G'day and welcome to Overnight Success! 👋 

We can’t offer you any Black Friday and Cyber Weekend sales (mainly because we already send you the newsletter for free), but we can tell you that a bunch of money flowed to startups this week. Did VCs get sucked into a deal frenzy this week, or is our startup ecosystem emerging from the depths? 👀 

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Headlines

🔐 The Federal Government has released its 7-year Cyber Security Strategy (Startup Daily)

• The strategy focuses on how the government aims to better protect themselves, individuals and businesses from cyber criminals, signalling its intention to tighten the nation’s prevention and response efforts to cyber security threats such as the Optus and Medibank incidents.

• The key takeaways for startups: the government plans to invest $586.9 million into this strategy, no doubt requiring significant support from cyber security experts and innovators, presenting an opportunity for anyone in this space. On the flip side, they’re also looking to raise the bar on and increase transparency around tech security standards, such as for smart IOT and AI-enabled devices, so it will pay to make this a major consideration of any new product build.

🪃 Sam goes back to OpenAI, but the Aussie board member gets the boot (Crikey & The Guardian)

• In all the OpenAI craziness that happened in the last week, you could have easily missed the small detail that one of the (now ousted) board members who originally fired Sam Altman as CEO of OpenAI is actually an Australian.

• Helen Toner attended Melbourne Girls Grammar and the University of Melbourne before getting involved in the effective altruism movement, which is keenly interested in AI safety.

🤑 PLUS a MASSIVE 11 raise announcements - probably one of our biggest Startup Retro’s ever, and a bunch of wins to give you the warm fuzzies to round out the week👇🏻

⚡️Startup Retro⚡️

Songtradr sounds off with $109M Series E raise at a $879M valuation to grow all-in-one music licensing platform

Founder: Paul Wiltshire

Songtradr, a music licensing platform founded by Australian songwriter and entrepreneur Paul Wiltshire, has significantly boosted its valuation to $879 million following a substantial $109 million Series E fundraise. The round included Epic Games, WiseTech Global founder Richard White, and institutional investors Perennial and Argo. The raising process took a gruelling 18 months.

Designed as a B2B alternative to platforms like Spotify, Songtradr caters to many clients, from corporates to small businesses and individual content creators. It offers an extensive selection of music for various applications, such as advertisements, TikToks, and Twitch streams. Songtradr operates as a marketplace and allows artists who contribute to Songtradr's catalogue to earn fees every time their music is licensed. The platform now has over 700,000 artists, 350,000 licensed tracks and 5 million original tracks available.

The raise also follows a series of acquisitions. Those of note include Tunefind (a music database for TV, film, and video games), MassiveMusic (the sonic creative agency that works with Nike, Heineken & Apple), and Musicube (AI music search tool).

In August 2021, Songtradr suggested it would attempt an IPO in 2022 at ~$750M but had to change its plans due to changing market conditions.

Due Diligence: AFR

Earlywork raises $1.5M Seed fund to catapult new school for the tech industry

Founders: Marina Wu, Dan Brockwell, Jono Herman

Earlywork, the community of 6000+ Australians interested in a career in tech, has landed $1.5 million of fresh capital to build out their tech sales academy. Sydney-based No Brand led the round with support from Jelix Ventures, Archangel Ventures, Ultraviolet Ventures, Dave Shein, Jay Simons, Paul Robson, Dave O'Mahony, Sam Rahmanian, Dave Shepherd and Albert Patajo.

Earlywork has evolved since its inception, initially beginning life as a newsletter in 2021, it has now transformed into a vibrant community and a three-week cohort program that takes 30 to 40 people and guarantees a job. The cohorts are focused on filling the critical talent gap in sales and customer success roles. The programs have now produced 100 graduations and are expanding to additional roles soon. This trend reflects a broader shift from traditional degrees to micro-courses and industry-relevant training.

The raise follows a slew of articles around recent tech layoffs. Despite this, Australia's tech sector adds thousands of jobs quarterly, which are often highly paid. For example, Their average cohort members see an average of 45% salary uplift, securing a $96k average total package.

Dan Brockwell, the co-founder of Earlywork, produced a great write-up of the raise process and talks to the strategy of the raise and business moving forward.

Due Diligence: The Age

Extra reading: Check out a deep dive we did with Earlywork after they secured their first funding round: How the community-led business, Earlywork, raised $700,000 and why audience matters.

Elliephant lands $560K in pre-Seed funding to revolutionise the corporate gifting industry

Founders: Sheree Andersen and Johnny Reid

Elliephant, a corporate gifting startup co-founded by Sheree Andersen and Johnny Reid, has raised $560,000 in pre-Seed funding, supported by LaunchVic's Alice Anderson Fund. Having launched a year ago, Elliephant aims to innovate the corporate gifting industry, which is currently plagued by inefficiencies and waste — an estimated 40% of corporate gifts end up in landfills.

