Wrap 103: Squashing angels, battling beasts & trolling Musk
The Wrap is back for 2024! Trending: preventative health, deepfake scams, secondaries, Microsoft shares, shopping on TikTok, and of course AI
Welcome to our Wrap, where we cut through the noise to bring you our favourite insights from the technology and startup world over the past month.
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Regulators, mount up!
You can't be any geek off the street. The government is considering raising the threshold for ‘sophisticated’ investors. It’s proposed that the minimum income threshold be raised to $450k (up from $250k) and net assets up from $2.5m to $4.5m. Everyone in startupland agrees this is really bad news for angel investors and startups, and argues that introduction of a knowledge test is more appropriate. Capital Brief:
[it’s] devastating. It’s likely to sideline more women, young people and other under-represented groups from generating wealth and putting their money in areas they know best.
You can sign a petition against the move here.
“A little light and a little late.” The federal Minister for Industry and Science Ed Husic revealed an interim response from the Australian government on the safe and responsible use of AI. It plans to develop risk-based guardrails, safety standards and voluntary labelling in consultation with industry. General consensus from the tech sector is that this is an ok (yet slow) start to addressing the risks that AI poses, but the government is still not doing to encourage AI innovation in Australia.
Some good news for our skills gap. Startups backed by a registered VC fund will be able to sponsor foreign workers, as a part of Australia’s latest migration strategy.
Local births and marriages
Riding the coattails of Huberman and Attia. Preventative health has become big business, thanks in part to the rise of podcasts sharing the latest health and food science research. Full-body M.R.I. scans screening for early signs of cancer, aneurysms, liver disease and MS, like those offered by Prenuvo (founded by an Aussie) are taking off in U.S. tech and celebrity circles - not without controversy since M.R.I. was designed for diagnostics, not screening. AG1 / Athletic Greens (a unicorn nutritional drink company, founded by a kiwi) has almost become a household name after being plastered over every podcast out there.
Now Australian startups and investors want to cash in on that trend. Eucalyptus is adding to its ‘house of consumer health brands’ launching Compound, a preventative health service only for men - data-driven, personalised and integrated health recommendations. In December, Everlab raised $3m for a similar offering for people of any gender.
p.s. for all you Huberman fans out there, the big dog is coming to Australia in Feb.
ick. Blackbird-backed Kiki shut down its troubled home subletting business (which it tried in NZ, Australia and then NYC) and, despite being run by men only, is pivoting to a NYC ‘girl’s club.’ Problematic in so many ways.
Camp Canva. Canva announced plans to build a new campus in Surry Hills, Sydney for its growing team, which now numbers more than 4,000 people globally.
Acquisitions. Brisbane-based engineering document management RedEye has been acquired by workplace and asset management solutions provider Accruent. Linktree, which now has around 40 million users, acquired link-in-bio competitor Koji. It also acquired Sequoia-backed Bento last year.
Venture land
2023 figures are in. According to PitchBook, global VC funding fell to roughly US$345bn in 2023, down from $531bn in 2022. The decline in VC fundraising was even steeper, with firms collecting US$161bn vs $307bn a year ago.
Reminder: VC funding isn’t for everyone. Square Peg founder Paul Bassat commented to The AFR “if you’re a top quartile company, you’re going to get funded pretty easily.” Simples. Except maybe if you’re a startup in the metaverse space, where almost no new deals are being made. Funding for AR, VR and consumer-focussed startups is also on the decline globally.
New funds. Five V Capital closed its Five V Fund V with $770m for ANZ startups and mid-market businesses. Ex-Perpetual portfolio manager Thomas Rice and ex-Grok Ventures portfolio manager Armina Rosenberg co-founded Minotaur Capital, “a technology-first, software-driven fundamental investment firm” and plan to launch a global long/short equities fund in March.
