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Trade sale lessons from the gurus
Lots of ANZ M&A news this week. Quick stats: 1/2 of these deals involve a “guru.” 3/4 didn’t disclose a $ sale price (forcing us to put our investigatory detective hats on to find out more). 100% acquired by non-ANZ companies.
Lesson 1: Make ‘em an offer they can’t refuse. A Cloud Guru is being sold to Utah-based workforce development company Pluralsight, in a deal worth more than AU$2 billion. Wowowow - a phenomenal achievement considering the startup is only five years old!
A Cloud Guru is an online learning platform for cloud tech (e.g. AWS, Azure, Google Cloud) founded by Melbourne brothers Sam and Ryan Kroonenburg out of a bedroom (classic unicorn move). It serves 2.5m learners and over 4,500 organisations, who bring in AU$116m in revenue. A fairly simple idea, huge customer need and extremely well executed with perfect timing.
The brothers aren’t the only big winners from the sale - the company has raised $55m in funding to date from AirTree Ventures and US-based Elephant Venture Capital, Summit Partners and Bain Capital.
Lesson 2: If you can’t beat ‘em, join ‘em. PropertyGuru and REA Group are joining forces in Malaysia and Thailand. Square Peg-backed PropertyGuru has agreed to acquire all of the shares in REA’s operating entities in Malaysia and Thailand in exchange for an 18% stake in PropertyGuru. PropertyGuru last raised US$220m KKR and TPG in September 2020. There were mumblings of a US$1b SPAC in March after a last minute decision not to proceed with an IPO on the ASX in 2019. This deal likely buys some extra fuel to fire up revenue for an even bigger listing down the track.
Lesson 3: Know when to hold ‘em (aka bootstrap). Auckland-based ezyVet has been sold to Nasdaq-listed pet company IDEXX Laboratories for an undisclosed sum. NZ Herald reports the valuation is over NZ$100m. ezyVet was founded in 2006. Its vet practice management software is used by over 50,000 users globally. The company, which has more than 180 staff globally, and is bootstrapped and wholly owned by founder Hadleigh Bognuda. ezyVet is Bognuda's third start-up - he also founded Think Concepts, a pharmacy software system, and co-founded boutique ISP provider Vibe Communications.
Lesson 4: Don’t stop believin’. Stackla is being acquired by Finnish company Nosto for an undisclosed all stock purchase price. Stackla aggregates user-generated content for marketing purposes (social hubs, social ecommerce, live events, competitions, social ads, data vis). It nearly went under in 2019 when Facebook accused it of “scraping” and banned it from accessing public data generated on Facebook and Instagram. Facebook overturned the ban six weeks later, but significant damage had already been done. Investor Bailador wrote its investment down from AU$12.6m to $0 at the time.
In September Bailador increased the value of its “significant minority” investment to $11.5m, and that valuation remains unchanged as a result of the deal. So, no ‘outsized’ return, but not a terrible result either. Rampersand, Alium, Macdoch and Asia Pacific Growth Management are also investors.
Other Aussie news
More than a word. Indigital showcased how it is taking the lead in bringing Indigenous cultural knowledge, history and language to life though AR, Minecraft and Python coding in schools.
Harvey Norman cancelled itself. Harvey Norman is in a spot of bad PR. The retailer is refusing to pay back $22m in JobKeeper (profits rose 116% to $462m during 2H2020) and employees have been protesting outside of store to demand pay rises. #BoycottHarveyNorman began trending on Sunday night on the tweetersphere.
And the Harvey Norman Twitter account controller essentially lost the plot, with rude responses and mass blocking of other accounts. They tweeted a kissing emoji in retort to one tweet critical of the mass blockings. And responded thoughtfully with a face palm + bye emoji to someone who said that working for the company “drove me to suicide in 6 months”:
The Twitter account has since been deleted. You’re on mute.
Above: Footage from our Zoom interview with Gerry ‘Yolo’ Harvey.
Brands swipe right. Collabosaurus launched a brand collaboration matchmaking app after 2020 proved to be ‘The Year Of The Brand Mashup’. Customers include Magic Mike, ASOS, The Iconic, Pinterest, Marks & Spencer and Bondi Sands. Collabosaurus’ revenue doubled in 2020, and is set to double again in 2021. Founder Jess Ruhfus has to be one of the most resilient young founders in Australia. After battling to raise capital in the early years, she says that “being pushed into a corner financially” helped her build a better business. She listened to customers, stuck with her conviction that collabs are the future and has become laser focus on ROI. As a result the business is now profitable and she’s ready to take Collabosaurus to the next level.
People moves. Xero Australia and Asia MD Trent Innes is stepping down from his role. Xero EGM Global Sales Joseph Lyons has been appointed to the role from 1 July 2021. Former CEO of eBay Australia, Alison Deans, will become Cochlear’s new Chair. Speaking of eBay, its ANZ revenue only rose 2.5% to $62.3m in 2020 (it grew 26% in 2019).
SheEO Venture applications are now open. 0% interest loans and coaching support for women-identifying entrepreneurs. How?
Our model brings together hundreds of radically generous women called Activators who contribute $1100 each (or twelve monthly payments of $92) for Australia, Canada, New Zealand and the USA; or £850 (or twelve monthly payments of £71) for the UK. That money is pooled and then loaned out in the form of 0%-interest 5 year loans to women-led Ventures whom the Activators help select. As the money is paid back into the fund, it’s loaned out again to support more women-led Ventures each year.
