Facebook board member and PayPal co-founder Peter Thiel has made his first investment in Australia in a $1.2 million funding round for business software maker ScriptRock.
It's a potentially life-changing deal for Sydney-based ScriptRock founders Michael Baukes, 32, Alan Sharp-Paul, 34, and Leo Venegas, 37, who up until late last year were IT consultants living "the cushy life". They only incorporated ScriptRock in February.
"We're corporate refugees mate ... we're just normal guys who couldn't handle the corporate life anymore and wanted to do something great," said Baukes. "We just threw ourselves into the product and put it all on the line."
It comes after Fairfax Media first revealed that Thiel, a heavyweight entrepreneur in Silicon Valley and beyond, was hunting for hot start-ups in Australia early this year. Thiel made the investment in ScriptRock through his venture capital fund Valar Ventures.
Thiel, who is also president of global fund manager Clarium, sold PayPal to eBay in 2002 for $US1.5 billion and then along with Accel Partners became the first external investor in Facebook.
Based in Sydney, ScriptRock makes a product that is highly technical - it allows IT administrators to store, share and test their server configurations - but which is globally novel.
Geeks working at big blue chip companies have been raging about ScriptRock. The company, which doesn't reveal customer names, has 280 clients with a further 180 waiting to come online.
This number might sound small but just one of those clients manages two million servers, according to Baukes.
"Before an aircraft takes off lots of different teams around the aircraft do pre-flight checks on it - we basically do that but we do it for complex computer systems in big companies," he said, adding in Australia his biggest clients were financial services firms.
ScriptRock began in the start-up incubator Startmate, which also participated in the new $1.2 million funding round, as did Australian venture capital firm Starfish Ventures and a roster of heavyweights living in the US such as Dave McClure (500 Startups), Paul Bassat (Seek), Anthony Marcar (Grabble), Larry Marshall (Southern Cross Venture Partners) and Mark Jung (IGN).
Like other Australian software companies such as Atlassian, the internet has enabled ScriptRock to acquire customers all over the world.
"ScriptRock has an excellent founding team who are addressing a global problem, and we look forward to seeing them continue to develop their vision in the years ahead," said Valar Ventures.
Australian entrepreneurs have become hot property among US investors, who have poured millions into some of our most promising tech-startups such as Atlassian, BigCommerce, 99Designs and Kaggle.
Like those who came before it ScriptRock is using the investor money to set up its San Francisco office. It is already a US company - the Australian office is a subsidiary - but it plans to keep up to 70 per cent of its staff, including development and support, in Australia.
Baukes and Sharp-Paul are moving to San Francisco while Venegas will run the show at home.
Baukes says the main reason for keeping a base in Australia was access to talented engineers, who are expensive and highly sought after in Silicon Valley but more available here.
To illustrate his point Baukes said the core of Amazon Web Services was built by Australian distributed computing experts who were snapped up by Amazon on a visit here about 10 years ago. Baukes knows one of the people who were hired.
"Australia's obviously got a penchant for developing world class engineers so we're proud to be part of it," said Baukes.