Good Morning,
Welcome to the final Cut Through Venture for 2021. Eight months into Cut Through Venture, I'm grateful for the more than 3,000 startup investors, founders, builders, and fans who subscribe for a clearer view of Australian and New Zealand venture funding. I have several initiatives in the works to continue to drive funding data access and transparency. Stay tuned.
Thank you to the 187 feedback survey responders. Several ideas have been sparked for 2022 off the back of the plethora of positive and constructive feedback received. A few things to note right now:
- The most common request was to dig deeper into the fundraising journey of the startups mentioned in CTV. I will test into a few different approaches for this in 2022.
- You also really love stats. Every day this month, I'm posting a hot startup funding stat to Twitter. Follow me on Twitter for more stats than you can handle – some more valuable than others...
- 58% of responders want a daily CTV email. While this is not on the cards right now, I highly recommend our friends at Letter of Intent for a daily digest of M&A, ECM, and VC deals. Stay tuned for fun CTV//LOI collabs -- starting with this one which dropped this morning. I also recommend Mopock Cloud for a regular deep dive on ASX-listed tech.
- The CTV deal flow email has led to 58 founder<>investor introductions. Subscribers to the deal flow email find it valuable, though many cited that regulation makes it difficult to deploy small angel investments into startups. Cheryl Mack neatly summarized a lot of the obstacles responders highlighted here. The final deal flow email for 2021 hits inboxes this week. Subscribe here.
- Many of you asked for merch! It was too late to have CTV Christmas sweaters knitted, but one of the finest laptop stickers ever created is now available. All sticker sale proceeds will support the Save the Children Programming the Future program. Grab yours here.
December Ask: Have an amazing Christmas and New Years.
Ok, onward...
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Not slowing down.
For the third time in 2021, more than a billion dollars of venture funding flowed into local startups. For the first time this year, though, a single deal stood tall above all others. Job and project management software Queenslander simPRO clocked Australia's largest venture round ever, raising US$350M from global investors K1 and Level Equity.
December will need to pull out something special for Q4 to top Q3 as the biggest funding quarter ever. But regardless of what happens in December, 2H 2021 will clock more dollars funded than the whole of 2020.
Vilfredo Pareto will finish the year smiling from above, with his principal holding firm again. The largest 20% of deals accounted for 81% of total deal volume. simPro accounted for one-third of total deal volume, while the top five largest deals accounted for 64% of total deal volume.
Three startups raised more than $100M, six raised more than $50M, 13 more than $20M, and 17 brought in more than $10M.
Usual suspects B2B software, Fintech, and Healthcare/Biotech dominated funding, accounting for 70% raised dollars. For the sixth time in 2021, more Fintech firms received funding in November than any other segment.
Queensland led the charge from a dollars funded perspective for the second time in 2021; although simPro accounted for 91% of dollars invested in the state. Together, NSW and VIC accounted for 64% of all reported deals. NSW average deal size was 70% higher than the 2021 average for the state, hitting $23M. VIC was 45% higher than its 2021 average at $19M.
Series-A and later startups had their second strongest funding month ever, behind September. Among the top Series-A rounds was Mr Yum, which raised the third-largest Series-A round ever, and the largest by a female founder.
The average Seed round size has remained steady over the course of 2021, averaging between $2.5-4M each quarter. The same cannot be said for Series-A and B rounds which, following the global trend, has seen the average deal size more than double from $9M in Q1.
The average age of startups at each funding stage was in line with prior months. 16 Covid-era founded startups raised capital.
Another 🦄 Month...
Step into the metaverse. Avocado Guild raised $25M to help scale its DAO, which purchases in-game items (think, a sword or a shield in a combat game) and lends them to play-to-earn gamers in return for a share of the rewards earned from gaming. Splash raised $27M to scale its platform for creating music within the digital world. Also raising a chunky $35M round was Mod.io, which provides a community infrastructure layer for gaming companies, allowing game players to create their own content that can move between games. Hindsite raised $3.3M to expand the use cases for its wearables-powered virtual learning platform.
A little less silly this season. Booze free booze favourites Heaps Normal and Lyres raised $8.5M and $37M, respectively, to improve holiday party behaviour across the nation. Lyre's is now valued at $500M and tipped to reach Unicorn status imminently. No lie. Also discouraging silly behaviour (of going to the supermarket), Supie and Your Food Collective raised small rounds to scale their online grocery platforms.
