Wrap #96: Dancing Ducks
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The greatest minds in AI bring you: dancing ducks
Big flex. Lots going on at Google. On Wednesday it held its developer conference, Google I/O, where things got a bit weird. Somehow the conference featured a song about a bird with human lips who loved to play board games and drink oat milk. Then a human dressed as a hoodie-clad dancing bird appeared on stage.
Google clearly tried to use the conference to flex its AI muscles against OpenAI, Microsoft, etc, without scaring the world with its AI capability (perhaps this explains the lighthearted duck stage production?).
Google is putting generative AI into everything: gmail, Google Photos, Google Docs, text-to-image, a chatbot that codes, you name it.
Even search—traditionally an extremely lucrative product for Google—will merge with generative AI results. There is a lot for this product team to consider and we’re still yet to see how search ads + AI will work.
Google also launched un-hackable and un-phishable passkeys for Google accounts across all major platforms. Oh and there’s a new Pixel tablet, a low cost Pixel phone, and the Pixel Fold. It folds.
Meanwhile, people continue to pop out of the woodwork raising alarm bells about the use of AI at Google and elsewhere. The latest is Geoffrey Hinton, a pioneer in the field and formerly one of Google’s most respected researchers, who recently left the company to focus on new concerns he has about AI. And remember back to 2020 when Timnit Gebru—the co-lead of Google’s ethical AI team who highlighted the risks of large language models—and a few coworkers were ousted? Even Snoop Dogg is worried.
At Google I/O aka Google AI, CEO Sundar Pichai also mentioned that five different Google products have more than 2 billion users. Huge! And he’s getting paid the big bucks for all this hard work, taking home stock awards of US$218m last year.
Local Bloom & Gloom
Despite all of the attention-grabbing news headlines on redundancies, an ice cold VC market, the tech crunch and startup collapse (more on that below), there are plenty of ANZ startups plowing ahead with their world domination plans.
Yearning for corporate learning. Enterprise learning platform, Go1 acquired Blinkist, a Berlin startup that abbreviates non-fiction books. As a part of the deal, Insight Partners (Blinkist’s biggest investor) will take an additional US$30m in equity in Go1 at an “upround.” Go1 was last valued at US$2bn in June 2022. It reports having 8 million users, and customers including Delta Airlines, Hays and Westpac.
Data centre adventure. NextDC is raising $618m to fund its data centre expansion into NZ and Malaysia. It also updated FY23 guidance for data centre services revenue to $350-360m and EBITDA to $192-$196m.
Pushpay’s $1.6bn payday. Church donation and management software company Pushpay will complete its sale and delist from the ASX and NZX on Friday. A private equity consortium is taking over the business at a NZ$1.6bn valuation - a 15.4% premium at the time of the takeover offer in March. Pushpay debuted on the NZAX in 2014 (advised by none other than yours truly - Bex), valuing the then 43-person startup at $50m.
Surmounting accounting. mypropserity was acquired by HUB24 in an all stock deal valuing the business at $40m, plus $11.5m earn out. Not bad considering mypropserity’s forecast FY23 revenue is just $4m. myprosperity’s platform facilitates communication between advisers and their clients, enabling digital document signing, budgeting and goal setting.
Risk bisque. Fivecast is expanding to the UK and the US after raising $30m (Ten Eleven Ventures investment memo). Its technology can analyse vast amounts of data to identify potential national security, public safety, or corporate reputation threats before they become major issues.
Farewell. Closing its doors this month:
CyRise: NTT and Deakin University’s accelerator for cyber security. It seems a shame for CyRise to be shutting down as data breaches mount. CyRise will be missed - since 2017 it has invested in 39 startups that have gone on to raise $40m more, creating more than 150 jobs. CyRise had an overall return multiple of 3.55x and an IRR of 50%.
Providoor: a lockdown favourite for gourmet meal delivery.
Cheddar: CommBank’s cashback app startup, which launched in November 2021.
V2 foods’ $20m production plant in Wodonga, which only just opened in December 2020. The alt-meat producer recently launched in China (via 2,300 store supermarket chain Shanghai Lawson) and now says it makes more financial sense to “source more of our ingredients closer to the end markets.”
