio band with extended range and lower power consumption compared with conventional Wi-Fi, and supports high bandwidths and large networks.

Morse Micro co-founder Andrew Terry said the research and development tax incentive has been instrumental in the tech company’s success, and urged the federal government to stop tinkering with it.

“If Australia wants to continue to be a global force in R&D, then it does require government help. Most of what we do is R&D, so it has been extremely beneficial. It has allowed us to do 60-70 per cent more research and development than we would have been able to do without,” Mr Terry told InnovationAus.com.

“It reduces the capital requirements needed to fund an R&D project, and makes it possible.”

The Sydney-based company has just closed a $23.8 million funding round led by Analog Devices founder Ray Stata and CSIRO’s Main Sequence Ventures, with participation from Skip Capital, Blackbird Ventures, Right Click Capital, Uniseed and the Clean Energy Innovation Fund.

Despite attracting the founder of an American semiconductor multinational as an investor and plans to mass produce the Wi-Fi chips in Taiwan, Morse Micro will keep its headquarters and research and development activities in Australia.

“Sydney, and Australia in general, is an attractive place to live for people overseas. I moved here from Scotland, my co-founder is from Belgium, and at least three quarters of our team are immigrants. In terms of attracting world-class talent, it is a good place to live,” Mr Terry said.

“It turns out Australia is a pretty good place to do R&D, for Wi-Fi in particular. We have great talent here – we’ve got the investors of the original Wi-Fi standards in Sydney. There’s a great legacy of engineers that have come out of here, there’s the talent here.”

Mr Terry also said he hoped the federal government works to tear down red-tape to help encourage the growth of the advanced manufacturing sector.

“The main thing is reducing the amount of paperwork and bureaucracy. That can add up to a significant amount of time for a small business. Filling out grant applications can be so onerous that you look at them and think it’s just not worth applying for them,” he said.

He also sang the praises of the CSIRO’s Main Sequence Fund, which was a co-investor in Morse Micro’s funding round.

“That’s a great initiative – it’s a good example of a well-run scheme," Mr Terry said.

"The government is going to get money back many times over by allowing some experts to manage that money in a venture-type structure. We should do more of that sort of thing.” 

Main Sequence Ventures is the $200 million CSIRO innovation fund, headed by Blackbird Ventures co-founder and partner Bill Bartee.

With the capital injection, Morse Micro is now set to begin the mass production of its chips, which it will do out of Taiwan.

“We’ve spent the past three years or so since we founded the company developing some pretty smart technology. We’ve now shown that technology to various customers and they’re busting to get their hands on it and are prepared to buy millions of chips per year and put them into products,” Mr Terry said.

“The vast majority of all chips in the world are made in Taiwan through a handful of very, very large, very specialised companies. Pretty much everyone makes chips there. We use the same process and the same technology, but it’s our design and critical technology, and the software and manufacturing process is ours.”

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