Aussie Start-up & Venture Capital Summary | 19th August 2023
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💰Rokt eyes an IPO (AFR)
Ecommerce technology company Rokt is incorporated in the US, reportedly in preparation for its Nasdaq listing in 2024. This is despite the controversy surrounding the company amidst allegations of employee drug use and sexual harassment in its offices, which are vehemently denied by the CEO.
Early investors, including Square Peg, are no doubt looking forward to the exit event. The company was last valued at $US2.4 billion ($3.5 billion) following a secondary share sale last December.
💃 Aussie women in VC hit the spotlight (Forbes Australia)
You know you’ve “made it” when you’re featured in a glam photoshoot for Forbes, right? There was loads of love online this week for this article that highlighted some of Australia’s leading VC investors (who happen to be women), all of whom have links back to influential investor and RBA board member Carol Schwartz.
The article also highlighted (yet again) the huge funding gap between male and female-founded start-ups; for example, it’s estimated that in FY22, only 0.7% of early-stage funding went to female-only-founded businesses, despite representing 22% of all start-ups (Deloitte).
🙈 Commbank start-up employee sues over a 60-hour work week (Smart Company)
An employee of Unloan is suing the start-up owned by x15ventures (CBA’s corporate venture firm) in federal court, claiming he was regularly forced to work every day of the week and across multiple roles and responsibilities not detailed in his position description.
While some start-up founders and operators might react to this with “so what? this is not unusual in start-ups”, it does raise the question of where start-up “hustle culture” blurs into downright unsafe workplace practices. And if the start-up wasn’t affiliated with a ‘Big 4’ bank, would an employee see a path to report such practices?
🤔 Did you know… Breakthrough Vic is technically Australia’s largest start-up & innovation investment fund?
Former Victorian Premier John Brumby is the Chair of the fund worth ~$2B which is bankrolled by Victorian taxpayers to the tune of around $750 per household. The AFR’s Adir Shiffman wrote a really interesting opinion piece on it this week, while the fund announced a new investment into Zena Sport (write up below!).
Renewable Energy / Hydrogen
Hysata hits with $23.9M raise to build a green hydrogen future
NSW-based green hydrogen electrolyser, Hysata, has secured $23.9M, including a $20.9M grant from the Australian Renewable Energy Agency (ARENA), for its innovative electrolyser project. The state-government-owned Stanwell Corporation also contributed $3M of capital to the 5MW electrolyser development next to the Stanwell Power Station near Rockhampton.
Hysata’s special electrolyser, which can split water into hydrogen and oxygen, is 20% more efficient than existing technology. The extra efficiency is a game-changer for green hydrogen, which electricity costs can prohibit. Hysata has also developed a turn-key solution that can transform the economics of green hydrogen production. The business has locked in solid growth with a 9.4 gigawatt pipeline of conditional orders in place. Green hydrogen is expected to contribute 20% of the total energy required by 2050 to reach net zero. Hydrogen also hits hard-to-abate sectors like steel, chemicals, high-grade heat and heavy transport. If you want to go into depth on the science of what Hysata is building, check out this article with diagrams, chemical formulas and more.
Health & Safety
SafetyCulture snags $34M at $2.7B with a pathway to growth
Health and safety software platform, SafetyCulture, has landed $34M in funding at a valuation of $2.7B; a significant $500 million uplift from its prior valuation. Despite previously stating that they no longer needed external funds, CEO Luke Anear has confirmed a focus back towards growth and simultaneously revealing the company has bought out its insurance partner, QBE.
The raise comes from Morpheus Ventures and Marbruck Investments, with Index Ventures contributing a smaller portion. Alongside the funding, SafetyCulture is planning a sale of up to $500 million in shares next year from early investors, with a smaller employee sale also on the horizon.
Luke Anear sees these moves as a way to release the pressure to go public and facilitate liquidity for long-term employees. The hidden objective could be around acting against the need for an IPO, mirroring actions seen in other local companies.
Due Diligence: AFR
Curiious lands $1M to help businesses create more immersive experiences
Sydney-based virtual reality start-up Curiious, known for its immersive, story-driven experiences, has landed $1M led by Galileo Ventures. Curiious focuses on utilising 3D worlds for customer engagement, job training, and marketing. The company’s technology recently facilitated the projections of the late John Olsen’s art onto the Sydney Opera House as part of Vivid festival.
