April 1, 2021

CTV Funding News - 1Q 2021

Welcome to the Cut Through update for 1Q 2021, where we slice and dice quarters startup funding. Enjoy!

Australian Funding Ecosystem

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Funding News & Analysis

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A new personal side project.

Good morning all. I have an incredible job. I get to scour the globe for the best and brightest startups that solve important pain points for one of the world's great companies. I then go deep with a handful of outstanding entrepreneurs to help them turbocharge their growth by partnering with us.

The challenge is, since I do this from New York, I spend little-to-no time with great Aussie founders.

That's why I'm starting this personal project, Cut Through Venture – a set of resources that will help Australian early-stage founders and investors find each other. I'll aim to cut through the barrier between early-stage founders and investors by increasing transparency, opening up new communication lines, and facilitating mutually beneficial opportunities between all ecosystem participants.

This is the first edition of my data-centric newsletter, covering startup fundraising in Australia and NZ. I gathered all the publicly available Q1 venture deal information and packaged it to drive insights. Also featured are several freshly launched startups. Two are fundraising now and eager to connect with angels and early-stage investors.

I have a few asks. 1) Please provide feedback so that Cut Through Venture can continue to evolve and improve. 2) Please refer friends/colleagues who might find it interesting – this initiative relies on network effects. 3) Finally, feel free to request introductions to the fundraising startups featured.

Ok, onward…

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Early-stage raises and recent launches

Each edition will feature two fundraising startups, with the opportunity to connect with the respective founders directly. These founders submitted their startups, and I chose to feature them due to the interesting problems they are solving and their overall potential.

I have not verified any of the information provided, nor am I providing financial or investing advice. I'm not soliciting or accepting any investments on behalf of these companies and have no financial incentive. I'm merely a matchmaker.

Gecko makes it easy to hire event items securely

Founders: Ben Kennedy, Alan Ng & Lal Birch

Segment: Retail / Marketplaces

Description: Hiring event items is hard for both rental businesses and customers. You have to call the rental business, receive a quote, and transfer payment. In addition to collecting payment, the rental business must perform a security check on the borrower. Gecko simplifies this by setting up an easy-to-use landing page that secures the transaction, saving time for both the rental business the customer.

Traction: Since September 2019 launch, $550K partnership GMV, 2.5K listings, 310 transactions.

Raise info: Raising $800K and currently speaking to investors. Deck available.

Connect with Gecko

SheSaw is putting women on the map using augmented reality

Founders: Donna Fisher & James Tomlinson

Segment: Media & Collaboration

Description: 4% of the world's statues are of women. It would cost $6B to raise this to 50%. SheSaw wants to solve this with their AR statues that give much-needed visibility to women affordably and immediately. Via the SheSaw app, users can discover women's stories and interact with AR statues dedicated to their achievements.

Traction: Launched in 2021.

Raise info: Just starting investor conversations.

Connect with SheSaw

Interesting launches

Kasu is an online platform for renting household items with an eco, community and financial focus. Chat to Humans built an AI and human-powered plug-and-play customer service team to convert website visitors into customers. OMGee is a marketplace for top boutique Australian wines, targeting buyers across Asia. CyberMarkets is the Expert360 for top local cybersecurity talent.  

Know a founder building something cool? They can submit their details here.

Put your money on a record year in 2021

Despite the pandemic, venture funding got off to a red hot start in 2021, falling just shy of levels in Q1 2020. This occurred without a single irrational 'neobank' funding round – which juiced the numbers in 2019-20.

Chalk this up to low interest rates, frothy global venture capital conditions, extraordinarily well-capitalized local VCs, and increased international fund demand Australian exposure driven by a growing list of local mega successes.

Fintech once again dominated investor demand, as did later-stage deals and all-male founder teams. Startups in NSW and VIC accounted for 88% of capital raised.

Get 'em while they're young: Earlier stage funding appeared sparse in Q1, though it is important to note that early-stage deals are less likely to be reported. Regardless of what my data says, the gravitation towards later-stage startup investing, with shorter terms and safer returns, is a typical progression as startup ecosystems mature.

A thriving startup ecosystem relies on a healthy pipeline of early-stage startups. Without early access to capital and support, future unicorns' wings get clipped before they get the chance to fly. Equity crowdfunding, angel syndicates, and newer options like recurring-revenue-based financing will help fill the gap. However, I believe a robust ecosystem of local pre-seed funds is crucial to providing a baseline liquidity level for companies in their earliest stages.

Power of the crowd: Once the home for novelty consumer products, equity crowdfunding has matured into a viable alternative to institutional fundraising. Pre-launch 'CFO in your pocket' fintech Thrive raised $1 million in under three hours and went on to raise $3M in three days. Fifteen other deals closed in Q1 across the major local platforms. There was broad diversification, too: Lumiant raised $1.2M to help financial advisors provide better advice to clients; LITT raised $1.5M for its hyper-local social network; Jarvis raised $700K to help keep our homes spotless; and, Cleer raised $650K to detect heart disease early.

