Welcome to Ignition Lane’s Weekly Wrap, where they cut through the noise to bring you their favourite insights from the technology and startup world. Ignition Lane works with ambitious business leaders to apply the Startup Mindset to their technology, product and commercialisation problems.
This wrap goes out free to subscribers every Saturday. Don’t forget you can catch Gavin Appel discussing the week on the Startup Daily show on Ausbiz every Monday at 2pm. If you miss it, you can catch up on the week’s shows here.
Here’s their review of the week.
ANZ startup newslings
Aussie startups on the world stage. The Global Startup Genome Report released on Thursday found that the startup ecosystems in Sydney and Melbourne are worth a combined $34.5bn. That figure would surely be higher taking into account September’s record fundraising news.
Sydney was ranked first in the world for its fintech technological readiness and 24th overall (up 3 places since last year). Atlassian, Canva, Zip, Athena Home Loans and Afterpay got special shout outs. Sydney’s early-stage funding was US$922m in FY21, more than double the global average of US$431m.
Melbourne’s startup ecosystem has grown by $3b in the past 12 months, bringing it to $10b – a growth rate of 475% in four years. Most excitingly, early stage funding has increased 35% over the past year, increasing from $363m to $529m. Riots, earthquakes, playground bans, the longest lockdown in the world. Nothing can stop Melbournians building great startups.
The solution to Australia’s coal dependency. The Indonesian government has approved a proposal for Sun Cable’s 4,200km underwater cable to pass through the archipelago from the Northern Territory on its way to Singapore. The Sun Cable project, backed by billionaires Andrew “Twiggy” Forrest and Atlassian’s Mike Cannon-Brookes, could see Australia be one of the world’s largest solar energy exporters.
Getting crowded. Aussie crowdfunding has surged 125% – a whopping $46m more was raised in FY21 than the previous financial year. Fintechs, alcohol and food product startups took the largest slice of the cake. But, we’re yet to see an Aussie crowdfunded company have a successful exit. So will the investment pay off?
All this and yet, the Federal Govt still doesn’t give a crap. In five years we’ve had not one, but six Ministers for Industry, Science and Technology. The latest person to enter the position is someone who already has a preeeetty big portfolio on his hands, Energy and Climate Minister Angus Taylor. The decision has been met with criticism and, sadly, a sense of resignation to the seemingly endless revolving door of lacklustre representation of the tech industry. It’s a mess. The Federal Government just doesn’t seem to give two hoots about an industry that could make or break Australia’s future. And so the revolving door keeps turning…
Unlockd comes out punching. One of the cautionary startup tales of our times is the rise and fall of Unlockd. The lesson: beware of building a business with a single point of failure. The adtech company was unceremoniously blacklisted by Google, ultimately causing its liquidation in 2018. Now Unlockd is suing the tech giant in the US, claiming Google’s behaviour was anti-competitive. Can the Aussie startup that could, make good? Stay tuned.
Auckland becomes the apple of AWS’ eye. Amazon Web Services is spending $7.5b to build data centres in NZ. The data centres are expected to open in 2024, which AWS says is a potential $10.8b boom for the local economy.
Flying Ferraris. Airspeeder, an F1-style racing competition using flying electric cars, is partnering with Telstra. Telstra will work with Airspeeder and with Alauda Aeronautics to create immersive AR/VR entertainment experiences for fans and develop flight and ground control systems for vehicle testing and development.
ANZ fundraising & deal news
Trend of the week: bank corporate venture capital (CVC).
Airwallex raised US$200m at a US$4bn valuation led by Lone Pine Capital. Airwallex is an end-to-end global financial services provider for businesses and is on track to process US$20b of annualised payments.
Founder Jack Zhang has huge ambitions: “we want to own the whole ecosystem. We want to be like the Apple of business finance.” Not sure whether that excites us or scares us. Both? Airwallex’s culture has been under scrutiny this year – hopefully they’ll be pumping some of those funds into creating a better people experience.
Existing investors 1835i Ventures (ANZ’s CVC arm), DST Global, Salesforce Ventures and Sequoia Capital China also participated in the round. Existing investor VC Square Peg is notably missing from that list (this piqued our interest because Square Peg has been named as an investor in every Airwallex raise since 2017).
Fundsquire raised $75m in debt and equity from Fasanara Capital. Fundsquire provides R&D finance for startups.
TradeWindow raised NZ$15m led by ASB Bank ahead of a potential NZX listing. TradeWindow’s software helps importers and exporters digitalise their trade processes.
Flippa raised $11m led by OneVentures – its first venture-backed round since being founded in 2009. Flippa facilitates exits for millions of online business owners. It sees over 600,000 monthly searches from investors looking to connect with business owners.
