G’day, and welcome to this week’s edition of Overnight Success! Your weekly download on all the important things that happened in the Aussie startup ecosystem. 🚀 

Drum roll, please 🥁 …

We have an exciting announcement for anyone who’s been thinking about grabbing a ticket to Blackbird’s Sunrise (May 1-2). Scroll down to the Notice Board to find out what it is! 👇️ 

Fresh off the OS press

This week we released the second edition of our sidecar monthly newsletter, Pulse Check 💓; powered by our team of expert correspondents who each report on the latest trends and insights shaping their corner of the Aussie startup ecosystem. Check it out here!

In the mood for a ‘lil learning? Have a read of this review of FuzzyHQ’s negotiation course from our very own Will Richards who recently took part in the program. Watch out, world - this guy is ready to haggle, debate and mediate ‘till the cows come home! 🐄 🤣 

🔥 If your version of the newsletter gets cut short, never fear, you can read the full version without interruption here.

👀 Headlines 👀 

📈 Cut Through Ventures releases their 2024 Cut Through Quarterly report

• Here's the TL;DR:

  • The drought in startup funding continues. The total raised this quarter is $703.1 million across 66 deals, a 45% drop from the total raised in the final quarter of last year, yet slightly higher than the $650.2 million raised in the same period last year.

  • Female-founded teams have received an all-time high in funding share and absolute dollars received in a quarter, claiming 21% of the Q1 capital raised. This is in part made up of rounds closed by Aravax, Prota Therapeutics, Ultra Violette and Solbari.

  • There is also consensus that the Australian startup space is lacking investors who are willing to put their hands up to lead rounds.

🤝 The Federal Government has proposed changes to Australia's merger laws

• The proposed changes will require acquisitions above a certain monetary and market share threshold to be reported to the Australian Competition and Consumer Commission (ACCC), before they’re finalised.

  • The aim is for an initial review to be completed within 15-30 days, and investigations into certain large or more complex deals will take another 90 days to determine whether they may lessen competition or entrench market power.

• The startup sector has expressed concerns that these changes may stifle the flow of the ecosystem by preventing exits, blocking and slowing down deal momentum, and preventing the circulation of returns from going back into the sector. Former competition regulator Rod Sims holds little sympathy for such arguments.

• It is important to stress that many details are still being finalised, and the baseline threshold has yet to be determined.

  • While we remain optimistic that the changes may only impact the bigger end of town rather than small tech acquisitions, Tom Smalley from Skalata Ventures is of the opposite sentiment, stating that the changes would weigh greater on smaller bolt-on acquisitions M&A for exits.

💰 Canva has completed a $2.43 billion share sale, making some early backers, staff and Sydney real estate agents very happy (aka rich).

• The share sale values the company at over AUD $39 billion and marks the round as one of the largest ‘secondary events' across the global startup world to date.

• The nature of the sale is the first of its kind, with its Employee Stock Ownership Plan (ESOP) enabling the company's initial employees to share in its success. ESOP is the mechanism where employees are also remunerated with equity in the business they work for.

🍃 Albanese unveils green interventionist industry policy to boost Australian economy

• The policy, inspired by the US Inflation Reduction Act, which contains half a billion dollars in green energy incentives, aims to provide direct government support to Australian businesses to accelerate the energy transition, boost innovation, and enhance Australia's competitiveness on the global stage.

• Underpinning the work of the new Net Zero Authority and its investment in renewable and sustainable energy projects, the announcement of the new policy and its associated incentives should be good news for budding startups in the ClimateTech, NatureTech and renewables space, amongst others.

⚡️Startup Retro⚡️

Honey Insurance lands monster $108M Series A for smart home insurance

Founders: Richard Joffe

Honey Insurance, a smart home insurer, has secured a staggering $108 million in Series A funding and has chosen to concentrate its operations within Australia. The investment was led by US-based Gallatin Point Capital, which marked their first investment in Australia. Shhh, no one tell them our Series A rounds aren't usually this large! 🤫 

Honey aims to revolutionise the domestic insurance market by integrating artificial intelligence, satellite imagery, and smart home technology into its products. This approach enhances policy purchasing and claims processing and introduces a more personalised insurance experience, promising fairer pricing and policies tailored to homeowners' individual needs.

A Honey policy comes with three smart sensors that track and alert you to three things: water damage, fire, and theft. The sensors look like white hockey pucks and connect to your Wi-Fi system. They then speak to your phone via a smartphone app. Those who use the sensors receive a discount on their premium.

Founder and CEO Richard Joffe emphasises Honey's commitment to being an insurance company first, prioritising regulatory compliance and customer trust over rapid technological disruption. Honey's mission to dominate the Australian home insurance market is underscored by its goal to insure one in every ten Australian homes.