Check out the main local platforms, Birchal, Equitise, OnMarket, and Venture Crowd – there are some exciting opportunities listed.

Fintech funding flowed: Fintech dominated Q1 funding at all maturity stages. Fundraising fintech's were diverse, solving pain-points across lending/BNPL, SMB, payments, and blockchain. There was, however, a steep over index towards companies with debt-related products. Non-lending startups that stuck out included yet-to-launch Zeller, which raised $25M for its intuitive banking solution for smaller SMB's; Indebted raised $14M to power its friendly debt collection tech; and, Synthetix and Trovio both raised to support their unique blockchain endeavours.

If it looks like a duck: Buy-now-pay-later is just a clever name for debt, and I'm convinced that Australia's obsession with it will end in tears. More than ten BNPL stocks are listed on the ASX, and many don't even do business in Australia. There must be something magical about our market that makes it ripe for BNPL stocks that I don't know about. Deferrit, Butn, and Campaign Agent all want to shell out don't-call-it-a-loan loans to help us pay for things across various niches, and they raised $40M between them. AFIA released a BNPL code of practice in March – the first edition of many, I'd guess.

Serve thy customer: Three interesting startups in the marketing and customer success space raised capital. Tribe raised $5.5M to match brands with influencers that will get them in front of potential customers; Marsello raised $3M to automate multi-channel marketing; and, Lexer raised $33.5M to help brands better understand their customers.

Chop the chops: There is more than one approach to the no-meat-movement, and Aussie startups prove that. Delicou has a range of plant-based meat alternatives and seasonings that you can buy from the supermarket freezer (if it's not sold out, which I think it is). Nourish Ingredients raised $14.5M for B2B2C play – they brew sustainable and animal-free fats and oils used to create varied flavour profiles in alternative protein products. Vow raised $7.7M to cultivate meat from the cells of animals 🤯 – turns out that this helps limit the environmental impact of agriculture, and produces meat distinct from, and better than, what animals can produce themselves. Like a sausage without the mystery crunchy bits?

Trust me, I'm a big deal

Cross-border payments unicorn, Airwallex, added to its US expansion war chest. Airwallex's cap table now makes for a hell of a VC Christmas party invite list, particularly with the new addition of Mike Cannon-Brooke's fund, Grok Ventures. Global SPAC fever has reached Airwallex – they've already turned down multiple offers to take the business public.

AirTree and Insight Partners up'd their stakes in LinkTree, the favourite social identity tool of global social media stars, politicians, and A-list celebrities alike. International mega-funds Index Ventures and Coatue (who happens to own a chunk of TikTok... helpful) joined them.

SEA Electric, fun fact, doesn't make boats. It is, however, a global leader in electric trucks and vans, so it made sense to take strategic capital from Canadian electric motor company Exro Technologies and other international players in the space.

QBiotics discovers, develops, and commercializes novel anticancer and wound healing products, and TDM Growth Partners senses they'll be Australia's next CBL. The signs look positive. (TDM creates super thoughtful content, btw, click here).

Funding female founders

The only segment to dominate more than fintech in Q1 was all-male founding teams. The funding gap faced by female vs. male entrepreneurs is a well-documented, global phenomenon that worsened during the pandemic.

Because I'm not across the historical data on the state of play in Australia, I'll hold off on making sweeping statements or critiques until a future edition. I'd love to hear from local investors and female founders to get their perspective (via this form).

If these numbers seem rough, it's worth doing the math on what happens when you back out the mega funding outliers. Lucy Liu from Airwallex and Victoria Gordon from Qbioitics accounted for 93% of the total $195M funding received by female founders.

The funders

Excluding crowdfunding investors, more than 120 different investors participated in the fundraising rounds in Q1. 20 made more than one investment, and six investors made three or more investments. These six were all locally based investors.

Most active investors
1️⃣ OneVentures: 5 deals (Employment Hero, Phocas, InDebted, Lumary, Coassemble)
👨‍💻 Leigh Jasper: 4 deals (VendorPanel, Mastt, Matrak, Deliciou)
🌲 AirTree Ventures: 3 deals (Employment Hero, DesignCrowd, Linktree)
🏰 Carthona Capital: 3 deals (InDebted, Paytron, Deferit)
🐧 Blackbird Ventures: 3 deals (Lexer, Vow Foods, Baraja)
👩‍🏭 Tenacious Ventures: 3 deals (RapidAIM, SwarmFarm Robotics, Vow Foods)

All of the Deals

Identifying these deals involved plenty of Google alerts and scouring of local news sites. Please submit any deals that I missed here. I'll continue to add to my database for publishing in my grand finale report at the EOY.

