Global tech

Ignition Lane’s 2023 wrap

- December 29, 2023 5 MIN READ
Fleet Space Technologies
Flavia Tata-Nardini, cofounder of Australia's fastest growing startup, Fleet Space Technologies
Welcome to Ignition Lane’s Tech 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 subscribersHere’s their review of all the big news in tech for the year. 


2023’s heavy hitters

The companies that shocked us, distracted us and wow’ed us in 2023

OpenAI’s board fired Sam Altman, prompting a full-scale revolt from staff who said they’d leave and follow Altman to Microsoft if he wasn’t reinstated (which would have made the greatest, cheapest acquihire in history). After a confusing five days, Altman was reinstated as CEO and the board reshuffled. There are now no women on OpenAI’s board.

Canva wowed us with Magic AI and insane growth. It is approaching US$2B+ ARR, growing at 50% (incredible at that level of revenue), is cash flow positive, with more than 170 million monthly users (for context, ChatGPT is approaching 200 million users).

Nvidia’s (chipmaker) market cap soared past US$1 trillion.

Fleet Space topped The AFR’s Fast 100 list for 2023: “its satellite-enabled technology for hunting critical minerals was used by the likes of Rio Tinto, Barrick Gold and Core Lithium to complete 150 geological surveys. Its revenue grew at a compound annual rate of 582 per cent over the last three years, to reach $8.9 million.”

Binance (cryptocurrency exchange) and its CEO (Changpeng Zhao) pled guilty to criminal charges for anti-money laundering and sanctions violations for enabling terrorism and illegal narcotics activity. This was one the U.S. Attorney General’s largest enforcement actions in history, with over US$4 billion (AU$6.1bn) in penalties. The settlement agreement allows Binance to continue operating. Bitcoin hit an 18-month high this week. Who says crime doesn’t pay?!

Milkrun closed its doors after burning through $85m.

SBV crashed after a bank run. Yep, that was 2023.

The messy state of Aussie venture

Down down (and we’re definitely not talking about prices at Coles). According to Cut Through Venture, Australian startup investment year-to-date is just $3.1 billion – down 58% compared to 2022’s $7.3 billion, and well below the $10.6 billion raised in 2021. Climate tech tops the charts for the largest sector to attract VC investment.

One positive side-effect of this dearth of capital raising is that the media are now forced to go beyond big raise headlines to celebrate startup success and hard work – such as Mentorloop quietly building a sustainable startup, and Deputy’s path to profitability with revenue growing by 38% to $104m last FY.

Spare a thought for the VCs. It’s not just startups who are struggling. VCs themselves are finding it tough to raise their next funds. In Australia, smaller funds in particular are under pressure to figure out what differentiates them in order to justify why LPs should still back them. Some have closed their doors.

Over in the US, the number of VC funds raised this year is on pace to hit a nine-year low. Mega OpenView wound down this week, and there’s likely more to come. The Information:

The sudden fall of the firm, which employed at least 74 people and had raised a total of $2.4 billion, could be a sign of rising pressure on VC firms to generate returns in an era of higher interest rates. Its 2020 fund has lost money on paper, according to documents seen by The Information.

Blackbird under fire. It’s been a rough few weeks in the press for one of Australia’s biggest VCs, Blackbird. The AFR reported grumblings from other VCs that Blackbird is cutting their lunch, and has become an “Australian Tiger Global,” i.e. winning over founders with high valuations. We guess that’s one way to differentiate from the VC crowd.

Separately, there has been critique of its gender diversity investment. SmartCompany painted a picture that Blackbird has only invested in male-founded startups—11 to be precise—since it made a pledge in July to invest in more women founders (Blackbird says unannounced investments do include women founders). Blackbird then posted updated gender investment stats, which were equally not great—just 23% (5 of 22) of the companies it has invested in via its 2022 fund have at least one woman founder.

