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Business strategy

Ignition Lane’s Weekly Wrap: Crypto moves, the future of Facebook, VC moat gloats, Zero Co’s record week

- October 25, 2021 5 MIN READ
Shebah
Shebah founder George McEncroe placed her startup in the hands of administrators.

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. Here’s their review of the week. 


One coin to rule them all

Bronze in the crypto olympics. According to a new Finder crypto survey, Australia has the third-highest proportion of crypto ownership, with 17.8% of those surveyed owning some digital coin. Those owners are 1.5 times more likely to be men than women.

At the top of the list is Nigeria with 24.2% of its online population saying they own a form of cryptocurrency, followed by Malaysia with 18%. NZ was 19th place, with just 7.1% ownership – likely due to the fact that everyone’s broke trying to afford $3/L petrol and $3m ramshackle houses on a $30k salary.

Aussie: a crypto-friendly jurisdiction? A Select Committee released 12 recommendations on how Australia should regulate crypto. They’re surprisingly pragmatic, aiming to balance consumer protection and the wellspring of innovation that comes from decentralised finance (DeFi), cryptocurrencies and digital assets.

The recs include: requiring crypto exchanges to be licensed; establishing a “bespoke” custody or depository regime for digital assets; creating a new company structure to allow decentralised autonomous organisations (DAOs); overhauling CGT on DeFi activities; and a tax discount for crypto miners using renewable energy.

The first US Bitcoin ETF. If that doesn’t make crypto feel mainstream enough, Bitcoin is skyrocketing—A$80k and counting—following the launch of the first U.S. Bitcoin futures exchange-traded fund, BITO. This week BITO became the fastest ever ETF to pull in US$1bn of assets under management, smashing a previous record held by Gold ETF. Before you buy, it’s worth noting that the fund bets on the coin’s fluctuations, so the ETF price may not track the bitcoin spot market price.

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Wonder what the Winklevoss twins (the Winklevii) think of Facebook’s metaverse play. More on that later…

Local newsings

Simply the best. Atlassian has been named one of the 25 best places to work in the world. It’s the only Aussie company to make the cut. 90% of employees at Atlassian say it is a great place to work.

Want to steal Atlassian’s secrets? Lucky for you the US$105 bn company has an entire magazine dedicated to the topic.

Who needs politicians when you have billionaires?! Atlassian co-founder Mike Cannon-Brookes and his wife Annie have committed $1.5bn of their family wealth to climate change philanthropy and green investments by 2030. The family’s investment office, Grok Ventures is now one of the biggest venture investors in the country.

Not cash back. Online shopping rewards platform Cashrewards entered into a takeover agreement with ANZ’s 1835i, valuing the company at $89.5m. The $1.135/share offer is a 19.5% premium to Thursday’s closing price, but a 35% discount to its December IPO price. 1835i already holds 19% of the company. Cashrewards made revenue of $20.1m from 273k active users in FY21.

Shebah shuts up shop. Ride-sharing startup for women, Shebah, has gone into voluntary administration. Shebah started to speed off around 2017, when it broke the record for Australia’s biggest crowdfunding raise ($3m at the time), with women making up 94% of investors.

Pre-pandemic, the startup was providing up to 10,000 trips each month. As well as being used to take women to social events, Shebah provided school transport for children and worked with domestic violence support services to provide safe transport for women and children.

Lockdown hit hard and Shebah struggled to find venture investment to keep the company afloat. The pandemic sure finds special ways to hit women where it hurts (if that concept is news to you, more on that here).

VC differentiation. This week in VC: Square Peg demystified capital raising terms, each of which “address either economics or control,” e.g. valuation, dilution, anti-dilution and liquidation preferences. AirTree shared what investors look for in early-stage startup investments: team, market, traction. Blackbird released a new startup ideas competition focussed on uni students, Wild Futures.

Cool job alert. StartupVic are on the hunt for a new CEO after Judy Anderson stepped down, citing that “it’s time for someone new with a fresh perspective.” Thanks for all your great work Judy!


