Good Morning,
Well, what a month! A special welcome to the 137 new subscribers who joined in September – you picked a great time to jump aboard. Thanks to those of you who continue to refer friends, family and colleagues – you're the best. Adios to the six unsubscribers – our door's always open.
Many of us sensed it, but I'm happy to confirm that September funding announcements hit an all-time record, obliterating the previous record set just two months ago. September's $2B in announced deals capped off a quarter of funding like no other. More than $3.5B flowed into great Australian and New Zealand startups in Q3.Before digging into September, here are a few key preliminary stats from Q3:
- 204 deals were announced
- Top segments were: 1) Fintech > 2) Media/Collab/Gaming > 3) B2B
- NSW startups attracted 52% of total funding, VIC attracted 22%
- 22.4% of funded startups had at least one female founder
I'll share some other Q3 tidbits on Twitter this month. Follow here.
October Ask: Share your favourite resources for startup founders or early-stage investors. It could be a book, a podcast, a blog post, a list, anything. Share it here. More details to come! 👀
Ok, onward...
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A spreadsheet breaking month.
Following a quiet August, total venture deal announcements skyrocketed to an all-time high in September, and ANZ startup investment surpassed $2B for the first time. While a big figure, the $2B is a discounted representation of the actual dollars invested across the ecosystem – almost 18% of reported deals did not disclose the dollars invested. Megadeals from Canva, Airwallex and Scalapay accounted for 38% of total deal volume.
The top 20% of deals accounted for 80% of total deal volume. Seven startups raised $100M or more, and they were all based in NSW or VIC. 12 startups raised more than $50M, 20 raised more than $20M, and 30 raised more than $10M.
The crowdfunding platforms were all but silent.
After a quiet couple of months Fintech almost had a unicorn month of its own, accounting for just shy of half total September funding. The top three segments accounted for 80% of the total dollars invested.
New South Welshmen and women took advantage of lockdown to report a bumper month of funding. NSW beat out the prior funding record for the whole of Australia and New Zealand set in July. Fellow locked-down state VIC had a record-breaking month, as did SA and WA. New Zealand produced a flurry of smaller deals.
Deal volume was high at all stages of maturity: Seed, Early (Series-A + Series-B) and Late rounds all broke their respective records for both deals and dollars funded.
The average age of startups at each funding stage was in line with prior months. 14 Covid-era founded startups and a handful of companies older than ten years raised capital.
84 deals for $2B!
Enter the chain gang. Blockchain, DeFi, and NFT startup fundraising ran rampant in September.
In NFT-ville: Immutable raised a massive Series-B to make it easier for creators to build their game, marketplace, or NFT application in hours, with no blockchain programming required. Altered State Machine aims to take NFT's beyond JPEGs, with its platform for launching trainable AI-based bots which can be minted and sold as NFTs.
In DeFi-land: Amasa raised to develop its platform that aggregates the income streams generated via different DeFi products that reward users for their participation. Marhaba DeFi's fundraising will support the development of its Shariah-law compliant DeFi ecosystem.
In blockchain infrastructure: zkTube Labs seeks to improve congestion, processing delays and high gas fees on Ethereum. Subquery provides a set of data indexing and provisioning tools to let developers focus on product development and user experience rather than building querying systems.
Meanwhile, Monochrome raised a small Series-A from some serious crypto heavy-hitters to build out what appears to be a traditional managed fund that tracks the price of Bitcoin. And, Rush Gold raised a Seed to remind us that Gold was the original Bitcoin.
Breakin' banks. The pursuit to bring down the finance old guard continues, with many startups with niche financial offerings raising capital. Alex Bank is an entirely digitised bank currently focussed on delivering a broad set of personal loans. Azupay's new payment solution gets businesses paid in real-time instead of waiting days for transactions to settle. Fundsquire provides non-dilutive and affordable growth capital for innovative companies via R&D tax credit loans and revenue-based financing. CarClarity takes the sleaze out of car finance. Superhero, Verve Super and Gigsuper all raised capital to support the scaling of their novel superannuation offerings. And Nano Loans is rapidly scaling its 'no paperwork required' home loan product. Nano executed a maxi power move, attracting investment from three ex-CEOs of the Big-4 banks.
Verrency raised to help the incumbents fight back. The startup enables financial institutions to launch a range of fintech capabilities via its set of white-labelled components that integrate the incumbents' existing technology stack via APIs.
