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.
Growth rounds are back. Why the hype?
Growth funding rounds are back with a vengeance this week, with four scaleups raising over $35m.
While raising millions in capital isn’t the be all and end all of startup success, it does mean more jobs, more M&A opportunity, and perhaps provides local startups a better chance to hold their own against the big dawgs on the global stage. We think that’s reason enough to get excited by these bigger raising announcements.
Are these scaleups Aussie’s future PayPal (market cap: US$236bn), ServiceNow (US$134bn), Rivian (US$105bn) or SpaceX (US$100bn+)?
Airwallex: the payments infrastructure of the future
Airwallex raised US$100m (A$137m) at a US$5.5bn valuation to expand its business banking and payments platform globally. Yep, that means its valuation has increased by US$1.5bn in just a couple of months – it last announced a US$200m raise at a US$4bn val in September. Lone Pine Capital remained the lead investor, alongside other existing investors including 1835i and Sequoia Capital China.
From Zero to $5.5bn in six years. Why the hype?
Business is becoming digital, borderless, instant. Payments and business banking are far from that. Airwallex has a grand, aggressive vision to become the future of global business payments infrastructure.
Airwallex currently has a two pronged approach. Its SMB banking services—global accounts, FX, cards—make up 40% of its business, while its B2B APIs that power other fintech products like GOAT (marketplace for sneakers), Papaya Global (HR platform) and Stake (share broker) make up the remaining 60%. And the strategy is paying off so far. In Q3, Airwallex hit an annualised run rate of US$100 million, with revenues up 165% YoY.
Airwallex might need the extra cash to battle Canva for top talent:
Almost everyone we offer a job has Canva offers, I thought we are in different industry :-
— Jack Zhang (@awxjack) November 19, 2021
Practice Ignition: the world’s first client engagement and commerce platform for professional services
Practice Ignition raised US$50m (A$65m) led by US growth equity firm JMI Equity. Interestingly that means that Tiger Global, who led Practice Ignition’s last round in 2019 and is usually aggressive with its investments, stepped back (they still participated though).
Practice Ignition’s platform integrates digital proposals, payments and automated workflows for the accounting and broader professional services market.
Why the hype? Many in the global professional services industry have woken up to the fact they need to digitise their operations and customer interactions in order to thrive now and into the future. Because of their low tech maturity, this market has been somewhat unloved by the SaaS world until fairly recently.
Recognising that great SMB management tools already exist (eg Gusto, Xero and Quickbooks), but aren’t tailored to solve accounting firms’ specific needs, Practice Ignition centralises and simplifies apps so firms can manage everything from one place.
JMI Equity’s Sureel Sheth considers this to be category-defining:
Guy, Dane and the team at Practice Ignition have built a category-defining business with a world-class team. We have been impressed by the strength of the product, the engaged and loyal customer base and the enormous potential for growth and scale globally.
To date Practice Ignition has helped facilitate more than 1 million client engagements and over $2 billion in client payments.
Zoomo: disrupting last mile delivery with small electric vehicles
Zoomo (previously Bolt) raised A$40m equity and A$40m debt for its electric bikes and micromobility subscription service, which it supplies to gig economy delivery drivers and companies that employ them. The equity round was led by Grok Ventures (Mike Cannon-Brookes’ & Annie Todd’s VC), supported by Skip Capital (Kim Jackson & Scott Farquhar’s VC) and ArcTern Ventures.
Why the hype? Green vehicles: hot. Faster last mile deliveries: hot. Making gig work more efficient: hot. Hot cubed.
Just look to Rivian, which IPO’d last week. Its current market cap is US$105bn. Except, while Rivian’s big vehicles might make sense for Amazon’s last mile deliveries in much of the USA, they don’t make a lot of sense in tightly packed cities, nor for food deliveries. Zoomo’s eBikes and mopeds, on the other hand, make perfect sense.
Zoomo says its vehicles are built for couriers who have to ride eight hours per day, complete with big batteries that can carry a worker on late night slogs through the rain.
Its partners include Deliveroo, Postmates, Doordash and UberEats.
Fleet Space Technologies: global satellite connectivity for Internet of Things (IoT)
Fleet Space Technologies raised US$26.4m (A$35m) at a US$126m (A$172m) valuation led with follow-on money from Artesian, Blackbird, Grok, and Horizons Ventures.
Why the hype? Faster, simpler and cheaper IoT connection. Gartner determined that IoT technology passed the ‘peak of inflated expectations’ and hit the ‘trough of disillusionment’ last year. It can only be up from there! It’s predicted that there will be more than 14 billion connected, low-power devices by 2025. Many of the solid use cases for IoT (utilities, mining, defence) are in rural areas with little-to-no broadband coverage.
That’s where Fleet comes in. Fleet is creating the world’s most advanced low-power satellite network, securing planet-wide coverage for IoT devices by using its in-house nanosatellite technology. Fleet’s smallsats are the size of a shoebox and generate 10 times more throughput per kilo than larger spacecraft.
Google & Scomo are friends again. After battling with the government and threatening to shut down Google search earlier this year, Google Australia has now announced its largest-ever investment in Australia – promising to invest $1 billion in local infrastructure, research, partnerships and jobs over the next five years. The funds will go toward launching Google’s first research (AI) hub in Australia, as well as helping develop cloud infrastructure.
