Why Tyson Gundersen, the VC investor behind MilkBar, is putting his money on Adelaide

When Tyson Gundersen sold the rights to his shooter game for a fortune, he could have chosen to start an investment business anywhere. Here’s why he chose to back Adelaide.

Tyson Gundersen inside a Bureau Booth at the MilkBar offices on Featherstone Place in the Adelaide CBD. Picture: Dean Martin

Of all the cities in the world, entrepreneur and venture capital investor Tyson Gundersen chose Adelaide as the place to establish his young family and set up a base to take his own businesses, and those of other budding founders, to the world.

A passion for wine making was another catalyst for the move from London at the start of 2020, but Covid-19 and a bout of hand, foot and mouth brought his brief wine making stint with d’Arenberg to an abrupt end, and he refocused his attention on the start-up world.

After a career in business turnarounds and consulting with KPMG and FTI Consulting, Mr Gundersen teamed up with close friend Max Rea in his first start-up, video game developer Black Matter, which went on to sell the rights to World War II shooter game Hell Let Loose for £46m ($86m) at the start of last year.

With a desire to prove it wasn’t a one-hit wonder, Mr Gundersen launched venture capital firm MilkBar earlier this year – an incubator and investor in start-ups including Bureau Booths, which manufactures soundproof office booths and now has offices across Europe, the Middle East and Canada.

Entrepreneur and venture capital investor Tyson Gundersen in a Bureau Booth at MilkBar’s city offices. Picture: Dean Martin

Originally from Byron Bay, Mr Gundersen said Adelaide offered the perfect testing ground for new ideas, and the city’s low cost of living and quality of life added to the appeal for entrepreneurs.

“We were looking for a city that had great job opportunities, had a great quality of life, had affordability of housing so that we could take more risks in what we were doing and do more creative stuff,” he said.

“We basically had a spreadsheet of all these global cities that we were looking at … and Adelaide really came up on top from that list.

“These days you can do business from anywhere in the world so Adelaide offers a great quality of life while you’re doing these businesses, and offers a great ability to focus, and you’re not wasting time commuting.

“It’s got a great customer base to test on and once you get it right, you can then take that to the rest of the world.”

The move to flexible working has been a huge boost for Bureau Booths, which Mr Gundersen launched in 2020.

Its range of soundproof office booths are found in airports, medical facilities, schools, warehouses and homes across the world.

With sales surging past 1000 units a year, Mr Gundersen said the brand was growing rapidly ahead of a planned opening of a permanent office in the lucrative US market.

“The ability for your staff to have a quiet space to think and to work, or removing that noise distraction from the office is a huge enhancement to productivity,” he said.

“The trends that existed before Covid were people wanting to work from home more, people wanting more flexibility around where they’re working from, the adoption of video calls instead of physical travel all the time.

“All those things were going on already — Covid was just a massive accelerator of those trends.”

The success of Bureau Booths ignited Mr Gundersen’s passion for entrepreneurship, and inspired the launch of MilkBar.

It’s currently working with 10 investee businesses across various stages, ranging from pre-revenue and early stage market testing, through to rapidly growing companies like Bureau Booths.

They include iBlush – a scientifically formulated patch created by Chinese-Australian university student Lydia Li to reduce the effects of alcohol flush, and vitamin-infused coffee pod maker Brimful.

Entrepreneur and start-up investor Tyson Gundersen is among the headline speakers at this year's AEDA Business Summit. Picture Dean Martin

Mr Gundersen said MilkBar took a hands-on approach to its investments, and specialised in areas where there was an “overlap of physical products and tech”.

“We invest in people typically,” he said.

“We’ve got a list of probably 150 pretty well-vetted ideas that we know will work if we have the right people, but I have no interest in growing this to being like a Sequoia or some massive VC fund.

“I like this being small, I like to know everything that’s going on with everyone and being a part of that journey.

“And now we’ve got the physical space in Adelaide that we’re building and redeveloping in the city, at Featherstone Place, that has become a real hub for really high quality entrepreneurs that are starting a business in Adelaide but with a really global, outward-focused perspective.”

And that global outlook is something Mr Gundersen encourages more South Australian-based founders to adopt.

“I think the biggest challenge here has been a bit of a legacy mindset of how do you become the dominant player in Adelaide, or how do you go to Melbourne, rather than how do we do this on a global scale?” he said.

“Market share in Adelaide really is immaterial in the grand scheme of things. Adelaide is just the best incubator space to do this in terms of talent, in terms of quality of life, in terms of cost of living being lower, so you can have people take more risks.

“It’s definitely phasing out but there has been this mindset of building an Adelaide-focused business or a South Australian-focused business. I want to build businesses that have a global presence.”

Mr Gundersen will be among the speakers at the AEDA Business Summit on Wednesday at Adelaide Oval.

Other speakers will include The Demographics Group director Simon Kuestenmacher and South Australian Productivity Commission chair Adrian Tembel, while University of Adelaide chancellor Catherine Branson and University of South Australia deputy chancellor John Hill will discuss the implications of a potential university merger.