Tixel raised $1.5m for its resale marketplace for second hand tickets in Australia.
CloudWave raised $2m for its contact centre software.
ListingLoop raised $3m for its marketplace for pre-market and off-market properties.
Expense Check raised $4m and changed its name to Kanopi. Kanopi offers data-based insights to major insurers, so they can offer more tailored policies to their customers.
Paytron raised $4.35m for its SMB bill payment solution.
Travello raised $6.5m from a bunch of travel and tourism dudes. Travello recommends experiences, and enables users to book over 40,000 tours, attractions, and activities.
Volt raised $15m and secured a strategic partnership with AFG.
Telstra Ventures invested in LambdaTest’s US$16m series B (led by Sequoia). LambdaTest is a web app testing platform founded out of India in 2017. Telstra Ventures is now independent from Telstra but still counts the telco giant as an investor. More on them in the AFR last week:
Established by Telstra in 2011, Telstra Ventures has an impressive track record. The 73 investments it has made have resulted in 27 liquidity events (either a sale, merger or float), with 12 of those achieving unicorn status – a valuation above $US1 billion ($1.3 billion) – and a handful, including $65 billion cyber-security giant Crowdstrike, going on to be worth more than $US10 billion.
Tenacious Ventures closed its $35m agritech fund, with backing from Grok Ventures and the CEFC. This looks to be a top up vs a full new fund.
Around the world
What Depop? Etsy is buying Depop for $1.6bn. If you’re over 26 and not in ecommerce you’re probably asking, wtf is Depop?
Depop has become the secondhand marketplace for millennial and Gen Z consumers. It has over 21 million stylists, designers, artists, collectors and sellers, some of whom also repurpose vintage clothing, adding a handmade component to certain products, a la Esty. In 2020, Depop made $70m in revenue. So for Etsy, this is a big bet on the future of secondhand fashion and a play to remain relevant with younger customers.
Prosus will acquire Stack Overflow for US$1.8 billion. Prosus is the international assets holding arm of South Africa’s Naspers, which is the primary shareholder of Tencent (earlier this year it sold a 2% stake of Tencent for nearly $15bn). Stack Overflow is a leading Q&A website for programmers founded in 2008. It has 10m visits per day.
Twitter’s dead horse. Twitter unveiled its first subscription product, ‘Twitter Blue’, which is initially available Australia ($4.49/mo) and Canada ($3/mo). We’d be surprised if anyone signs up. The best feature is the ability to undo a tweet within 30 seconds of sending it. Whoopdedoo.
1Q2022 results. Asana’s revenue rose 61% in the April quarter to $76.7m. It increased revenue guidance to $336 - $340m. GAAP operating loss was $50m, or 65% of revenue, compared to $29.1m (61% of revenue) 1Q2021. Slack continued a steady slowing in growth, with revenue growth of 36% to $273.4m for the quarter. GAAP operating loss was $55.3m or 20.2% of revenue.
Masayoshi Son’s penchant for mismanagement? After burning through more than US$2bn, SoftBank-backed construction startup Katerra is shutting down. Katerra aimed to bring “the Silicon Valley approach to building,” by reducing reliance on skilled labor and automating the building process. The company, which was run by a tech veteran with no construction experience, was plagued with problems plastered over by dodgy accounting practices. Now it’s expected Katerra will let go of thousands of employees and walk away from dozens of construction projects.
Tesla Tea. Tesla applied for three new trademarks that will cover the categories of “restaurant services, pop-up restaurant services, self-service restaurant services, take-out restaurant services.” Fun fact: Telsa wouldn’t be the first auto-related company to venture into restaurants - the Michelin Guide was invented by tyre brothers Andre and Edouard Michelin in 1900 to entice people to travel to new restaurants. Stars were introduced in 1926 - one star signifies "a very good restaurant", two stars are "excellent cooking that is worth a detour", and three stars mean "exceptional cuisine that is worth a special journey.”
Roller skate waiters might come in handy in Port Kembla, NSW…
Toyota Ventures plants to invest an additional US$300m in emerging technologies and carbon neutrality via two early-stage funds.
African fintech is hot. The cost of sending $200 from Tanzania to Kenya and Uganda can average between 17-21%. One of the startups working to improve African cross-border payments is Chipper Cash, which has over 4 million customers making 80,000 transactions per day. In June last year, Chipper raised a US$13.8M Series A (Steve Baxter's family office and investment syndicate TEN13 participated). Now, just a year later the startup has closed a US$100m Series C - valuing the three-year-old company at over US$1b. From TechCrunch:
Fintech remains the bright spot in African tech investment. In 2020, the sector accounted for more than 25% of the almost $1.5 billion raised by African startups. This figure will likely increase this year as four startups have raised $100 million rounds already: TymeBank in February, Flutterwave in March, and OPay and Chipper Cash this May. All except TymeBank are now valued at over $1 billion, and it becomes the first time Africa has witnessed two or more billion-dollar companies in a year.
Fintok explains NFTs:
That’s a wrap! We hope you enjoyed it.
Bex, Gavin and the team at Ignition Lane
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