Anywhooo, you may be thinking, “who cares this is a pipeline issue. VCs can’t magic up more startups with women founders.” And yes, we still need to get more women into tech careers:

But then there are data points like this, that clearly highlight the deeply rooted in biases that still persist in the investment world: despite the fact that more than 70% of femtech companies are founded by women, all-male femtech startups raised significantly more than women founders in each of the last five years.

Carta’s latest Annual Equity Report also concludes that we’ve headed backwards in 2023. “Since the startup boom of 2021, fundraising has been harder for all founders, but no one has been more affected than women founders and founders of color.”

Everyone needs to do better. Not just the big dawgs like Blackbird, who are actually leading the way with their gender investment transparency and targets.

To make matters worse. Sexual harassment in startupland has come to the fore over the last month. It started with Sam Joel, founder and chief executive of GiveTree, stepping down after posting a slew of offensive remarks regarding women in Australia’s tech industry. Then more stories started to come out of the woodwork. Founder of startups Normal and Fuzzy, Lucy Wark, listed a raft of examples showcasing that sexual harassment, victim-silencing and protection of perpetrators is a persistent problem across Australia’s startups and investors.

Note, it just so happens that all of the ‘good news’ Aussie stories mentioned in this Wrap are startups led or founded by women – Canva, Fleet Space, Mentorloop, Deputy, Tractor Ventures and even Australia’s eSafety Commissioner (mentioned below).

Guess who’s back. Westpac’s VC Reinventure might not be writing any more cheques, but Westpac can’t resist. It led a $28m Series B for Rich Data Co, an AI loan assessor for small businesses.

Equity’s out, debt’s in. HSBC launched a $200m venture debt offer for Australian scaleups to compete against One Ventures, PFG and Tractor Ventures (who can now approve loans in 24 hours!) in the venture debt space.

Offsite 2024

It’s been a monumental year for startup leaders. Fatigue is setting in, and it’s time to take a well-deserved break. As Stripe’s formidable COO advised, “whether you’re in that moment right before growth — or you’re on your way there — press pause.”

Come back in the new year with a fresh perspective, and let us help you focus, align, and kick the year off with a bang.

We currently have one (maaaaybe two) spot available to facilitate an offsite in Jan. Lock it in now.

“If you’re in tech, I highly recommend Ignition Lane facilitate your offsite. In just a few hours, they surfaced our core strategy by asking engaging, thought-provoking questions that helped our team to bond & align.”

-Paul Greenberg, Chairman MyDeal (and godfather of online retail)

On the rise around the world

Is VR and AR about to have its moment? Meta’s Quest 2 and Quest 3 outsold Apple AirPods and AirPods Pro on Amazon on Black Friday and Cyber Monday. In other Meta news, Facebook is rolling out default end-to-end encryption for personal messages and calls across the platform and on Messenger. About time.

Not if, but when. A data breach at genetic testing company 23andMe allowed hackers to steal 6.9 million users’ personal details. It then changed its terms of service to prevent customers from suing the firm or pursuing class-action lawsuits against it. Hot PR & legal tip: maybe do that before you’ve been breached.

The likelihood of being breached is increasingly inevitable. A new report commissioned by Apple says 2.6+ billion personal records have been exposed in data breaches over the past two years. In ANZ there are growing calls to introduce a ‘right to erasure’ under privacy laws, particularly after the 14 million person data breach at Latitude Finance.

Deepfake. Australia’s eSafety Commissioner released world-first industry standards that will require tech giants to take better action to stop online child sexual abuse material and pro-terror content, including “deepfake” child porn.

Videos featuring Elijah Wood, Mike Tyson, and Priscilla Presley have been edited to push anti-Ukraine disinformation, according to Microsoft researchers.

There’s an app for that. Uber will open up its platform to London’s black cabs next year. It has done the same with taxis in Paris, New York and Rome.

Granfluencers. China’s government has tried to limit young people’s use of Douyin, China’s most popular short-form video app. Instead it turns out the elderly have become hooked, as they try to find connection and companionship. In the West, Twitch’s CEO says there’s a market for grandmas to livestream knitting.

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

Bex, Gavin and the team at Ignition Lane