Weekly Wrap #84: $10bn adventures, a 2 YO unicorn & raising advice
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2021: The $10bn Aussie venture adventure
Cut Through Venture and Folklore released the inaugural State of Australian Startup Funding 2021. The impressive 86-page report presents a year’s worth of funding data alongside insights from over 850 Australian startup investors and founders.
“2021 will go down in the annals of history as the year when the Australian startup ecosystem earned its seat at the adults table.”
Chris Gillings, Founder/Editor - Cut Through Venture
Echoing trends around the world, 2021 saw more deals at every stage, more capital, more investors, faster funding founds, higher valuations, but stagnated progress on the gender front.
The top line: Australian startups received more than $10bn across 682 deals in 2021 - up 3.2x on 2020’s $3.1bn.
Trending: Fintech startups accounted for 25% of funding. Blockchain, crypto & Web3 startups saw the largest percentage gain in deal count (20 up from 1 in 2020). Likely to trend in 2022? CleanTech - it’s a top priority for more than 38% of investors, which we’re already starting to see play out.
More investor competition: Across all deals, 891 investors participated (up 87% YoY). 24% of deals had at least one international investor - Tiger being the most active. Half of investors reported faster due diligence/time to term sheet.
Continuing gender gap: Only 19% of deals involved founding teams with at least one woman. These deals received 22% of total funding. A whopping 82% of women surveyed believed their gender impacted their ability to raise funds and, despite 90% of investors expecting startup funding activities to increase in 2022, just 10% of women feel “highly confident” about securing their next raise. That compares to 63% of male founders. The report doesn’t break down gender stats amongst VC check writers, however 83% of angel investors were men.
So, our advice to early-stage founders based on all this data?
It’s clearly a great time to be raising, but don’t underestimate the effort and time commitment still involved, particularly if it’s your first startup. It will take your (near) full-time attention for a few months - sometimes longer.
Treat raising as a sales process. Understand your target market (the investors you’re seeking to attract), the buyer (the check writer) and their influencers. Tell a story that will resonate with them, supported by data. Practice your pitch so it is delivered with full conviction. Set deadlines to create a sense of urgency and fomo. Remember, if an investor doesn’t say “hell yes” fairly quickly, it’s probably a “no” - move on.
With the influx of new investors, it’s more important than ever to do your own due diligence back on the investor/s. You can do this by speaking to other founders they’ve invested in or companies they’ve advised - how supportive have they been in the good and bad times? Be particularly careful if this is their first startup investment.
Local newsings: Barbie, Sezzle Sizzle & Space
BNPL Sezzle Sizzle. Aussie BNPL giant Zip will acquire Sezzle in an all stock deal valued at $491m. Sezzle shareholders will hold around 22% of the combined company. Sezzle is a SME-focussed BNPL headquartered in the US. To part fund the deal, Zip is raising nearly $200m through a share placement and a share purchase plan. Zip’s revenue for the six months ending December 31 was $302m (up 89% YoY), but gross profits were down 23% due to bad debts and credit losses. Loss after tax was $214m.
#1. Adore Beauty CEO Tennealle O’Shannessy took out number one spot in Inside Retail’s 2022 Top 50 People in E-Commerce. The ranking is based on candidates’ achievements from the last 12 months in commercial success, knowledge sharing, innovation, and broader impact. Panel judge Peta Granger commented:
“The financial results driven by Tennealle were as impressive as her efforts to highlight inequality across the beauty industry. Launching innovative podcasts, a loyalty program, and mobile app reinforced Adore Beauty as the destination for beauty discovery, whilst website personalisation transformed the customer experience.”
Backing Blak NFTs. Provvy is the first startup to receive backing under Startmate’s new $920k Small Bets fund, which aims to increase the number of startups led by underrepresented founders. With a focus on helping Indigenous artists, Provvy will use NFTs to license and sell artists’ work. The genesis for Provvy came about while founder Alisha Geary was running her other business, Faebella, an activewear label that incorporates various Indigenous Australian artwork. Provvy raised $25k from the new fund and will receive a further $120k under Startmate’s Summer 2022 accelerator.
Role models. Chair and cofounder of Smiling Mind, Jane Martino, is being forever immortalised in the form of a Barbie. Martino is a serial entrepreneur, startup investor, advisor and author.