Curiious does more than just projections; its platform allows users to interact in 3D environments, offering live video presentations, collaboration tools, games, and virtual conferences.
The SaaS platform has already landed large clients like Johnson & Johnson, Peugeot and Infiniti. Infinity, for example, utilised the platform to host their new car unveiling during the pandemic and has remained with the platform.
Due Diligence: Media Week
Marqo manages an $8M Seed round led by Blackbird to revolutionise search
Melbourne-based AI search company, Marqo, founded by former Amazon engineers Jesse Clark and Tom Hamer, has raised $8M in a Seed round led by Blackbird to create a new AI-powered search engine. Inclusive in the round were The Creator Fund and January Capital.
Unlike traditional keyword-based searches, Marqo’s engine uses vector search, a computational method that offers faster and more accurate results. The technology is designed to enhance existing product search features in online stores and other applications rather than compete with established search engines like Google.
With clients ranging from enterprise-sized ecommerce platforms to digital shop assistants powered by celebrity personas, Marqo aims to revolutionise the way searches are conducted in various applications.
To go deeper on the Marqo platform, check out the latest Blackbird wild hearts podcast to hear directly from the co-founder & CTO Jesse Clarke.
Due Diligence: AFR
One Model lands $41M Series B to build out HR data analytics platform
One Model, a US-based HR data analytics platform founded by ex-pat Queenslander Chris Butler, has secured $41M in Series B funding. The investment, led by Riverwood Capital and supported by QIC, AV8, and Geekdom, will bolster the company’s presence in Brisbane, where Butler originated and studied before relocating to the US in 2007.
One Model, co-founded in Austin, Texas, uses AI to analyse workforce data, providing actionable insights to global brands for better ‘people outcomes’. The new funding will accelerate the One Model product development roadmap, enhancing its core technology solutions, People Data Cloud, and One AI. One Model essentially provides a toolkit for extracting, modelling and governing HR data and delivering that data to various applications and services.
Nick Capell of QIC highlighted One Model’s ability to offer insights into employee engagement, positioning them for accelerated growth. QICs investment from their $100M Business Investment Fund represents the first backing from an Australian fund for One Model.
Anda lands Antler funding to focus on the distribution of an early-stage breathwork platform
The Melbourne-based wellness wearable, Anda, has secured pre-Seed funding from Antler. In response to the growing global focus on holistic wellness, Anda has been developed to capitalise on the rise of breathwork practices in Western culture. The company is developing a smart wearable, the Anda band, that serves as a personal breathing coach to aid physical and mental wellbeing.
The Anda band is designed to guide users through optimised breathing techniques, using haptic feedback to provide real-time assistance during stress and anxiety episodes. Anda has already established a form of product market fit with their Anda Breathwork Community which has built out a respectable waitlist for the product.
It is currently creating a hardware prototype with a market launch planned for early 2024. Antler’s investment will fund product development, software building, and a marketing campaign for a Kickstarter launch in 2024.
Due Diligence: Startup Daily
Customer Engagement / B2B
Pendula lands $14.5M to drive better customer journeys
Sydney-based customer communications platform, Pendula, has secured $14.5M in a funding round led by Octopus Ventures.
Pendula’s software enables brands to automate conversations with customers, aiming to reduce churn and increase revenue per user. With integrations of generative AI technology and capabilities to pull in external data, the platform has handled an impressive 85 million conversations in the past year.
Pendula was founded in 2017 and previously declined an offer from Octopus Ventures for a Series B funding round, opting instead for backing from Australia’s MA Financial, which also participated in the latest capital raise. The messy pre-raise was sorted out when Pendula’s CEO Alex Colvin revealed that the company has tripled its revenue since 2021 and is now cash-flow positive in Australia. The new capital will be used to aggressively expand into the UK market, with a focus on hiring 10 staff in new locations in London and Singapore.
Zena Sport snags $148K to take on breast injury in sport
Zena Sport, the Victoria-based business specialising in women’s impact protection sportswear, has secured a $148K pre-Seed investment from Breakthrough Victoria. The funding comes as women’s football gains global attention with the 2023 Women’s World Cup and Zena Sport is making waves with its scientifically tested chest protection vest for women in contact sports like AFL, rugby, basketball, and soccer.