Fun Fact: Honey has a very visible employee whistleblower policy that is available for public viewing.

Due Diligence: Startup Daily, Smart Company

Alta Group goes public on NYSE with A$9.9M raised at a US$45 million pre-money valuation with technology package for combat sports gyms

Founders: Nick Langton

Alta Group Global, previously known as Wimp 2 Warrior, has debuted on the New York Stock Exchange (NYSE) under the ticker symbol MMA, marking a significant milestone for the company specialising in a mixed martial arts (MMA) training app. The platform enables gyms to offer a variety of MMA and combat sports training programs.

Despite prior concerns about its viability, the company raised $US6.5 million ($9.9 million) through an initial public offering priced at US$5 per share, subsequently valuing the company at US$40.45 million.

Founded in 2013 by Nick Langton, Alta Group attracted early investment from notable figures and secured $7.5 million in 2021 from investors including News Corp’s Scaleup Media Fund and Mark Bouris. It also raised $800,000 from 90 individuals via the Birchal equity crowdfunding platform in 2019, indicating robust investor confidence over time.

The business is now debt-free and aiming to capitalise on the US market by targeting over 45,000 martial arts and combat sports gyms. For context, MMA has 640M fans worldwide, with 11 million participating in those US-based gyms alone.

Fun fact: In September 2023, Alta acquired the Australian fitness app Steppen. Steppen focused on Gen Z with their video fitness platform that aggregating fitness content creators. Read about the acquisition and company background in this OS-exclusive article.

Due Diligence: Alta Blog, AFR

Mindverse lands $5M Seed to combine AI intelligences via Artificial Diversified Intelligence (ADI)

Founders: Dr Felix Tao & Kisson Lin

Singapore-based AI startup Mindverse has successfully secured a US$5M Seed investment led by Square Peg. Mindverse is steering away from the conventional path of universal models towards developing Artificial Diversified Intelligence (ADI), aiming to preserve human individuality within AI advancements. Co-founders Dr Felix Tao and Kisson Lin are both veterans of tech firms and the AI space and have worked at Meta and ByteDance. Felix helped develop Facebook's content recommendation algorithm, and Kisson helped establish the ad strategy for TikTok.

Central to Mindverse's vision is the development of personalised models that empower individualised AI with long-term memory and complex reasoning abilities. This has resulted in the development of Mebot for individuals and MindOS Studio for businesses, offering personalised AI experiences. Mebot serves as a digital "second brain," enhancing productivity by adapting to user habits and preferences, while MindOS Studio allows businesses to create AI-native websites with dynamic, personalised chat experiences crucial for sectors like e-commerce, real estate, and travel.

This funding round will bolster Mindverse's growth by expanding its research and product development teams. MindOS has already established itself in the market with 30,000 users.

Due Diligence: Square Peg Investment Notes

Want to learn more about why we’re reporting these figures? Read about the ‘Funding the Balance’ initiative here.

🎉 New Fund, Who’s This? 🎉 

💰 Woolworths partners with UK-based Tesco, Canadian retail group Empire Company, South Africa’s Shoprite Group and EU homed Ahold Delhaize to launch a new fund, W23 Global.

• This fund aims to invest strategically in startups related to supply chains and sustainability, leveraging the retailers' expertise.

• Unlike some corporate venture funds, W23 Global emphasizss that its portfolio companies will have the freedom to work with any customers.

• The five grocery groups are LPs in the new global fund, which will be headquartered in the current W23 office in Sydney. Each LP’s CEO will be on the investment committee of the new global fund.

💰️M&A 🤝 

 🥤 Sydney-based reusable cup company, Huskee, has been acquired by sustainable packaging company BioPak for an undisclosed sale price, as the two join forces to make reuse mainstream in the food and beverage industry.

• Huskee will remain a standalone company, with the acquisition allowing them to leverage BioPak's resources, such as logistics and warehousing as well as scaling capacity, to aid plans to expand into international markets.

• Founded in 2017, Huskee has sold 5 million cups by repurposing coffee husks to create its reusable cups.

👩‍🎓 Sydney-based Forage, who offer free virtual work experience programs from top companies, has been acquired by US-based education group EAB.

• While the details of the acquisition are not yet public, Forage’s growth since its launch in 2017 has been strong. Forage received Seed funding while participating in Y Combinator and the UNSW Founders 10x program. The Series A was US$9.3 million, which included Lightspeed Venture Partners and FundersClub. The Series B followed in 2021, with Blackbird, Telstra Ventures, Citi Venture and others tipping in $35 million.

🤝 StartSomeGood, the innovation agency for social impact projects, has been acquired by General Good.