Thanks for caring. Kynd and Five Good Friends both raised rounds to help scale their in-home care platforms. Kynd, which matches disability support workers with those that need them, raised a $2M Seed. Five Good Friends, which supports a broader set of customers who require in home services ranging from cleaning, to medical, to companionship, to meal prep, raised a mystery round from global investor EQT. [cu]health and Midnight Health both raised to continue scale their online health care platforms. Cannabis health care platform Montu raised $3.5M in less than two days on Birchal.
I need some advice. Padua and Asendium raised sub $10M rounds to help supercharge financial advisors. Meanwhile, full-stack trading and wealth management infrastructure fintech Openmarkets Group raised $17.8M to support an acquisition as it prepares for a 2022 IPO. Podcasting network Equity Mates raised a Seed round to continue to build out its catalogue of millennial and Gen-Z friendly financial podcasts.
To the moon 🚀 Fleet Space raised a $36M Series-B investment round to expand its workforce and increase capacity to manufacture miniature satellites in Adelaide. Fleet is building a constellation of shoe-box-sized satellites to deliver wireless connectivity to internet-of-things enabled assets in hard to reach places. The startup is also part of a consortium of companies supporting NASA's pursuit to put a woman and a man back on the moon by 2024.
We have a record, folks.
simPro raised the largest-ever venture round by an Australian startup, banking $497M from US investors K1 and Level Equity. The latter previously backed simPro with a $40M investment in 2016. simPro provides job and project management software to the specialty contracting industry -- an area in which Aussie startups seem to have carved a nice niche. Veyor and ClearCalcs both raised smaller rounds this month for their construction management SAAS solutions. Other startups playing in the space, including Inspace XR, Unleash Live and Archistar.ai also raised recently.
Airwallex is no stranger to Cut Through Venture readers. Airwallex has raised more capital than any other Australian startup in 2021, adding A$574M to its coffers over three announced funding events. The cross-border money-mover added US$100M to its September Series-E. The extension values the business at US$5.5B, up from its US$4B valuation just two months ago. The company reportedly has a ~A$800M war chest and is readying itself for an acquisition spree.
Led by a founding team of two brothers, artificial intelligence healthcare provider Harrison AI raised one of the largest Series-B rounds of the year from local and international investors and strategics. The startup's first product, in which AI acts as a second pair of eyes in assessing chest x-rays, currently serves >50K patients per month in Australia and the UK.
When QR-code-powered ordering and payments provider, Mr Yum, raised $11M back in April from a bevvy of celebrity investors, I said that as a result of COVID, QR-codes had transitioned from obscurity to the cool table. Seven months on, Mr Yum has raised a gigantic Series-A from Tiger Global and a collection of top local investors. It would seem that they've stood up from the cool table and proceeded straight to a VIP booth with bottle service.
E-bike manufacturer and fleet management startup Zoomo raised equity from the respective VC funds of both Atlassian founders, along with a tranche of asset-back venture debt. Much like QR codes, electronic bicycles are experiencing a COVID-powered renaissance, experiencing a surge in demand powered by unbridled growth in the home delivery market during lockdowns across the world.
The Founders
The level of funds flowing to female-founded startups was disappointingly low.
- Just four of the top 30 funded startups were led by mixed teams.
- 17% of all deals and 14% of all funding went to teams with at least one female founder.
- Unfortunately, just 0.3% of total funding went to all-female founding teams.
- The average round size achieved by mixed teams was ~30% ower than all-male teams.
The Funders
Excluding crowdfunding participants, more than 133 unique investors were reported as part of November's venture funding activity. The most active investors were locals Blackbird (Harrison.ai, Fleet Space, First AML, Bardee), Icehouse Ventures (First AML, Supie, Vertus Energy, Segna), Equity Venture Partners (Practice Ignition, Particular Audience, Zipline.io), Skip Capital (Harrison.ai, Mr Yum, Zoomo), and Tiger Global (Mr Yum, Assignar, Practice Ignition).Birchal saw the most crowdfunding action with Montu, Triple-1-Three, Nuut, and NudeHerbs closing successful campaigns.
That's it.
See you next year.– Chris
