Techboard, Australia’s largest startup and tech directory, released its latest quarterly funding report today, revealing the March 2019 quarter was a bumper period for the sector when it came to funding.
While the finalisation of the bid for online property exchange network PEXA (Property Exchange Australia Ltd), launched in late 2018 by the Commonwealth Bank in a joint with Link Administration Holdings Ltd and Morgan Stanley Infrastructure Partners Inc., skewed the result by $1.604 billion, other funding still topped $1 billion in the March quarter in more than 150 funding events identified by Techboard.
The other standout for the three months was the US$100 million series C raise for Melbourne-based foreign exchange fintech Airwallex, which valued the company at more than US$1 billion, making it the second Australian tech unicorn to emerge in early 2019.
Amaysim’s Peter O’Connell. The company made a pro rata entitlement offer of A$50.6m at $0.60 cents a share in February.
But after a bumper quarter, Techboard CEO and co-founder Peter van Bruchem believes the good times are about to end and the longer-term trend is down, especially in raises under $20 million.
“Our assessment appears to indicate a downward trend in funding from public markets and a slowing of growth overall in private funding,” he said.
“In addition to this we are seeing a reduction in overall number of private investments, down to 60 for the March quarter 2019 from the quarterly average for 2017/18 of 97 per quarter. This reduction is in sub $20m investment rounds in several deal size ranges over multiple periods.
“This is perhaps starting to reveal a picture for the startup and tech sector that may be cause for concern.”
Here are 20 key findings in Techboard’s March 2019 quarter report that really stand out.
Overall Funding for the quarter: $2.697 billion (or $1,093 million excluding PEXA acquisition)
Largest funding event: PEXA acquisition $1.604bn
Private investment (including VC) recorded: $477m, up from $362m in Dec Q 2018 and $346m in March Q 2018
Public investment recorded: $229m, up from $114m in Dec Q, but down from $507m in March Q 2018 (which included $377m by NextDC)
Overall investment: $714m up from $480m Dec Q, but down from $859m in Mar Q 2018
Debt: $310m down from $390m in Dec Q 2018
Largest Private funding: Airwallex $141m series C
Largest Funding Type by $: Acquisitions 60.4% ($1.632b)
Equity crowdfunding raises (startup and tech only) more than doubled from $2.7 to $6.9m
Most funding events by type: Grants/accelerators with private funding closely following behind.
Must funded category: Property 61.4% with Fintech 2nd dominating all other sectors with 51% of remainder once the PEXA acquisition is excluded.
Largest IPO: Uniti Wireless $16.2m
Largest ICO: Liven $14m
Largest Placements: Amaysim $50.6m; ZipCo $42.8m
Largest Debt: Moula $250m
Private vs Public ratio: 2:1 (from 3:1 in Dec Q)
Largest Equity Crowdfunding: Ridesharing company Shebah’s $3m, breaking the new record set by Xinja ($2.569m) earlier in March
Most funded State: Victoria 79.4% – $2.145bn, including PEXA acquisition $1.604bn – excluding PEXA, NSW raised 40% ($339m) to Victoria’s 34.4% ($291m).
27% of private investments by number had foreign investors, 67% by value.
Of the 10 top largest private investment rounds, representing 81 % of private investment in the quarter (by value), half were foreign investor led.
AND: 5 charts that show the long-term trend for startup funding in Australia is not looking good
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