B2B Software and Services
🔎 COMtrac crowdfunded $1M (LINK)
🛒 Foresense  crowdfunded $657K (LINK)
🧠 Mindhive crowdfunded $425K (LINK)
🔐Guardhouse raised $850K (LINK)
💻 Hudled raised $640K (LINK)
🚜 AgriWebb raised $30M (LINK)
🧾 Karbon raised $12.9M (LINK)
🔗 VendorPanel raised $4.5M (LINK)
📈 Tradify raised $7.2M (LINK)
👔 Employment Hero raised $45M (LINK)
🔎LAB Group raised $4M (LINK)

🍻 BrewDog Group crowdfunded $821K (LINK)
☕ Green Caffeen crowdfunded $488K (LINK)
🍼 Pronto Bottle crowdfunded $185KM 👩 (LINK)
🥗Delicou raised a seed round (LINK)
🥗 Nourish Ingredients raised $14.5M (LINK)
🥗 Vow Foods raised $7.7M (LINK)

Cyber / AI / Data
💾 Adatree raised $1.2M 👩 (LINK)
🌐 Hyprfire raised $2.3M (LINK)
🔓 6clicks raised $5M (LINK)
📊 Smtr raised $2.5M (LINK)
🚗 Baraja raised $40M (LINK)
📈 Phocas raised $45M (LINK)

🧓 Lumiant crowdfunded $1.2M (LINK)
🏷️ Noobill crowdfunded $400K (LINK)
🤖 💸 Thrive crowdfunded $3M (LINK)
🏠 💰 Effi raised $1.2M (LINK)
💵 Maple Finance raised $1.8M (LINK)
🌏  Paytron raised $1.4M (LINK)
💳 Ordermentum raised $5M (LINK)
🪓 Deferit raised $15M (LINK)
👐 InDebted raised $14M (LINK)
👛 Lifepay raised $2.5M (LINK)
🏦 Trade Ledger raised $24M (LINK)
💳 Zeller raised $25M (LINK)
💱 Airwallex raised $132M 👩 (LINK)
🤑 Beforepay raised $9M (LINK)
💳 Butn raised $12.5M (LINK)
🚘 CarClarity raised $1M (LINK)
📺 Campaign Agent raised $13.3M (LINK)
🚀💎OpenMarkets raised $10M (LINK)
💰 Symple Loans raised $15M (LINK)
⛓️ Synthetix raised $15.5M (LINK)
⛓️ Trovio raised $6.3M (LINK)
⛑️ Quashed raised $550K (LINK)

Health / Biotech
💖 Cleer crowdfunded $650K (LINK)
🚑 Digitology raised $900K (LINK)
💉 BCAL raised $4M 👩 (LINK)
👵 Lumary raised $17M (LINK)
🦠 Qbiotics raised $50M 👩 (LINK)

HR / Education
👨‍🏫️ Coassemble raised $1.5M (LINK)
👨‍🎓️ Studiosity raised $10M (LINK)

Logistics / Hardware
🖨️ Me3D crowdfunded $420K 👩 (LINK)
🐛 RapidAIM raised an early round 👩 (LINK)
🌾 SwarmFarm Robotics raised $4.5M 👩 (LINK)
🚛 SEA Electric raised $55M (LINK)
⚙️ GreaseBoss raised $100K (LINK)
⚡ HB11 Energy raised $4.6M (LINK)

Marketing / Customer Success
🛒 Marsello raised $3M (LINK)
🛒 Lexer raised $33.5M (LINK)

Media / Collaboration / Gaming
👥Tribe raised $5.5M (LINK)
👫 LITT crowdfunded $1.5M (LINK)
📻 Some Media crowdfunded $170K (LINK)
👨‍🎤️ Vampr crowdfunded $1M (LINK)
🤓 GGWP Academy raised $425K 👩 (LINK)
👾 Illuvium raised $6.6M (LINK)
👨‍🎨️ DesignCrowd raised $10M (LINK)
🖇️ Linktree raised $59M (LINK)
🎥 Vloggi raised $750K (LINK)

Real Estate / Construction
🏢 Bricklet raised $3M (LINK)
🏠 LifeSize Plans raised $2M (LINK)
🏗️ Mastt raised $2.2M (LINK)
👷 Matrak raised $5.9M (LINK)

Retail / Marketplaces
🛍️ The Nile Group raised $2.5M (LINK)
🧼Jarvis crowdfunded $722K (LINK)
🔨 Mutu raised $183K (LINK)
🎣 Shore Trade raised $8M (LINK)
👨‍🍳️ Foodstreet raised $500K 👩 (LINK)

That's it! Thanks for reading. Feedback very welcome – even anonymously here.Refer a friend to CTV newsletter!Forwarded this email? Subscribe!