Weekly Wrap #79: The Wrap of Wraps; Rokt Rocks; Deals & Steals
Weekly Wrap #79: The Wrap of Wraps; Rokt Rocks; Deals & Steals
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The wrap of wraps
Our annual wrap of weekly wraps
2021 was a year for new records! In Australia we saw:
The largest M&A deal: Afterpay made a deal to be acquired by Block (fka Square) for $39bn.
The highest valuation for a software company: Canva raised $278m at a $55bn valuation just 8 years after being founded, propelling its founders Melanie Perkins and Cliff Obrecht into the top 10 Rich List. Last we heard, Canva is on track to achieve $1bn in annualised revenue this year.
The most VC money ever deployed: The list of ANZ startups being funded each week just keeps getting longer. Over $8.5bn has been deployed by local and global VCs in Australia alone. Andreessen Horowitz (a16z) made its first ever Aussie investment (Pyn). Tiger, Accel, Sequoia, Level Equity and Insight have also been busy bees down under. The range of industries and startups being funded is broadening, too - quantum, space, food, health/biotech, agri, green energy, crypto, DeFi. 2022 is shaping up to be even bigger, particularly if Aussie’s big three VCs—Blackbird, Square Peg and AirTree—raise their next funds (expected to raise over $2bn).
Aussie startups deliver world firsts: Skedulo helped schedule millions of Covid vaccine appointments. Swoop Aero delivered the first malaria vaccine. Fleet launched a tiny, powerful nano satellite into space.
What else? (apologies in advance to anyone else we might have missed below)
The rise of the growth round and several new Aussie unicorns: SimPRO $485m, ROKT $458m, Airwallex $557m (three rounds over the year), Canva $278m, Octopus Deploy $221m, ScalaPay $210m, Go1 $273m, Employment Hero $140m, Culture Amp $135m, Harrison.ai $129m, Till Payments $110m, Skedulo $100m, SiteMinder $100m, Safety Culture $95m, Athena Home Loans $90m… too many to name.
Talent wars: While everyone leaves corporate land in the Great Resignation, Canva, Airwallex, Xero, all the tech cos are eating up startup talent in order to keep fuelling growth. It’s a great time to be a developer / designer / product manager / anyone with tech experience. Meanwhile, Startmate and the Tech Council are working hard to help solve this talent shortage.
Exits galore; IPOs were hot (now not): Monster acquisitions for A Cloud Guru $2bn, MessageMedia $1.7bn, Seequent $1.45bn, Invoice2go $850m, Vend $450m and plenty of strategic M&A, e.g. Dixa and Elevio. The IPOs and SPAC hunt continued: Siteminder, Airtasker, MadPaws, Allbirds, Rocket Labs. However we’re now seeing deal fatigue set in, with many IPOs delayed or cancelled: Vinomofo, CompareClub, HealthEngine, MySale, Marketplacer (raised last week) and SocietyOne (acquired this week - see below).
More funding options for founders, a.k.a. everyone wants a piece of the startup pie: The range of VCs, angels and non-VC options have exploded. Revenue-based financing and venture debt is now in full force: Tractor Ventures, Lighter Capital, PFG, OneVentures and even BNZ. SecondQuarter closed $51m for Australia’s first secondary fund, providing founders and early investors a means to cash out early instead of forcing an exit. We saw oodles of new funds raise at breakneck speed: AfterWork, Jelix, Touch, Skip, Folklore, Investible, Giant Leap, King River, Icehouse, Climate VC Fund, Our Innovation Fund, Tenacious, Main Sequence to name a few. Current founders are spreading their angel wings and starting to actively invest in other startups, e.g. founders from Who Gives a Crap, Practice Ignition. Plus, private equity continues to step up its startup game.
A handful of women promoted to General Partner (aka check writer): Rachel Yang (Giant Leap), Elicia McDonald and Jackie Vullinghs (AirTree), Chelsea Newell and Samar Mcheileh (co-CEOs at Scale). Creating their own path to General Partner, Rachael Neumann and Kylie Frazer launched Flying Fox, and Kate Vale and Marisa Warren launched ALIAVIA Ventures.
