G'day and welcome to Overnight Success, your weekly wrap on all things Aussie startups! 🇦🇺 An especially warm welcome to the newest 51 subscribers who join us this week.

This week the OS team was at SXSW Sydney and it was fantastic to meet so many of our subscribers in the flesh! Gemma also moderated a spicy 🌶️ panel with Kirstin Hunter (Techstars), Alex Khor (Afterwork) and Chris Gillings (Five V Capital/ Cut Through Venture). Kirstin wrote up a fantastic op-ed in Smart Company that highlights the most controversial (and arguably most important) of the myths we discussed.

Housekeeping: Does your OS newsletter get cut off by Gmail’s pesky mobile app? You can read the full version without interruption here.

Headlines

👥 Employment Hero secures 2023’s largest capital raise

• The company has bagged $263M (US$167M) from US Investors in the same week as space tech company, Skykraft announced it’s snagged $120M, suggesting big capital could be back.

🇦🇺 SXSW touches down with mixed reviews, but the NSW Government is locking in another four years.

• 🥛 Glass half empty: App issues, way-finding problems with a dash of long lines, and missed sessions left attendees feeling slightly disappointed for forking out $1200+ a badge. Check our Capital Brief’s review here.

• 🍷 Glass half full: The SXSW attracted crowds from across Australia to participate in panels, discussions and after-hours events with an incalculable number of positive interactions for the ecosystem taking place. Measuring the value of events like this that connect people is hard and we’re glad SXSW is returning to Sydney.

PLUS 7 raise announcements, 5 startup wins, and a wrap on Startmate’s biggest-ever Demo Day. Read on! 👇️ 

⚡️Startup Retro⚡️

HR

Employment Hero sets 2023 funding record with $263M Series F at ~$2B valuation

In a standout Series F round, US investors have funnelled $263 million into Employment Hero, marking the largest funding of the year for a private local software firm. Employment Hero has just tipped over the 10-year-old mark and is just shy of a $2 billion valuation. This raise comes at a significant leap from its $1.25 billion valuation in the prior year’s round.

This round was led by a new investor, TCV (Technology Crossover Ventures), with participation from Insight Partners, AirTree Ventures, Seek Investments and OneVentures. TCV has previously backed giants like Spotify, Airbnb, ByteDance, LinkedIn and Facebook.

Employment Hero's platform assists organisations in managing employees through its HR software which handles payroll, governance, onboarding and turnover management. Recently, EH launched a "super app" called Swag to disrupt the online recruitment sector.

This latest funding round will be used for some aggressive UK expansion, targeting the crowded market to bolster its presence over the next 12 months. This capital provides years of runway, with Employment Hero stating it has minimal desire to go public anytime soon.

Due Diligence: TCV Investment Notes, AFR, TechCrunch

SpaceTech

Skykraft snags $120M to improve Air Traffic communication with a constellation of low-earth orbit satellites

Canberra-based Skykraft has secured $120 million for its aviation satellite technology. The funds will help will help the team deploy a constellation of low-earth orbit satellites. These satellites are aimed at enhancing communication between air traffic control and aircraft over remote regions where traditional radio doesn't cut the mustard.

The latest funding round was backed by notable investors, including Main Sequence Ventures, Foresight Australia, and OPTrust, one of Canada's largest pension funds.

Although Skykraft is a technology business, CEO Michael Frater emphasised it should be valued as a transport infrastructure investment. The firm caters to clients with high credit ratings and is focused on long-term contracts, akin to traditional infrastructure located in space.

Skykraft plans to construct a global air traffic management service offering real-time communications for more efficient and safer flight paths. The system could also prove invaluable in emergencies, such as the disappearance of MH370. The crucial nature of the company’s tech was put on show just this week as details emerged about a near collision between Australian and Chinese satellites, which the Skykraft team was called in to assist with.

This raise follows a $3.5 million round from investors like former Macquarie Group boss Allan Moss and Lennoxgrove Capital.

Due Diligence: Skykraft Announcement, AFR

Fraud / Digital Security

Darwinium lands $28M Series A to protect against fraud online

Darwinium, an NSW-based digital security and fraud prevention startup, has raised a $28.2 million Series A round led by US Venture Partners (USVP). Participating investors include Blackbird, Airtree Ventures, and Accomplice. This round follows a $10M USD Seed round in November 2022.

The company will tackle the increasing complexity of online fraud exacerbated by advanced AI tools scammers use. Darwinium's unique approach focuses on two core innovations: shifting fraud detection to the network's edge and pioneering a SaaS model for data protection. This allows for a holistic view of customer behaviour and real-time risk assessment.

Darwinium integrates with networks like Cloudflare and AWS CloudFront and supports integrations with other third-party services. Darwinium also encrypts and anonymises customer data to keep it compliant with privacy legislation like the California Consumer Privacy Act (CCPA) and the EU's General Data Protection Regulation (GDPR).

The Series A funding will allow Darwinium to expand globally, targeting industries such as fintech, eCommerce, and gaming.

Due Diligence: TechCrunch

Health Care

Sahha secures $1.75M Seed round to provide insights on mental health via wearables

Sahha, a Sydney-based mental health tech backend API, has secured a $1.75 million Seed funding round. Sahha uses biosensors on wearable devices like smartphones and smartwatches to gauge indicators of mental health conditions such as depression and anxiety.

Sahha's platform plugs into the backend of various applications, delivering insights based on user behaviour and device sensor data. It correlates this information with a pre-existing dataset obtained from psychometric testing of thousands of global participants.

