SafetyCulture takes $200 million valuation haircut to bank another $75 million

The worth of SafetyCulture has become a game of snakes and ladders, with the 20-year-old workplace checklist app developer taking a $200 million drop in its valuation to $2.5 billion as VC AirTree becomes a late-stage convert in a $75 million raise.

Just over 12 months ago, the scaleup’s valuation jumped $600 million for a $34 million raise as early-stage investors, including Blackbird, began heading for the exits.

This time around, another $90 million worth of shares in the privately-owned business changed hands in secondary sales, alongside an infusion of $75 million in new capital, led by AirTree, which chipped in $40 million, with superannuation funds Hostplus and Hesta also buying in, along with Blackbird, which first invested 11 years ago.

Blackbird partner Rick Baker called it “an iconic Aussie software business” they continue to believe in.

“We’re in an interesting position where our early Blackbird funds, which have held SafetyCulture shares for over a decade, are nearing the end of their life,” he said.

“So we have sold down some of those funds’ holdings. They’ve done very well out of their early investments in SafetyCulture and although we see the value continuing to grow over the coming years, it’s time to take some liquidity on those early investments.

“Transactions like this mean that companies can continue executing on their plans in the private markets as their venture capital shareholders come to the end of their fund lives. So it takes the pressure off having to find acquirers or rush to list companies, and this is the case with this transaction.”

Baker said he can “see strong growth ahead” for the business.

“So we were keen to buy from our latest fund and we also offered the opportunity for some of our investors, namely some of the super funds, to co-invest in the round alongside us.”

The Sydney-based tech platform’s founder and CEO Luke Anear said it was a tough environment for raising, but it gave staff a chance to cash in on the company’s success.

“But we’re proud of the results the business is delivering and pleased that we can continue to create regular liquidity events for early investors and long-term employees,” he said.

Last year’s raise saw Sydney fund Marbruck Investments join the cap table alongside long-term investors Morpheus Ventures and Index Ventures, the latter writing its first cheque in 2016 when the company was worth just $160 million.

Early investors and employees have been been downsizing their stake in the business several times in recent years amid a series of cash injections that bolstered the company’s valuation alongside secondary sales, with media for the business often conflating to two figures to make the capital raises larger than they were.

For example, a $49 million “raise” in October 2020 featured just $14 million in equity, led by Blackbird Ventures with Index Ventures as they also scooped up shares from other investors. At that point the business was valued at $1.3 billion.

Just seven months later, the valuation hit $2.1 billion, following a $95 million raise led by US-based venture capital firm Insight Partners.