Adding heeaaaps of value and insight at a Google office in Sydney on Tuesday, Scomo emphasised that the plan “doesn’t mean we’re trying to be the next Silicon Valley… Australia’s digital strategy is central to securing [the country’s post-pandemic] recovery.” So the country’s future tech strategy is underpinned by Google? Cool.
Want a loan for that Dyson v15? CBA began pushing Little Birdie offers in its banking app this week. That’s huge distribution for Little Birdie. But do people really want to have shopping alerts from their bank? Not us.
Stuck for present ideas? Go crypto! A new (self serving) Crypto.com survey of 2,020 Australians who have engaged with crypto in the last 12 months, found that about 26% would like to buy crypto-centric gifts this holiday season.
This week the company also announced it bought naming rights to Los Angeles’ most iconic arena: Staples Center, will now be known as Crypto.com Arena. How does a company that has only been around for 5 years splash US$700m on one marketing tactic? ICYMI crypto’s on fire and Crypto.com has passed TikTok to become the most downloaded app on the US Google Play Store.
While we’re on the topic, blockchain startups have raised US$15bn in venture funding in the first 9 months of this year – nearly 5x 2020’s total investment.
The sub-$10m raise roundup
FoodByUs raised $10m for its hospitality food wholesale marketplace that connects restaurants, cafes, and caterers with hundreds of wholesale food and alcohol suppliers.
Bardee raised $5m and came out of stealth mode. Formerly known as Beyond Ag (Startmate SYD20) cohort, Bardee has created a vertical farming system using fly larvae to transform food waste into nutrient-rich fertiliser and pet products. Co-founder and chief executive Phoebe Gardner:
“The insects actually move around as a pack, they go around collectively and eat everything. This [also] prevents methane production, so the only emissions emitted through Bardee’s system are water evaporation and the C02 from the insect’s respiration, which is not very much.”
Bardee also anticipates selling the insect protein product as food for humans once the Black Soldier Fly is approved by food standards regulators in ANZ. Do you want flies with that?
Montu raised $3.5m on Birchal for its medicinal cannabis business, earning it the title of the fastest equity crowdfunding raise to $1 million in Aussie history – just 13 minutes and 46 seconds.
[cu]health raised $3m to for its virtual medical practice for businesses. [cu]health provides a business’ employees with on-demand access to a suite of healthcare services to support and improve their health, wellbeing and productivity in the workplace.
VideoMyJob raised $2m for its video platform allows recruiters to create professional video marketing to attract, engage & retain talent.
ClearCalcs raised $1.65m led by EVP, with support from Shearwater Capital. ClearCalcs provides engineers, architects and designers with tools to streamline their calculation into a single platform.
Moodflx raised a seed round for its “mood navigation system” to help employee wellbeing. The app picks up on trends in the emotional engagement of the workforce, providing targeted insights to influence decisions and resources.
Goings on in the world
India’s biggest IPO & crash. Paytm (a partial abbreviation for “pay through mobile”) raised US$2.44bn at a US$18.7bn valuation in India’s biggest ever IPO. However the market didn’t react too kindly – shares closed 27% below its issue price on the first day of trading. Founder and CEO Vijay Shekhar Sharma’s response? “It is new business model. It takes a lot for someone to understand it.” Meanwhile Sharma netted US$54 million from the selldown of his shares.
Paytm offers a range of services including peer-to-peer digital payments, a digital payments bank and ecommerce platform. India has traditionally been dominated by cash payments. However Paytm has benefitted from people becoming less willing to use physical cash during the pandemic, and the government’s recent push to reduce the use of cash. Tax, please.
Nearly 22 million taxi and rickshaw drivers, shops, and other vendors in India now accept Paytm from 337 million registered consumers. Chinese payments giant Ant and Japanese technology group SoftBank are amongst its biggest backers.
Casper’s unfriendly ghost: the public markets. Boo. DTC mattress company Casper plans to leave the NYSE for $6.90 per share – a 94% premium to last Friday’s closing price, but nearly half its Feb 2020 IPO price of $12. While its sales have continued to rise, operating expenses including customer acquisition costs have continued to escalate. Not a great signal for the DTC space.
No touching, no talking. Starbucks is using Amazon’s “just walk out” cashierless tech in a new NY concept store. Coffees can be preordered and available on arrival. Then you can peruse the store, taking items on and off the shelves while Amazon’s tech tracks and charges you for what you keep.
More proof for Web 3.0. A group of crypto enthusiasts, ConstitutionDAO, crowdfunded an astonishing $47 million in ETH in less than 72 hours to bid for a rare copy of the US Constitution. Alas, they lost out to a bidder with deeper pockets. If it had succeeded, the decentralised autonomous organisation (DAO) planned to determine the Constitution document’s future by vote based on governance tokens distributed through the Ethereum blockchain. Instead it has to figure out how to return the money – less gas fees of course.
FYI, lockdowns are over. Chart of the week goes to the NY Times:
That’s a wrap! We hope you enjoyed it.
Bex, Gavin and the team at Ignition Lane
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