Minneapolis in the USA's upper Midwest is a long way from Bridge St in Sydney.

Key points: Tech stocks make up 2.4 per cent of Australia's share market

Tech stocks make up 2.4 per cent of Australia's share market Analysts say the number of tech companies on the market has doubled over the past five years

Analysts say the number of tech companies on the market has doubled over the past five years Tech companies are expected to grow around 11pc over the next few years according to some analysts, but others urge caution

But geography is of no concern to the Australian Securities Exchange (ASX) or US-based payment platform Sezzle, which launches its initial public offering (IPO) here next week.

Sezzle is a payment platform targeted at younger consumers, much like Australia's Afterpay.

"Australia has become a mecca for this type of product and the Australian investor has seen it take hold," Sezzle CEO Charlie Youakim told The Business from his base in Minneapolis.

"They understand how powerful it can be and they already can see what's happening internationally with it."

The ASX is recruiting companies just like Sezzle.

"Tech is the future," said Max Cunningham, the executive general manager of ASX listings.

"We're in the digital age. So this is an important part, a cornerstone, of our future, in terms of our position as a global capital market."

Technology stocks currently make up 2.4 per cent, or about $50 billion of the $2 trillion worth of companies listed on the ASX.

But the exchange wants that to grow.

"Our goal is to bring more investment-grade companies to market to create greater diversity," Mr Cunningham explained.

"I think it would be great if we can get, over the next decade, a tech cohort in this market in the high-single-digit percentage of the market."

Growth phase

There has been some solid growth in the sector.

"We see it as about 250 stocks," said Owen Humphries, a technology research analyst with Canaccord Genuity.

Owen Humphries is a technology analyst who says the number of tech stocks has doubled in five years. ( ABC News: John Gunn )

"That's doubled in the past four or five years.

"What we're seeing is a lot of companies coming to the exchange looking for capital to grow and the value of the companies [has increased] from $30 billion, excluding some of the telcos, to $90 billion."

A low-interest environment has helped push equity markets higher, and this week the All Ordinaries finally surpassed its pre-financial crisis highs.

"The market's trading at 4 to 4.5 per cent growth over the next three years," explained Morgans equity analyst Andrew Tang.

Break that down by sector, and tech is more than double that.

"If you compare that to the tech sector, we're getting closer to 11 per cent growth," he said.

The ASX as a baby Nasdaq

The ASX is targeting smaller companies that would not be able to list on the Nasdaq.

"ASX is trying to position ourselves as a late-stage VC [venture capital] funding market with companies that have de-risked their model, have proven their revenue and are looking to scale their businesses and potentially go public to provide liquidity for their shareholders and acquisition currency," Mr Cunningham said.

That is great news for Mr Youakim and his company, which will launch its IPO on the ASX on July 30.

"The ASX is more accepting of younger tech companies, which we're at a bit of a younger stage compared to many other tech companies that tend to enter the Nasdaq," he said.

Israel-based AppsVillage, headed up by CEO Max Bluvband, is also courting Australian investors.

AppsVillage CEO Max Bluvband is hoping to create a billion-dollar company. ( Supplied: AppsVillage )

"We saw that the Australian investors really know to appreciate the Israeli technologies and talents," he said.

"There are several very successful Israeli technologies that have listed on the ASX."

For a monthly subscription, AppsVillage allows small and medium businesses to create an app without the need to pay a developer.

"The Australian market is very keen to see fast-growing companies and combine that we are a global company, we see it as the perfect match both for Australian investors and us as a growing company," Mr Bluvband told The Business.

Super pool of capital

Australia is one of the best sources of capital in the world, thanks to compulsory superannuation.

While resources and financial stocks will continue to draw the lion's share of that cash, tech is the fastest growing sector on the ASX.

This week WiseTech, one of the top five ASX tech companies known as the WAAX stocks, was the first to cross over the $10 billion market cap threshold.

But growth like that is rare and many newly listed tech companies are yet to even make a profit.

"Of the 250 stocks that we look at in this sector, there's only about 60 or 70 that have revenues greater than $10 million," explained Mr Humphries.

"So, we do have this crowding effect where people are looking for these global, high-growth businesses but there's only a limited amount they can invest in."

That has led to some pretty big highs, and even bigger falls.

"Between October and December last year, which was only six to nine months ago, during that three-month period, some of these stocks fell by 40, 50, 60 per cent," Roger Montgomery from Montgomery Investment Management observed.

"It can happen very, very quickly. You can wake up in the morning and it's started — you don't see them rolling over, they've rolled over."

He said there are too many profitless tech companies and investors are at a high risk of being burned.

"Over the last year-and-a-half, if you bought all of these profitless tech stocks, the unicorns, if you bought them on first day of listing, in aggregate, you're under water now," he warned.

"It really is buyer beware."

Tech growth 2.0

This is not the first growth phase for tech on the ASX.

In the 1990s there was the dot-com boom, rapidly followed by the bust in 1999.

"If there's a bubble coming, I think it's like 1995, not 1999," said Stuart Roberts from Pitt Street Research.

"Remember in 1999, everyone was talking about it in the general community.

"Now, possibly in the financial markets, we're talking about the tech opportunities, but that talk hasn't got out to the general market of mum and dad investors.

"I'd give it several more years before we get to that point."

Mr Tang agrees risks are building but believes we are not about to see a tech bubble burst.

"We're not quite in bubble territory," he said.

"It's elevated and the risks are elevated, and we've seen the price reactions when companies tend to disappoint, they come off quite quickly.

"So, I do think investors need to be aware of the risks."

They are risks Mr Bluvband is prepared to take in the search for capital.

"We are based on the clear path of revenue growth and providing a very important solution to the market," he said.

"So, if there is a bubble, it's ok, but we are less focused on it.

"We are focused on building a very big company. A billion-dollar company, hopefully."