In the eight days between 13 and 20 September 2020, we reported more than $ 1 billion in funding announcements for Australian startups.
In the eight days between September 13 and September 20, 2021, we reported more than $ 1 billion in funding announcements for Australian startups.
Okay, so technically it’s a little over a week, but the sheer amount of money flying around in such a short amount of time is still staggering. During my three years of reporting on Aussie startups, I have not seen anything like it.
The technology sector is growing and starting to make a measurable contribution to the economy.
And these companies are paving the way for others like them – showing them what is possible, opening the way for growth and even providing new sources of funding.
Many also approach business through the lens of influence – something that will affect the generation that follows them.
These raises I’m talking about include:
September 13: Scalapay: $ 210 million
September 14: Who Gives a Crap: $ 41.5 million
September 14: SiteMinder: $ 100 million
September 14: Mable: $ 100 million
September 14: Prospection: $ 45 million
Sep 15: Canva: $ 270 million
Sep 15: Unchangeable: $ 82 million
Sep 16: Delegate Connect: $ 10 million
Sep 16: Alex Bank: $ 20 million
Sep 20: Airwallex: $ 276.5 million
In total, that is $ 1.16 billion.
The list is not exhaustive and contains only a round of $ 10 million or more. I have not included Verve Super’s $ 2.6 million increase, for example.
But this week’s activity follows a series of other major ticket announcements. V2food raised $ 72 million in August, for example, while we saw in July Culture Amp raises $ 135 million, Go1 secured $ 270 million and Skedulo raises just over $ 100 million.
Becoming an adult
There are likely to be some drivers for this rise in advanced financing activity, as right-wing Capital partner Benjamin Chong explained last week.
First, we are simply seeing Aussie startups grow. Founded five to ten years ago and securing investments, companies are now well established, making money and employing thousands of people.
At the same time, persistently low interest rates mean that more money flows into venture capital and private equity funds, which means that there is more cash available to use.
Finally, Chong noted that we are really in the “information age” and watching the technology revolution “play before our eyes”.
More people are using more technical products. That technology is starting to change entire industries and sectors, he added.
All in all, this gigantic billion week is an indication of a starting scene that is flourishing, growing and coming into its own.
Talk to SmartCompany, Giant Leap CEO Will Richardson says we are seeing “a real mature age” in the Australian technology ecosystem. And he expects that we will only see more capital flow in in the next few years.
“I would not be surprised if the current milestone were broken earlier than we expected.”
Blackbird founder and partner Rick Baker also suggests that all of this proves that the VC model works locally.
“For years, the start-up and venture capital model has only been proven in selected parts of the world, such as Silicon Valley and Israel,” he says. SmartCompany.
“Recent rounds prove the success of this model in Australia.”
Still, he says it’s less about how much money is raised, and more about how these companies affect the Australian innovation ecosystem and economy to a greater extent.
Canva alone has created around 2,000 new jobs in Australia – 1,000 in the last year alone.
Focus on philanthropy
One of the week’s biggest news articles was Canvas’ $ 270 million increase, giving the upscaling a valuation of $ 55 billion.
However, what caught the attention of many was not necessarily the numbers, but co-founder Melanie Perkins’ announcement that she and co-founder and partner Cliff Obrecht would donate the “vast majority” of their fortune to charity, via the Canva Foundation.
The couple owns 30% of Canva, which is now worth about $ 16.5 billion.
Who Gives a Crap raises $ 41.5 million, but on a smaller scale it also showed interest from both traditional and power investors in a company that donates half of its profits to charity.
We see more founders who are determined to use business as a force for good in one way or another.
“Our thesis is that integrating influence into a company’s DNA will attract and motivate the best talent,” Richardson explains.
“It will mean that these companies surpass their peers.”
Both Canva and Who Gives a Crap have received a lot of pressure for their business approaches.
Especially when it comes to Canva, this attention will only influence others to follow in their footsteps, Richardson adds.
And we’ve seen this happen before. Chuck Feeney, founder of General Atlantic, which led the investment in Mable, was one of the first American billionaires to donate almost all of his fortune to charity, Richardson notes.
He inspired Warren Buffet and Bill Gates to do the same.
“He’s had a lasting impact that has affected others for decades,” he says.
“Without a doubt, the next generation will also influence others in the coming decades.”
Startups breed startups
They say you can not be what you can not see. Seeing startups succeed can help them in the difficult early stages to visualize what is possible in Australia.
“Seeing the success of companies that can start here, raising capital here and building their teams here gives new founders the confidence that they can do the same,” says Baker.
But success breeds success in more ways than that.
In recent years, we have also seen an increase in founders at a later stage who use their own fortune to invest as angels.
Founders from Adore Beauty, Linktree and Culture Amp all invested in Who Gives a Crap, along with Canvas Cameron Adams. And in June, a group of local entrepreneurs clubbed together to create the Australian group of angel groups Funds.
Investments from founders, as well as VCs, are “critical” to build on momentum in the start-up sector, says Richardson.
It means more money for early ventures, but also gives new founders access to advice and mentorship from people who have been in their shoes.
“This type of activity is what is crucial to creating the conditions for success for the future,” he adds.
– It is a really positive sign.
Baker adds that it is important for VC like Blackbird to continue to support companies at an early stage.
Blackbird was one of the earliest investors in Canva, before the founders even had a product, and has contributed in every step since. Of course, that investment was smart.
“There is now a vibrant community in Australia that can give these founders the support they need to get started, so that a whole new generation of companies can influence the world,” says Baker.
“There has never been a better time to start and develop a startup in Australia,” he adds.
“Society is growing, the ecosystem is maturing and more capital is flowing through.”