To the moons. Quantum tech developer Q-CTRL, nano-satellite maker Fleet Space Technologies, rocket producer AT Space and electric flying racing car manufacturer Alauda have been awarded a $20m grant under the Australian Government's Modern Manufacturing Initiative to co-develop an Australian Space Manufacturing Hub in Adelaide.
Uber kiwi. NZ-based PredictHQ’s demand intelligence platform is part of the tech powering Uber’s new Uber Explore functionality that lets users browse and book experiences directly through the app, e.g. dinner reservations, shows or live events. Uber Explore is only available in parts of the U.S. and Mexico at this stage.
Local raise round up
Zeller raised $100m led by US-based VC, Headline. Just two years old, Zeller is now the official owner of the title: ‘fastest Aussie startup to hit AUD unicorn status’. Zeller wants to become a one-stop shop for business banking needs and currently offers debit cards, business banking accounts and payment terminals. It plans to eventually become a fully licensed bank, offering online payment acceptance, credit cards and expense management services. Zeller has more than 11,000 business customers.
NP Fulfilment received investment from Woolies’ VC arm W23. W23 will take a 40% stake in the 20 year old order fulfilment company, which specialises in inventory management, robotic pick and pack services and warehousing. W23 chose to invest in the company after using NP Fulfilment for Woolies’ ecommerce play, Healthy Life.
Plnar raised from IAG’s Firemark Ventures. Plnar uses computer imagery to create 3D renderings of home interiors which allows anyone with a smartphone to document interior property damage, enabling virtual and self-serve property claims.
Calven raised $6.8m led by AirTree. The startup aims to remove the frictions associated with hybrid work by fusing together tech for employee experience and workplace operations.
Socialsuite raised US$4.25m (A$5.8m) for its ESG and social impact software disclosure platform. Austin-based Pixiu Investments led the round, with follow-on support from Tidal Ventures.
Pickstar Group raised $5m for its AFL & AFLW talent marketplace and ‘activation’ platform.
CryptoTaxCalculator raised $4m to help crypto traders navigate the complexities of filing their taxes.
Restocq.com raised $2m led by Airtasker cofounder Jonathan Lui for its online procurement platform for dentist products.
Language Confidence raised $2m to help people learn to speak English.
Her Black Book raised $1.6m for the curated shopping and discovery app founded by the two sisters behind Stylerunner.
IAG is committing $75m to create a second fund under its VC arm, Firemark Ventures. To date, Firemark Ventures has made 33 investments across 18 portfolio companies, from which it has embedded 13 new technologies and data capabilities within IAG.
NZVC reached a first close of $10m for “New Zealand’s first operator-run fund,” which will target the Seed to Series A gap, focused on B2B SaaS, deep tech, marketplaces and the web3 space. The investor base is impressive, but there’s a noticeable lack of women - AngelList founder Naval Ravikant, Foundry Group’s Brad Feld and Ryan McIntyre, Disney COO Tom Staggs and Skype founder Jaan Tallinn.
Main Sequence led RIOS Intelligent Machines’ US$28m Series A. The US company creates end-to-end AI-powered robotic work cells for factory automation and plans to expand into Australia.
Around the world: Tech’s response to Russia
A quick round up of some of tech’s global effort to support Ukraine:
Ukrainian-based satellite data firm EOS Data Analytics (EOSDA) has been working with satellite mapping companies to understand Russian troop movements.
Ukraine’s vice PM, Mykhailo Fedorov, tweeted Elon Musk. The billionaire sent help in the form of a truckload of Starlink Dishys (satellite dishes) and its space internet service. However Musk soon warned that Russians may target Starlink users by triangulating their signal.
Apple stopped selling products and cut off Apple Pay in Russia. Outside of Russia, it has removed Russian state-controlled news apps from its App Store.
Google and YouTube have stopped monetising ads on Russian state-controlled websites and channels.
YouTube, Meta and Twitter are deplatforming Russian state-controlled media in the EU, following bloc sanctions.
Globally, Meta is also demoting posts with links to Russian state-owned media. It is also rolling out encrypted DMs for users in Ukraine and Russia (vital for organising resistance).
Spotify closed its Russian office.
Social media users are debunking fake videos and photos in real time.
The open-source community is crowdsourcing intelligence on GitHub.
That’s a wrap! We hope you enjoyed it.
Bex, Gavin and the team at Ignition Lane
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