Around the world
Web3: We touched on this last week so won’t go into detail, but a few mind-blowing stats: A decentralised autonomous organisation (DAO) raised US$47m from people around the world in a few days to buy the US Constitution. Over US$13.7bn worth of NFTs have traded hands on OpenSea this year. The world’s first Bitcoin ETF hit the markets, topping US$1bn in assets in just two days. Blockchain and crypto became a cornerstone of a16z’s multi-billion dollar investment strategy, with deals increasing 7x compared to 2020.
On and off again: Clubhouse. SPACs. IPOs. The price of Bitcoin. Chinese public tech valuations. Zoom - oh, we mustn’t forget the cat filter legal proceeding:
Lawyer: “I’m here live. I’m not a cat”
Judge: “I can see that”Creator economy: Twitter, Spotify, TikTok are just a few of those to release new products to help creators make money this year. Giant valuations for Patreon, Clubhouse, MasterClass, Substack, Cameo, Roblox and OnlyFans.
Chip shortages: Still causing chaos for supply chains around the world, the chip shortage flowed from 2020 into 2021… and beyond. The shortage has affected industries from auto to game consoles and networking gear to medical devices.
Big tech gets bigger: Apple’s market cap is approaching US$3tr, Microsoft was worth more than Apple for a hot minute, Tesla hit US$1tr, Google hit $2tr.
Elon Musk: Elon Musk is TIME's 2021 Person of the Year. Love him or hate him, he has influence - we’ve lost count of the number of times he’s trolled Twitter or sent the price of stock and crypto to the moon. And he sure seems to be able to build companies that deliver visionary new products, fast. SpaceX launched the first-ever mission to Earth’s orbit with tourists and no professional astronauts. Teslas have taken over the streets of Melbourne and, partly due to its share price, Musk became the world’s richest person.
There you have it - one year in tech. A wild ride!
Local deals & steals this week
MoneyMe is acquiring SocietyOne. We were expecting SocietyOne to IPO at some point, but instead it is being acquired by ASX-listed MoneyMe - bringing together two of the biggest names in the personal loan space. The deal is rumoured to value SocietyOne at $132m, and will allow the two groups to combine resources and distribution.
Spotify is acquiring Whooshkaa. Another podcast tech deal for Spotify: Whooshkaa is a Sydney-based all-in-one platform for hosting, managing, distributing, promoting, monetising and measuring podcasts. However Spotify is most interested in Whooshkaa’s proprietary tech that allows radio broadcasters to easily turn their existing audio content into on-demand podcast programming. There’s big money to be made in podcasts.
RapidPay is acquiring QuickaPay. RapidPay provides online payment solutions for legal practitioners, QuickaPay is a BNPL = BNPL for the legal industry.
ConX has been acquired by Houzz. ConX is a Sydney-based construction tech start-up that helps contractors make quote estimations. Houzz is a Palo Alto-based home renovation and design platform. For home professionals, the acquisition of ConX helps fulfil the most requested feature on the Houzz Pro platform: takeoffs. The tool enables contractors to do on-screen takeoffs from construction plans and turn them into professional estimates up to 10x faster.
Kogan sold the domain name bitbuy.com to Bitbuy's parent company, First Ledger, a Canadian cryptocurrency trading platform that plans to set up in Australia. Kogan will receive US$1.5m in cash and a warrant that can be triggered within a year of the transfer entitling it to approximately CA$2.8 million in either equity (and therefore some crypto exposure) or cash.
Local raise round up
Rokt raised US$325m (A$458m) led by Tiger Global, valuing the company at US$1.95bn, making it the third most valuable Australian private tech company. Founded in Australia in 2012, Rokt is an ecommerce tech platform that helps brands increase order values, grow engagement and make money from affiliate links. If you’ve ever made a purchase and been greeted with a pop up ad offer, that’s likely Rokt’s tech. Rokt works with more than 3,000 brands globally, including Live Nation, Groupon, Vistaprint and Ticketmaster, and expects to finish the year with US$230m in revenue. Founder and CEO Bruce Buchanan describing an enviable raise process:
“It was a two-week process, we picked the three best players who had gone deep [on the business].”
Inventia Life Science raised $35m led by Blackbird. Inventia creates advanced 3D cell cultures for research and clinical use. Cofounder and CEO Dr Julio Ribeiro:
“New drugs [can] be tested in a 3D cellular environment and eliminated if necessary, long before they reach the stage of clinical trials… Similarly, cancer researchers can now work at scale with cell models that mimic the human body almost exactly and produce research results that are more accurate and predictive than before.”