Budge it budget. A few good things for startups in the federal budget this week:
$393.4m to establish a new Industry Growth Program to help Australian startups and SMEs to “commercialise their ideas and grow their operations.” This acts an early-stage grants program to support companies who may later seek investment from the $15bn National Reconstruction Fund - i.e. those in climate tech, medtech, agritech, transportation and defence.
$101m for the “responsible development” of AI and quantum industries and the expansion of the National AI Centre.
A $5m extension of the Women in STEM Cadetships and Advanced Apprenticeships Program.
Improving visa processing times with $28m funding over two years to upgrade existing visa ICT systems. The temporary Skilled Migration Income Threshold (TSMIT) also increases from $53,900 to $70,000 on July 1.
Tractor Ventures funded its 100th company with revenue-based financing. An impressive milestone after only 2.5 years.
Blackbird shared its diversity investment stats. Progress, but the majority of founding teams pitching and receiving funding are all men:
Globally, as little as 13% of early stage venture funding goes to women-led or even women co-founded startups - and the figures are much worse for women of colour founders. In Australia, on average 19% of deals and 16% of all funding over the past 3 years went to women-founded or cofounded businesses. The headline is: it’s not good enough...
37% of the companies that pitched to the [Blackbird] Investment Committee had at least one woman on the founding team…
But that hasn’t fully translated into the same percentage of investments: 33% of the companies we invested in had a woman founder (several had only women founders).
Scale Investors has been acquired by current Co-CEOs Samar Mcheileh and Chelsea Newell, and Chief Investment Officer, Roo Harris. The trio bought Scale from its founders Susan Oliver, Carol Schwartz, Annette Kimmitt and Laura McKenzie for an undisclosed sum.
Main Sequence released a Venture Science toolkit for founders launching deep tech startups.
The AFR ripped AirTree for hosting its 35 person team and portfolio company founders for “a break” in lux Hayman Island this week. The AFR apparently caught wind of the extravaganza after someone left a copy of the agenda in a plane seat pocket. Oops. Not great timing immediately after MilkRun, the “tech slump”, the cost of living crisis, etc, etc. But to be fair, retreats like this can be hugely valuable for founders, it was probably locked in months ago and would be cheaper than a junket to San Francisco or Israel.
Around the world. SoftBank Vision Fund lost US$32bn in the financial year ending March. VCs layoffs are kicking off, including 20% cut at Y Combinator and 28% cut at fintech investor Anthemis Group. The Fed released a report concluding that the SVB collapse was“a textbook case of mismanagement by the bank… And Federal Reserve supervisors failed to take forceful enough action.” Heads will roll.
Bit Things Big Tech
Big val. OpenAI just raised another $300m from the who’s who of investors including Sequoia, A16Z and Tiger, at a $27-29bn valuation.
Big jobs. AI and machine learning topped the list of the fastest-growing jobs in The World Economic Forum’s 2023 Future of Jobs Report. No surprises there.
Big snooze. PwC announced a $1bn three year partnership with Microsoft to sell Chat-GPT-based products (on Azure) to its IT consulting clients. Analyst Benedict Evans:
This is how a lot of this technology will actually get deployed - boring automation of boring processes in the boring back-offices of big companies, by boring but important companies like PwC, Accenture and IBM. And it will take a decade or two.
Big collab. To fight stalking, Apple and Google have partnered on a standard so that any iPhone or Android phone will tell you if a bluetooth tracker (like a Tile or Apple AirTag) is moving around with you, e.g. if it’s been hidden in your car or bag.
Big job. Elon Musk has found a new CEO for X/Twitter - Linda Yaccarino, NBC Universal's chairman of Global Advertising and Partnerships. Tesla shares jumped following the news.
Big block. The UK’s CMA competition authority has blocked Microsoft’s $69bn acquisition of Activision.
Return of the mac. Steve Jobs introduced the world to the iMac 25 years ago, saving Apple in the process.
That’s a wrap! We hope you enjoyed it.
Bex, Gavin and the team at Ignition Lane
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