Secondaries on the rise. Big secondary share sales (where existing shareholders sell their shares vs the company raising funds) announced at Canva, Pay.com and Employment Hero. The announcements also give some insight into each company’s recent revenue figures - Canva is sitting at annualised recurring revenue of around US$1.7bn, Pay now has 12,500 SME customers and revenue is $80m on an annualised run rate basis, and Employment Hero’s FY23 revenue was more than $110m, with a loss of $36m.
AI life
Musk troll. Deepfake video scams making use of the latest AI continue to proliferate on the socials, particularly Facebook. And Elon Musk is the clone du jour, who features in several deepfake interviews seeking investment for a new investment platform, such as ‘Quantum AI.’
In response to emailed questions about the videos, Musk responded: “Ugh, I can’t believe you sent me Facebook links.”
Maybe this is just a covert way for Zucks to troll Musk?
F.ai.cebook. Scary thought for the day: move over metaverse,* Zuckerberg wants to be the first to build artificial general intelligence (AGI) and is paying megabucks to win the war for AI talent:
every company in the space [is] vying for an extremely small pool of researchers and engineers. Those with the needed expertise can command eye-popping compensation packages to the tune of over $1 million a year.
*well kinda, Meta is still spending US$15bn+ a year on Reality Labs and the metaverse.
Rolling out the platform playbook. OpenAI launched GPT Store, a marketplace enabling people to buy and sell customised chatbots, which it argues could one day be bigger than the App Store. OpenAI’s annualised revenue recently topped US$1.6bn - up from $1.3bn in mid-October. It has 260 customers for its ChatGPT Enterprise plan representing 150k+ seats. Clearly customers aren’t too worried about all that CEO drama in November.
Big News in Big Tech
Battle of the beasts. Microsoft passed Apple in market capitalisation - a testament to Microsoft’s edge in AI. Both are hovering towards US$3 trillion. Meanwhile Apple has overtaken Samsung as the world’s biggest phonemaker. And Samsung just released the Galaxy S24 with a suite of generative AI tools and an (unexpected) health-tracking Galaxy Ring, similar to the Oura.
Who stole the cookies from the cookie jar? Google is finally transitioning away from third-party cookies on Chrome, which accounts for 65% of internet traffic worldwide. This month it started by turning off cookies for 1% of Chrome users (approx 30 million people) as a test. Despite the plan being years in the making, The Wall Street Journal reports that advertisers still aren’t ready.
Meanwhile, Facebook rolled out a new “Link History” tool that saves all the links you click in the Facebook mobile app, and the data is used for targeted ads.
Red faced SEC. In 2013 the Winklevoss twins applied for a bitcoin exchange-traded fund (ETF) in the U.S. Finally, 10 years later, the SEC approved nine new spot bitcoin ETFs, which collectively drew nearly US$2 billion in first three days of trading. This is a huge victory for the crypto industry. Also, just a day before the official ETF approval, the SEC’s X account was hacked (it had no MFA!) releasing a fake approval announcement.
Adobe sans Figma. “Despite thousands of hours spent with regulators around the world” Adobe and Figma agreed to end their $20bn acquisition deal.
In other design news, InVision, which was once a leader in collaborative design valued at $2 billion, collapsed. Lots of lessons to be learned. Startups are hard.
TikTok made me buy it. TikTok is hiking its Shop commission from 2% to 8% (Shop enables users to purchase products without leaving the app). A Bloomberg report says TikTok is aiming to grow its U.S. e-commerce business 10x to US$17.5bn this year, which would give Amazon a run for its money.
What in the actual f?! After a couple were critical of eBay in a newsletter, some eBay employees decided to take it upon themselves to silence the duo with threats. eBay’s former senior director of Safety and Security(!!), and six other members of the company’s security team sent the couple a bloody pig mask, a fetal pig, live insects, a funeral wreath, and a book on surviving the death of a spouse. They also installed a GPS tracking device on their car and created ads on Craigslist inviting the public for sexy time at the victims’ home. This month eBay agreed to pay a $3 million fine, while the perpetrators serve time in prison and home confinement.
That’s a wrap! We hope you enjoyed it.
Bex, Gavin and the team at Ignition Lane
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