Elliephant's platform integrates with existing HR, marketing, and sales tech stacks to create automated, personalised gifting campaigns. This approach ensures gifts resonate both personally and professionally, addressing the issue of unwanted corporate gifts. The platform has already secured notable clients like SEEK, Quantium, APA, and IXOM and was part of the 2023 Melbourne Accelerator Program at the University of Melbourne.

The newly acquired funds will fuel Elliephant's expansion in the APAC region, beginning with an expansion into Singapore, and support the introduction of AI into its platform.

Due Diligence: Startup Daily

Seminal secures $5M Seed round to develop licensing for artworks

Founders: Ward Williams

Seminal, an innovative tech platform designed to transform the world of fine arts through protection, licensing, and sale of artworks, has secured a notable $5 million in Seed funding. The startup, established by Ward Williams, son of prominent Melbourne dealmaker David Williams, is making waves in the art world with its unique approach to artist royalties.

Seminal aims to provide similar financial benefits to painters and other fine artists by adopting the royalty model prevalent in the music industry. The platform’s mission is to ensure artists receive ongoing compensation for their creations, a concept traditionally limited to musicians and songwriters.

The team has already grown to 52 and leverages AI to screen and validate the originality of artworks. This AI-driven approach segments images to detect and prevent unauthorised use of existing art, thereby safeguarding artists' copyrights.

Due Diligence: The Australian

Touch2Pay lands a $3.2M pre-Series A2 to revolutionise the Australian payment scene

Founders: Stanley Hancock, Alyson Joyce, JM Parc and Rob Cromb

Brisbane-based Touch2Pay has secured $3.2 million in its pre-Series A2 funding round, bringing its total raised capital to $6.3 million. Co-founded in 2020 by Stanley Hancock, Alyson Joyce, JM Parc, and Rob Cromb, the company has gained solid traction as a key player in payments-as-a-service.

Touch2Pay aims to revolutionise the Australian payment scene by specialising in contactless payment solutions. It has developed terminal solutions and softPOS technology, which support both Android and iOS platforms. The system offers a full suite of credit and debit card processing solutions and business merchant services.

The new funds are earmarked for product development, market expansion, and enhancing customer support. Touch2Pay has a bank-agnostic approach that prioritises customisation and user experience. According to the Reserve bank of Australia, Contactless card payments are used near universally by Australian consumers, making up 95 per cent of in-person card transactions in 2022.

Due Diligence: CRN Australia

Intrigue Media lands $2.7M to grow international global news media empire

Founders: John Fowler & Helen Zhang

Intrigue Media, a media startup co-founded by former Australian diplomats John Fowler and Helen Zhang, has successfully raised $2.7 million. Autumn Road Capital led the round. This investment boosts the company's valuation to an impressive $5.5 million.

Established in 2022, Intrigue Media was born to create a platform that informs global leaders and interested citizens about key international events and their implications. The media group now operates from Washington DC, London, Sydney and Austin.

At the heart of Intrigue Media's offerings is its daily newsletter (with 70,000+ readers!) International Intrigue, which is designed to distill complex global news into digestible, five-minute reads. The Intrigue Outload podcast and a Spanish-language newsletter, Intriga Internacional, complement this, broadening its reach and accessibility to a diverse audience.

As stated by the founders, this funding milestone is set to "turbocharge" Intrigue Media's expansion into new territories and services.

Due Diligence: Smart Company

Referral Code: We're genuine fans of Intrigue Media and its content. If you're interested, sign up using our referral link here!

Avarni lands $2.5M round to mobilise supply chains to lower greenhouse gas emissions

Founders: Anuj Paudel & Misha Cajic

Main Sequence Ventures has lead a $2.5 million funding round for carbon accounting software platform Avarni, with additional support from Brisbane's Sprint Ventures and Afterwork Ventures. This marks Avarni's third fundraising event since its 2021 inception and follows a $3 million round in December last year.

Co-founded by a former KPMG Australia management consultant and an ex-Atlassian product manager, Avarni leverages AI to assist companies in measuring and reducing their carbon emissions across Scope 1, 2, and 3 categories. These scopes cover direct and indirect emissions, including those from suppliers and supply chains. This is a crucial area of focus for the startup as mandatory climate reporting is set to come into place from mid-2024, requiring large businesses and financial institutions to report their emissions and reduction strategies, in turn placing pressure on smaller players within their supply chains to do the same (even if not directly required by legislation).

Avarni differentiates itself in the climate tech SaaS domain by emphasising supplier mobilisation in addition to automated emissions data management. This approach not only measures emissions but actively involves suppliers in reduction strategies, potentially impacting 65% to 95% of a company's total carbon footprint. Avarni's method creates a more effective ripple effect in sustainability efforts, moving beyond mere measurement to actual emissions reduction.