The business of business. Flippa raised outside capital for the first time, having bootstrapped itself for 12 years to become the world's largest marketplace to buy and sell online businesses. Joyous raised from local investors for their digital feedback solution that extracts valuable data from employees and helps develop cultures of transparency within large organisations. Functionly raised an all-star Seed round to make the expensive traditionally-consultant-driven world of org design accessible for small-to-medium-sized businesses through software. Delegate Connect raised from a deep bench of local investors to continue to scale its virtual and hybrid events platform that aims to deliver an attendee experience less snoozeville than a Zoom webinar. TradeWindow, a NZ trade-tech company that helps importers and exporters digitalise their trade processes, raised an over-subscribed round in prep for its listing on the NZX later this year.
"Nothing bad is really happening"
Money for the money movers. Airwallex raised a mega-round for the second time in 2021, tapping a host of local and international firms to support new product development and geographic expansion. Airwallex's go-to-market has been somewhat unique, with a dual focus on its direct-to-customer and its API-driven embedded finance solutions. Airwallex has tens of thousands of customers using its financial services directly. In parallel, a growing list of other fintechs use Airwallex APIs to deliver cross-border financial solutions to their customers. This B2B2B revenue stream is incredibly sticky and will be the likely growth engine for Airwallex as it powers toward its rumoured IPO.
Cover Genius, which allows some of the world's most recognised digital brands to integrate bespoke insurance products at checkout via a single API call, raised capital from a large Japanese insurer and set of global VCs. Tiger Global led the Series-A into Scalapay, the Australian born but now purely European-focused Afterpay-aspirant. By targeting European markets overlooked by the BNPL global behemoths, Scalapay got a head start to become the market leader across several markets. Meanwhile, Till Payments tapped both local and NYC based funders to support the global roll-out of their multi-channel payments capability for small-to-medium sized merchants.
Comfort, both Home & Away. O.G. mega-VC General Atlantic made its first big Aussie bet, investing $100M into Mable, whose platform matches disability and aged care workers with the people who need their help. Mable is scaling rapidly, focusing on flexibility to cater for people's desire for choice and control over their care and support. Dylan Alcott OAM, one of our greatest ever athletes, is also an investor in Mable. Dylan had a reasonable 2021 on the tennis court, taking out Paralympic Gold and all four Majors. A feat I'm glad that Djokovic failed to do.
Unless you own a hotel, you probably don't think about SiteMinder a lot. The fifteen-year-old business powers the commerce backend for more than 35,000 hotels globally. SiteMinder, which undoubtedly had a somewhat challenging pandemic, raised capital from a broad set of new and returning local and overseas investors. An IPO is tipped for the not-so-distant future.
And then, of course, there's Canva. In May, I wrote that Canva is rare, not for its unicorniness, but its Proficorniness™. I'm very aware that many of you are investors in Canva, or know the ins and outs of the business far better than I do. Accordingly, I just want to share a quote I stumbled across in a 2018 blog post by Melanie Perkins. The post included a note she wrote to herself in 2011, during an endless struggle to secure a key hire and investor support. It is pertinent for anyone building something, working towards a goal, or just struggling with their day to day life. It took me 3 minutes to spin this up in Canva...
The Founders
Funds flowing to female-founded startups hit an all-time peak in September:
- The two top-funded startups were led by diverse teams.
- 27% of all deals and 34% of all funding went to teams with at least one female founder.
- The average round size achieved by diverse teams was 33% higher than all-male teams.
Unfortunately, just 10% of all deals and 4% of total funding went to all-female founding teams.
The Funders
Excluding crowdfunding participants, more than 255 unique investors were reported as part of September's venture funding activity. Unsurprisingly, a record!
The most active investors were locals AirTree (Canva, Immutable, Who Gives a Crap, Joyous, Delegate Connect), Ellerston Capital (Prospection, Azupay, SiteMinder, All G Foods), Enterprise Angels (Ubco, Yabble, Hot Lime Labs), Firemark Ventures (Myriota, PropertySafe, Propper), Icehouse Ventures (Grater Goods, Joyous, HeartLab), and Regal Funds Management (Till Payments, Chrysos Corporation, Alex Bank).
That's it. Spread the word...
September was awesome. – Chris