Raising news

Sub-$4m deals continue to proliferate.

Zero Co raised $11m – a $6m VC raise led by Square Peg and a $5m crowdfund raise. The crowdfunding raise closed in just a day, smashing all records and breaking the Birchal website.

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Source: Zero Co founder, Mike Smith.

Hemideina raised $10m to develop a more convenient hearing implant that could challenge industry giant Cochlear.

MOBI raised $10m led by Capital Zed. Formerly known as Mobi2Go, MOBI provides hospitality businesses with websites, mobile apps, table ordering, kiosks, aggregator middleware, loyalty, delivery and analytics software.

Rezdy raised $7.5m from existing shareholders for its online booking and distribution platform powering the experiences industry.

OpenInvest raised $5.5m led by Pinnacle Investment Management for its wealth administration platform that enables asset and wealth management firms and stockbrokers to offer their own digital investing solutions to retail investors.

Immediation raised $3.6m for its dispute resolution (digital courtrooms and mediation tools) platform used by Australian federal courts and New Zealand government agencies.

CipherStash raised $3.3m led by AirTree. CipherStash is building an end-to-end, searchable encrypted data storage platform.

Safewill raised $3m for its wills & estate administration software.

EngageRM raised $2.3m led by the Gandel Invest family office for its CRM for Sports & Entertainment.

Muso raised $2m led by Rampersand (investment memo) for its music booking and management marketplace.

EnergyBank raised $1.9m led by Icehouse Ventures and joined by Blackbird (investment memo) for its energy storage solution that leverages the depth of the ocean and gravitational potential.

ResVu raised $1.5m for its white label mobile app and management platform for strata managers.

Parpera raised $1.3m, following a $1m million equity crowdfunding campaign last year. Parpera will provide sole traders and small businesses with a digital wallet, card, invoicing, payments, cash flow, and tax management capabilities.

BuildPass raised $1m for its app that’s designed to make managing construction sites safer and more efficient.

SkyBuys raised from the Gandel Invest family office to develop its online duty free and travel retail platform and app.

SiteMinder released its IPO prospectus confirming it wants to raise over $600m and appointed Pat O’Sullivan and Jenny Macdonald as directors. Pat spearheaded national brands like Optus and Nine Entertainment and is currently on the Board of ASX-listed carsales.com, Afterpay and TechnologyOne. Jenny has a solid governance history on Boards of ASX-listed companies, including Bapcor, Redbubble, Australian Pharmaceutical Industries and Healius.


In the US of A

SnapSplat. Cracks in the world’s biggest ad-driven companies are starting to appear as a result of Apple’s ad tracking clampdown. Changes made to iOS in April have made it harder for apps and advertisers to tell when their ads are working.

Snapchat parent Snap says this caused it to miss this quarter’s revenue target by $3m, and that it expects the impact to continue next quarter. Wall Street was not impressed. Despite also announcing that Snap crossed US$1bn in revenue for the first time and added 13 million daily users this quarter, shares dropped more than 26% following the announcement. Next up on the chopping block: Twitter and Facebook, who are are due to report results next week.

WeWork finally listed. More than two years after WeWork’s original IPO plans spectacularly collapsed, WeWork began trading on the NYSE after a SPAC merger. The shares popped 13% as trading began, ending the day with an enterprise value of about US$10.5bn, which is around 2.4 times its projected 2022 revenue (still high for a property company). A far cry from the $45+bn figure bandied about in 2019.

About-face for Facebook. Facebook is rumoured to be changing its company nameà la Google/Alphabet in 2015. Given recent whistleblower revelations and onslaught of US antitrust regulators closing in, it may feel a little like a Mrs Doutbfire moment: jumping into different get up hoping no-one notices. That said, the change may help Zuck’s ambitions to position the company as the centre of the metaverse—a future internet world augmenting digital with reality—and to distance his perceived involvement in the group’s operations.

 


That’s a wrap! We hope you enjoyed it.

Bex, Gavin and the team at Ignition Lane