Due Diligence: Startup Daily, Overnight Success Deep Dive by Lea 

Aerologix secures $2M raise for commercial drone marketplace & acquisitions

Founders: Rakesh Routhu & Tom Caska

Sydney-based Aerologix, specialising in drone technology, has accelerated its global expansion by acquiring Brazilian mapping software company Mappa, following a successful $2 million capital raise. Founded in 2019, Aerologix connects drone operators with clients for aerial imaging, boasting a network of over 29,000 pilots.

This strategic move, backed by investors including Lindsay Phillips' Nightingale Partners and Ellerston Capital, positions Aerologix to create a comprehensive global drone ecosystem. Integrating Mappa's high-resolution mapping technology into Aerologix's offerings, including the newly launched AerologixMaps, will allow Aerologix to enter new industries. Additionally, the acquisition strengthens Aerologix's presence in South America and facilitates the development of a Software as a Service (SaaS) model, creating new revenue streams and offering a strategic edge over competitors.

Aerologix's technology is now compatible with 135 drone types and is part of the Civil Aviation Safety Authority's digital sky platform.

Due Diligence: CRN Australia, Business News Australia

SuperAPI secures a $1M Seed round to develop better technology for the superannuation industry

Founders: Riley James, Ben Styles, and Sam Richardson

SuperAPI, a startup co-founded by three former Xero employees has successfully raised a $1 million Seed round. Launched in 2022, SuperAPI focuses on developing technology solutions for the superannuation industry.

The company's core offering includes products that streamline the onboarding of superannuation members through major HR and payroll platforms. Additionally, SuperAPI operates the SuperChoiceForm.com.au and Xonboard, platforms that enhance the efficiency of super fund management.

SuperAPI aims to disrupt the industry's reliance on outdated methods like paper forms and manual data entry for onboarding and managing members. SuperAPI's technology will bridge this gap, facilitating better connectivity and engagement between employers, super funds and their members.

The funding round saw participation from notable investors, including Rory Wainer, founder of superannuation tech provider Oban Solutions, and James McKenzie from sustainability consultancy 12 Butterflies.

Due Diligence: AFR

New Funds, Who’s This?

🧑‍🤝‍🧑 Social enterprise incubator White Box Enterprises has secured $12 million from impact investors to develop startups focused on supporting disadvantaged people in regional communities. Within four years, WBE has helped create more than 400 jobs and incubated four social enterprises.

Wins

MAP 2023 Summer Accelerator Cohort announced!

• 19 startups and their 28 founders will join the next Melbourne Accelerator Program - read about them here.

Tractor Ventures continues on its crusade to make venture debt sexy for startups

• The team has just launched 24-hour lending approvals and plans for an equity fund in 2024 worth ~$50 million. (Smart Company)

• This comes amidst an apparent ‘surge’ in interest from Aussie founders in debt funding options, as reported by Capital Brief.

Evolt 360 scored a major deal with Canadian fitness chain (Business News Australia)

• Evolt 360 has a range of medically-graded machines that can provide comprehensive insights into body composition health.

• While they already have exclusive distribution rights with Jetts Australia and other deals with large domestic chains, this new deal will put their technology into nearly 200 clubs across GoodLife Fitness Canada’s facilities, which service ~650,000 members.

Airtree & Antler-backed founder winds down her business, with bravery worth commending (Smart Company & Startup Daily)

• While the closing of a startup might not intuitively seem like a “win”, we wanted to highlight this story to recognise the founder for making such a hard decision to step away from her business to put her health first, and being willing to publicly share her story for others to learn from.

Australian Computer Society (ACS) appoints its second-ever female President (Startup Daily)

• Helen McHugh will step into the role in 2024 for a two-year tenure, after several years of involvement with the organisation spanning back to 2014.

• ACS is an industry body that prides itself on being the “voice of Australia’s technology sector…[working] to grow the technology sector while making sure IT professionals act ethically, responsibly, and in keeping with the best interests of not only their employers, but the wider community.”

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

KaaS (Knowledge as a Service)

Gemma’s Pick 💁‍♀️ Marketplaces - The Questions VCs Will Ask, by Hunter Watkin (Rampersand)

• Marketplace software startups are undoubtedly one of the trickiest to successfully execute and grow thanks to their inherently complex nature. To overcome early growth hurdles, many will turn to VC funding but (as you might expect) the hunt for capital is always met with difficult questions.

• In this article, Hunter provides a detailed and fascinating explanation of the common questions VCs will likely ask marketplace founders and what they’re looking for in the answers to determine a startup’s likelihood of success.

Will’s Pick 💁‍♂️ Australia's University Startup Complex (LinkedIn Article) by Duncan Ferguson

• Duncan writes how Australia research commercialisation deals compare to international university deals. Are we hamstringing the ecosystem with poor expectations and leaving too much value on the table?

• The article highlights collaborative deal structuring and how Aussie research organisations can incentivise entrepreneurial research and take fair deals for long-term success.

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‘Til next time,

👋 Will & Gemma