DiviPay raised $20m for its all-in-one spend management and expense solutions for SMBs.
Trovio Group raised $20m led by Ellerston Capital, Sun Hung Kai Strategic Capital and Amherst Holdings. The group is a merger of Sydney-based digital asset manager and adviser TCM and technology developer Trovio, and will offer asset management (focussed on decentralised finance protocols), advisory (crypto tech investment & operations) and licensing (tokenisation technology).
Whip Around raised US$14m led by Punakaiki Fund (NZ) and Amplo (Texas). Whip Around aims to replace the paper-based fleet inspection process with a digital one that makes it easier to track progress over time, hold employees accountable and predict future maintenance needs.
VOLY raised $18m from Sequoia India for its online grocery offering, which has expanded to 42 suburbs across Sydney.
CT4 raised $12.5m. Formerly known as Canopy Tools, CT4 has a range of products: Australia’s first private cloud, an IoT data collection and control platform, and a Microsoft 365 back-up automation tool. In 2021, the business generated $21.1m in revenue.
Provectus Algae raised $11.4m. Provectus Algae makes novel species of microalgae, which can be used in a range of products including food colourings, flavourings, crop protection and feed supplements, and medicines.
Haventec raised $11m and launched their expansion into the US market after seeing strong demand for their passwordless authentication and data storage solutions.
Complexica raised $11m to develop software and IoT products for ports.
Atomi raised $9m led by Our Innovation Fund. Atomi is an online teaching and learning platform that offers video lessons, interactive quizzes and AI-powered revision.
6clicks raised $5m for its risk and compliance operating system.
Replica Studios raised $5m. Replica Studios creates naturally expressive voice-overs using AI that can be adapted and scripted by game developers and animators - “It has to be heard to be believed.”
ProForm Foods raised an undisclosed amount (rumours say $5m) from Andrew Forrest’s family company Harvest Road for its plant-based meat products.
Dataro raised $2.5m led by Basis Set Ventures, Black Sheep Capital and Save The Children. Dataro wants to help charity fundraising become more efficient - starting by providing charities with analytics to determine who to chase for donations.
Relay raised NZ$2.5m led by Icehouse with participation from Blackbird. Relay's vision is to eliminate late payments by using cashback to encourage businesses to pay their invoices promptly.
Runn.io raised $2m to help project managers plan, track and forecast staffing capability and capacity.
Croptide raised NZ$1m. Croptide’s tech that transmits plant water health to a farmer’s phone instantly is being trialed by leading NZ wine grape growers.
Empiraa raised $637k. Empiraa, which will launch next year, combines organisational visibility with KPI accountability to create a culture of autonomy within the workplace.
Investor news
Blackbird made its funds’ returns public. Blackbird, which will celebrate its 10th birthday next year, revealed that it has turned $1.3bn into a portfolio valued at over $10bn and that the net IRR of a dollar invested in all funds is 81%. Smart PR move when you’re raising a new fund and your returns look that good.
LaunchVic’s Alice Anderson Fund announced its first round of investments. The fund co-invests between $50,000 and $300,000 in early-stage deals. The first startups to receive investment are Team Timbuktu (D2C outdoors brand), mtime (marketplace for ‘Moncierges’ - people who can do errands, chores, cleaning and babysit), Steppen (social fitness platform), TalkiPlay (a speech and language program to develop kids language) and Milkdrop (a wearable breast pump).
Lighter Capital has been appointed manager to deliver the VicGov’s Venture Growth Fund (the other is Sydney-based OneVentures). The Government will allocate $10m to the Lighter Capital Fund, plus $20m from private investors and $1.6m from Lighter Capital as equity capital. Lighter Capital provides up to $3m in revenue-based financing via a fast online application process.
This was just the beginning. In 2006:
YouTube had 50 million users
Facebook had 12 million users
Twitter had thousands of users
There was no Insta, TikTok, Snapchat or Pinterest
The iPhone and first Samsung touch phones had not launched
What will the next 15 years have in store for us?!
That’s a wrap for 2021! Fear not, we’ll be back in a few weeks with an extra special summer series sharing the insider take on what M&A is like as a startup founder.
Thanks for joining us this year. Your support and feedback means the world to us.
Bex, Gavin and the team at Ignition Lane
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