Founder Aleksander Dahlberg stated that the goal was to train machine learning models to find correlations between user behaviour and mental health conditions. The data is converted into a commercial API, which can be integrated into other platforms. Metrics like sleep regularity and phone usage throughout the night are assessed to provide insights into an individual's mood.

Due Diligence: The Australian

Renewables / FinTech

Orkestra lands $2M Seed round to estimate return on renewable energy projects

Orkestra, a renewable energy-focused platform that calculates a range of ROI analytics, has secured a $2 million Seed. This follows its $1.1 million pre-Seed funding round less than a year ago, after fast growth and adoption of the tech. The round was led by Tidal Ventures and backed by Rampersand, Impact Ventures, Luxem and various angels.

Orkestra uses a few algorithms to view project costs and potential returns comprehensively. The platform considers variables like types and sizes of solar panels, different battery configurations, energy tariffs, and virtual power plant participation.

Orkestra has modelled roughly 3,000 projects in its three-year lifespan, with 2,500 analysed in the past nine months alone. The 18-employee firm aims to use the fresh funds to enter the European market and attract local energy providers as clients.

Due Diligence: The Australian

EdTech

IDEAcademy raises $1.3M to offer an alternative education track to high school students

IDEAcademy, a Western Australian edtech is the latest to receive funding from Purpose Ventures, a WA-focused fund. The female-founded company received $1.3 million to continue the build-out of programs that foster entrepreneurial and creative skills in year 11 and year 12 students.

Within two years, IDEA has educated over 100 students and expanded its team to 13 with its recent online platform launch. The fresh capital will fuel the program's expansion into new Australian locations, starting with the Peel region in WA.

IDEA distinguishes itself from traditional education by positioning itself as a leader in preparing students for the future of work. The basis of the IDEAcademy education is to create an individualised approach to education that relies on finding students' personal passions.

Due Diligence: Startup Daily

Startmate Demo Day Recap

Over 1000 people attended Startmate Demo Night to see 14 startups pitch following their stint in the Accelerator program. Most of the following are raising ~ if you want an intro, let us know!

🚀 Astrix Astronautics Inflatable satellite solar arrays providing renewable energy.

🧠 AsyncBrain Enabling teams to make better decisions with fewer meetings.

👶🏽 BioticsAI Using AI to detect foetal abnormalities in ultrasounds.

📝 DDLoop Legal data analysis platform to reduce pain of legal due diligence process, including searching on government databases.

🏙️ Defy-Hi Capturing, analysing and visualising data from high-rise buildings to ensure a more efficient & data-driven approach to facade inspections.

🧑🏾‍💻 Empathix AI-powered recruitment platform that cuts down the hiring process from four weeks to one.

👩🏿‍🏫 Flohh Solving teacher workload by making marking 40% quicker.

📺 LUMOS Marketing insights to empower media buyers & suppliers with target market smarts.

🩺 Lyrebird Health AI transcribing tool enabling doctors to focus on medicine not paperwork.

😷 Misti Wearable nebuliser designed for children to deliver life-saving biomolecules, enabling quick and effective response to infectious respiratory diseases.

🚛 Nomadfleet A platform streamlining construction fleet management.

☔️🥢 Rainstick Growing plants faster by harnessing traditional indigenous knowledge and lightening.

🔥 Ubiquetherm Cutting edge nanotechnology to deliver ultra-low cost heating and cooling solutions to homes, businesses and industries.

🍃Alt.Leather Australia's first 100% bio-based leather alternative. Turning waste streams and plants into next-gen materials.

New Fund, Who’s This?

Queensland is set to launch a $5 million Olympics Challenge in a bid to showcase "quantum technologies" from the state during the Brisbane 2032 Olympic and Paralympic Games.

Wins

⚡ JetCharge launches $24.9M ‘Charging as a Service Project’ with the Australian Government via ARENA, providing $12M in matched grant funding.

👗 Rntr, the rental and resale plug-in for brands, goes live on Oroton. (LinkedIn)

• The goal is to maximise garment utilisation and reduce garments in landfills. Rent some Oroton gear here.

📡 Silentium Defence, a Defence department spinout based in Adelaide that delivers passive radars commercially via its Maverick M8 system, has made its first sale in the US. (Innovation Aus)

• The M8 can fit inside a backpack and detect and track un-crewed aircraft and missiles.

• The sale marks a potential inflection point in the Australian defence export industry.

🧑‍🚀 Startmate launched a syndicate on Aussie Angels so wholesale investors can now invest with the accelerator. LinkedIn announcement here.

🤖 NanoCube won the SXSW Sydney Pitch Grand Final, scoring a spot to pitch at next year’s conference in Austin.

• Founder Lisa Milani impressed the judging panel with the company’s medical technology that uses nanobots to detect and treat cancers and potentially other illnesses such as cardiovascular disease and lung infections.

📆 Overnight Success now co-hosts the Aussie & NZ Startup Events calendar, created by Startmate and supported by The Community Collective.

Accredited Tweeters

KaaS (Knowledge as a Service)

Gemma’s Pick 💁‍♀️ Crucible Moments from Sequoia Capital

• Sequoia Capital launched this podcast series around a month ago and has so far featured founders and key people from PayPal, AirBnB, Block, Eventbrite and Hubspot.

Will’s Pick 💁‍♂️ The Fundraising Blueprint by Abhishek Maran

• A clean and easy-to-read blog post on how to structure and map out a capital raise. I think it’s a living document that will be added to over time ~ one to bookmark and share with founders when required.

   

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‘Til next time,

👋 Will & Gem