• General Good is owned by Piers Grove, the founder of the EnergyLab and Boomerang Labs | Australia accelerators. Read more here.

🤑 Accelerator Watch 🤑 

💊 2024 LuminaX HealthTech Accelerator Cohort announced!

Here is the full list for your watch lists…! 👀 

• 3P Healthcare provides a cost-effective, non-invasive cardiovascular risk assessment tool focusing on root causes rather than symptoms.

• BeTuned merges psychological therapies with gaming to make mental health care engaging and accessible.

• BioSpine, a Griffith University-led research project, is developing digital rehab tech for spinal cord injury recovery, enhancing movement and sensation.

• Dala Health, a platform designed to foster wellbeing, featuring a personal wellbeing coach in everyone’s pocket.

• Umami, a nutrition planning and client management platform for health professionals.

• IPCIUM promotes healthier, longer lives for those living with chronic disease through a service that encourages positive health behaviours. Currently in clinical trials.

• Neo eX integrates, gamifies and analyses consumer wearables data through a common platform, enhancing user engagement.

• Bloody Good Test provides an innovative blood testing service, aiming to improve preventative healthcare access and trust.

• STAT leverages medical advertising to create a new funding source for healthcare, combining purpose with technology.

• Harmonic offers insights into team culture, focusing on work styles and employee wellbeing to improve the workplace environment.

• Chatstat uses AI to monitor and analyse social media, safeguarding youth mental health through proactive engagement.

🎉 Wins 🎉 

🤖 Andromeda almost reaches breakeven.

• Robotics and AI startup Andromeda is less than 4 Abi robots away from breaking even - an impressive, critical milestone for the hardware startup. Abi is Andromeda’s flagship robot as they seek to create companion robots for humans. Check out the technology here.

🚀 Startup Fleet Space Technologies successfully launches Centauri-6 satellite on SpaceX mission.

• The Adelaide-based space startup hopes to accelerate mineral exploration efforts in space, providing space-enabled solutions to net-zero goals and a clean energy future.

• The launch took off from Kennedy Space Center Launch Complex 39A in Florida, which is only an hour's drive from Melbourne! 😉 

💻 Leonardo Ai has launched its enterprise product, Leonardo for Teams

• The Sydney-based company, which focuses on hyper-realistic image generation for video games, is harnessing this latest tool to expand into other industries, including film and entertainment, marketing and creative services, architecture and interior design.

• The new product aims to streamline creative collaboration and bring scale and efficiency to the creative process. Features include a collaborative feed and private sharing of fine-tuned models.

🌯 Guzman y Gomez hits $1.7B valuation, up slightly from $1.6B in 2022

• Cooper Investors, Hyperion Asset Management, Firetrail Investments and QVG Capital join the likes of TDM Partners and Athletic Ventures in backing the Mexican fast food chain.

📌 Notice Board 📌 

🎤 Pitch Opps | 🚀 Accelerator/ Program |💰 Competition/Grant | 📅 Event

📆 💰️ Want to score a FREE ticket to Sunrise? 🌄 📍Sydney 

• Overnight Success has partnered with the team at Blackbird to offer our community the opportunity to get a FREE ticket (worth $355!) to this year’s Sunrise startup festival - May 1-2 2024 at Carriageworks in Sydney 🎫 🎉.

• We’ve got two tix to give away. Want to throw your hat in the ring? Enter here. Winners will be announced next in Saturday’s newsletter! 👀

📅 ThincLab has launched a new short course on angel investing, ThincAngel 📍Adelaide

• Adelaide University-supported business incubator ThincLab has opened enrolments for a 2-day short course on the start-to-finish process of Angel investing. It’s starting SOON, running this Thursday, April 18 - Friday, April 19. Book your place here!

🚀 Press Play Ventures’ Accelerator Program 📍Melbourne

• Applications are currently open for Press Play Ventures’ second cohort. Calling on all aspiring female founders to apply to be a part of their Victoria-based, 12-week program and access a $50,000 Alumni Cash Pool. Scholarships available!

• Applications close on Thursday, May 2, 2024. Apply here!

🧠 KaaS (Knowledge as a Service)

1. Stock-Based Compensation for Fast Growing Technology Businesses - The Headache Caused by Lower Stock Prices by Ben Gisz from TDM Growth Partners

• The article was written in 2022, when tech values were pretty low, and makes some interesting points about short-term incentives. The best content is further down in the article, where Ben explains how TDM approaches equity incentives for their portfolio companies.

2. Sachin Shah is daily tweeting his founding journey of a new media company.

Have we missed something? Got some feedback? We love emails, so send one over!

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‘Til next time,

👋 Will, Gemma & Kate