Founded in 2018 by Donna and Brad Johnson, Zena Sport aims to scale globally and expand its product offerings with the next iteration of the Zena Sport Z1 Vest.
Breakthrough Victoria has seen clear alignment with their objectives to back innovations that positively impact Victorians and deliver long-term financial returns. This funding follows a win for Zena Sport, who also snagged an Amazon Australia Launchpad Innovation Grant for 2023, valued at over $90,000.
Due Diligence: SmartCompany
If you're a founder or investor who has just closed a round, please reach out to us at [email protected]
New Funds Who’s This?
The fund will co-invest between $100,000-$200,000 into at least five early-stage AgTech start-ups over the next 12 months.
Like LaunchVic’s Alice Anderson Fund, the fund will co-invest with private sector investors, who will match the government’s contribution by 2:1. Applications for co-investment are open to local and international investors with promising AgTech start-ups in their pipeline. Application guidelines and more information is available here.
The fund has a fascinating portfolio of around 150 companies, including Psylo, Immutable and Fable Food and is now mainly focused on deep tech and science-based start-ups.
It’s a global VC, with founder Chris Hitchen splitting his time between Australia and Germany, but has only now opened up to Australian investors for the first time, with a view to invest in more Australian start-ups from the forthcoming fund.
Cannabis Corner 🌿
Medigrowth has crowdfunded ~$3.5M from 2047 investors (Birchal)
The biotech company distributes medicinal cannabis products (THC, CBD & dry flower) via multiple channels, including their telehealth platform Haiku.Health.
They have a partnership with Deakin University and are riding the tailwinds of legalising medicinal cannabis, which has apparently led to almost 1 million approvals to access the products. Now, their sights are set on further clinical trials and global expansion.
Medcan Australia has boosted its production capacity with a new $12M vertical farming facility in SW Brisbane (Business News Australia)
The medicinal cannabis producer founded in 2016 has been working towards this milestone for around 2 years, trying to keep up with rapidly growing consumer demand.
The company now has the most technologically advanced medicinal cannabis facility in the southern hemisphere and supplies more than 10% of the dried flower market in Australia.
🎾 AO Startups picks seven new sports & entertainment technology start-ups to showcase (Press Release)
The second intake to the program, led by Tennis Australia’s Innovation team and supported by Wildcard Ventures and Techstars, allows participants to pilot their cutting-edge technology during the 2024 ‘Summer of Tennis’.
The one Aus-based company chosen, PAM, builds connected environments through smart navigation and digital way-finding tech.
💰️ Stockspot gets a nice payday via Mirae buy-in (AFR)
Stockspot is a personal finance robo-advice platform founded by Chris Brycki (ex-UBS) in 2013.
Korea’s Mirae Asset Global Investments has a portfolio of real estate, infrastructure, private debt and VC investments and in 2022 had ~$2.5B in funds under management. James McGrath, who was previously at OneVentures, now works for Mirae and was the point of contact for Brycki to start acquisition talks.
Mirae has purchased a controlling stake (>50%) of Stockspot, allowing some existing shareholders to cash in and the company to keep growing via investment in marketing ad product development.
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VC board members telling SaaS companies how to put AI in their product
— Niki Scevak (@nikiscevak)
Aug 17, 2023
KaaS (Knowledge as a Service)
Gemma’s Pick 💁♀️ Growth in Reverse
This newsletter by Chenell Basilio provides a weekly deep dive on how top creators built their audiences from 0 to 50k+ subscribers. As a marketer and newsletter writer, it’s been a fascinating read for me, but the lessons are also relevant to anyone looking to grab the attention of a growing audience (…start-up founders 👀 ). My overall takeaway - while there are common tactics that work for many, the sheer variety of approaches showcased proves there’s certainly not just one way to achieve success.
Will’s Pick 💁♂️ Akin’s Laws of Spacecraft Design
Akin’s Laws are a funny mix of solid advice for designing within constraints and taking an honestly relaxed stance on design. I’ve personally got minimal exposure to design background and find these “laws” highly entertaining when thinking about a new project or challenge.
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‘Til next time,
👋 Will & Gem