:Different raised an undisclosed amount from CommBank’s x15ventures. :Different is a property management solution. This is part of x15’s play to build out its nextgen of property-related services. It is launching a digital loan offering (Unloan) later this year to complement its conveyancing tool (Home-In), which launched in early 2020.
Verve Super raised $2.7m for its super fund, coaching and education business that aims to help women grow their wealth with ethical investments. Verve has more than 5,000 members and $180 million in funds under management. Unlike 99.9% of the raises we list in the Wrap each week, Verve managed to secure a cap table full of women investors.
Monochrome Asset Management raised US$1.8m (A$2.4m) for its fund which provides bitcoin exposure for Australian wholesale clients.
Zip’s Indian play. Zip invested $70m in Indian BNPL, ZestMoney. With a population of 1.4bn and extremely low credit card penetration (around 3 credit cards for every 100 people), India is primed for digital finance. ZestMoney is cofounded and led by British expat Lizzie Chapman.
Dubber + Notiv. Conversational recording software firm Dubber acquired Notiv in a deal worth $6.6m. Brisbane-based Notiv was founded by BugCrowd cofounder Chris Raethke and Dr Iain McCowan in 2018 to improve meeting note taking.
Xplor filed to IPO. Xplor Technologies is a payments company backed by Advent International. The group includes Melbourne-based Xplor Education and NZ-founded payments company, Transaction Services Group. In 2020, Xplor served over 82,000 businesses that processed over $27 billion in payments, operating across 158 countries. The valuation is expected to be between US$4-$6bn.
Around the world
Remote work works. DevOps firm GitLab filed to go public. GitLab provides a suite of tools that enable engineering teams to build, deploy and secure software. It will be the first remote-only public company ever, with over 1,400 employees in 66 countries, and 0 offices. For all you number crunchers out there this is a good quick analysis of GitLab’s growth and likely valuation: 2020 revenue $152m (87.3% YoY growth), 87.8% gross margin, 148% net dollar retention, $55.4k avg customer value: est. $15-17bn valuation.
Zoom’s $14.7bn Five9 acquisition is glitching. The US Justice Dept is threatening to block the deal due to national security concerns over Zoom’s connections to China. Plus, Five9’s shareholders also have to approve the all-stock acquisition. But since the deal was announced on July 18, Zoom shares have lost more than 20% of their value, while Five9 has dipped around 5%.
A new FB CTO after 8 years. Andrew Bosworth (or ‘Boz’ for short) who currently heads up the hardware division at the ‘Book, will replace Mike Schroepfer as CTO. A close friend and confidant of Zuck, Boz is one of Facebook’s most outspoken employees. He’s perhaps best known for a 2016 internal memo in which he acknowledged that Facebook’s need to grow users at all costs was “de facto good,” even if it led to people dying as a result of bullying and terrorism.
Boz will continue to lead the hardware group (Facebook Reality Labs) while taking on software engineering and AI. If nothing else, the decision is a clear commitment to the metaverse (a persistent digital world where people interact via avatar) that will tie together AR, VR and mobile for real time interaction.
Amazon Ring partners with law enforcement. Amazon Ring is providing doorbell cameras to victims and survivors of domestic abuse to help solve crimes. Providing evidence of an abuser breaking and entering, for example. Ring, which sold 1.4 million devices globally in 2020, believes it can create a wide system of surveillance. But the practice is awash with privacy concerns. Civil liberties groups have raised issues around racial profiling and excessive surveillance – not just for those opting in, but for the passersby who get caught on camera.
Creator economy. You will soon be able to tip your favourite creators with bitcoin on Twitter. And, according to a new study by The Influencer Marketing Factory, people are doing a lot of tipping. More than 60% of U.S. social media users have virtually tipped a creator. The creators surveyed made the most money on TikTok, Instagram and YouTube. Guess they’re keeping quiet about their OnlyFans revenue?!
Clubhouse isn’t dead? Clubhouse revealed over 700k rooms are opened every day on the audio-only app. But who knows whether that’s a growing figure – it’s the first number the $4bn startup has shared.
What’s going in LatAm startup land? Lots. Here’s a great thread.
2/ The number of new unicorns minted every year is doubling, and the value creation of existing unicorns is accelerating (already having doubled in 2021) pic.twitter.com/fzSgGFxZHP
— Julio Vasconcellos (@JulioV) September 22, 2021
Useless fact of the week: Nintendo was founded 132 years ago on 23 September 1889. It made hand-painted playing cards. Today it is worth US$63bn.
That’s a wrap! We hope you enjoyed it.
Bex, Gavin and the team at Ignition Lane