May 1, 2022

CTV Funding News - April 2022

Welcome to the Cut Through update for May, where we slice and dice April startup funding. Enjoy!

Australian Funding Ecosystem

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Funding News & Analysis

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Good Morning,

Thank you to those who referred one or two of the 383 new subscribers to us in April, and welcome aboard, everyone!

We're launching a new newsletter that takes a deeper look at an early-stage startup each edition. If you know (or are) a founder of a great Seed-or-earlier stage startup who should be featured, please make the intro to me via this email.

Massive shout out to Sharon Lai for helping pull together this month's edition. And thank you to the amazing Earlywork team for connecting me to Sharon.

Ok, onward...

Forwarded this email? Subscribe here!Refer a FriendTaking a breather.

April's funding volume was the lowest since October last year.

It is fair to say that the slowdown wasn't unexpected, given the oh-so-many global headwinds in play, along with the global narrative of public market uncertainty driving private market confidence downward.

The headline figures above suggest that market softness has arrived, but it is also important to note that planning for most April deals began over the Christmas period -- a time of year not notorious for a ton of work getting done. An April deal count dip is expected regardless of the buoyancy of market conditions, and in this instance, it was deal count, not deal size, that dragged volume down.

The average deal size at most stages is holding up, for now. The consensus seems to be that this will change, but it's not showing in the data just yet.

Then again, we're in the non-consensus game! Let's see how May pans out.  

All deal stages saw fewer deals, with the exception of crowdfunding, which contributed more than usual to the total deal count. Total funding fell almost entirely due to a lack of "mega deals". There have been no $200+ deals just three times in the past ten months, and all those three months were the worst-performing months over the same period. Bottom line: Funding activity shouldn't be judged by the total funding figure alone.

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For the first time, Transport / Logistics / Supply Chain topped the funding volume rankings. League table aficionados will point out that Splend accounted for all but $5M of the total, and some portion of its $150M raise was actually debt.As per usual, Fintech, Crypto/Web3 and HealthTech were amongst the other hottest segments.

The three largest East Coast states accounted for more 93% of total capital invested, and 84% of closed deals.

As mentioned above, aside from Seed deals, the average deal size at each deal stage held up to 2021 levels. The average Seed deal was dragged slightly lower by a handful of sub-$2M Seed announcements. In the absence of reliable valuation data, these are the charts to keep an eye on over the coming months. Assuming the amount of equity traded at every round of fundraising stays relatively constant, the average deal size is a good indicator of how valuations are holding up. We'll dig deeper into this data in next month's edition.  

Quality over quantity ;)

Beyond stocks and bonds. Our friends at Birchal walked the walk, closing out their very own Birchal crowdfunding campaign in just a few hours. Reach Alternative Investments completed a Seed round to move closer to launching its platform, which will allow retail investors to invest in private equity funds without having to meet the mega-minimum cheque requirement. Ausbiz, the streaming service beloved by business wizzes, raised a Series A round to support its expansion plans and develop a new video platform.

Tasty and feeling fine. Roogenic, Bundlfresh, and Make-Out Meals all raised expansion capital from the crowd. Roogenic harnesses the power of Australian plant-based medicinal superfoods in its tea. Bundlfresh helps deliver the best of both worlds: shop local vendors, but with digital and delivery capabilities. Make-Out Meals has meal-kit-ified some of the favourite dishes from top Aussie restaurants. Chefprep, which takes it one step further with microwave-ready meals from top Australian chefs, raised a Seed round.

The Fresh Supply Co. raised its Series A to scale its supply chain digitisation platform, giving consumers, businesses, and lenders confidence in the authenticity of food goods. An all-star list of angel investors contributed to Alyte's Pre-Seed round to help nudge the social workout app beyond its current private beta stage.

Be better, banks. Consumer neobank aspirant turned smart corporate credit card and spend management platform Archa, raised a Pre-Series A round from a long list of well-known Aussie techies. Yondr, the anti-bank-as-a-value-proposition neobank, raised from the crowd. Digital bank guarantee startup Lygon banked an oversubscribed Series A from its prior bank backers and Aura Group. Less-terrible-tax-audits-as-a-service (LTTAAS) startup Auditcover announced it raised a Seed round.

They got big green energy. Edge Centers, a developer of solar-powered off-the-grid data centers, raised a Series A from a single strategic investor to expand into Malaysia. Vyro raised a Seed round to scale its online marketplace for electric vehicles, which aims to eliminate all excuses for us to continue driving gas guzzlers. Lord of the Trees, a drone startup that counts trees while planting seeds, raised a Pre-Seed to expand its global reforestation efforts.

Productive > busy. The personal productivity platform Llama Life raised a Pre-Seed round to help the world crush its to-do lists. Canopy Study raised a Seed to ease busywork for teachers. Canopy's AI automatically translates curriculum data into tests, quizzes, and flashcards. Capsifi, which digitally maps large organisations to reveal insights and help solve complex business problems, raised a growth round from the Fed Government-backed Australian Business Growth Fund. The AI-powered news aggregator Ukufu raised an Angel round to help us declutter our news feeds. And a high-profile angel investor group backed UrbanX, a startup transforming humble local real estate agents into digital marketing experts.

Unicorn hot streak ends.

April's big five deals were considerably smaller than what we've come to expect each month. The five-month hot streak of new unicorns also ended in April, with no new unicorns receiving wings or horns this month.

Vehicle subscription startup Splend raised $150M in combined debt and equity. Once the debt-to-equity split is confirmed, CTV's numbers will adjust. Splend leases cars to Uber drivers, and aims to use part of the capital to go green by offering electric and hybrid vehicles. The debt piece was led by London-based Pollen Street Capital, while Australia's Acorn Capital, a previous investor, returned for another equity bite.

Tiger Global and DST Global Partners pledged an additional $50 million to online trading platform Stake's previously announced $40 million Series A raise. CTV is not one for labels, but we're unsure about the 'round extension' tag, given the original investment announcement from Tiger and DST occurred a year ago. The funding will support the further expansion of Stake's 135-person team. According to Stake, the company has accelerated its growth from last year, which is impressive considering the macro environment. NASDAQ-listed comparable Robinhood's market capitalisation has fallen 85% since its Q3 IPO.

Local VC Exto Partners led a group of global investors in backing Zetaris' expansion plans into the US. The analytical data visualisation platform's secret sauce is that data analysis is decentralised, eliminating the need for a centralised data warehouse; reducing costs and the risk of errors. The global investors included Central Intelligence Agency backed In-Q-Tel, providing a wink of confidence on the security front.

Melbourne-based "hype commerce" startup EQL helps retailers avoid site crashes and payment chaos during product launches. EQL raised money from some big-name investors to expand their global sales and customer teams. The round was led by Insight Partners and Airtree Ventures, with Harry Stebbling's 20VC fund taking part too. Hype-worthy angels, Cloud Guru co-founder Sam Kroonenburg, and 76ers owner Michael Rubin also piled in.

Vitruvian, a connected fitness device founded by ex-high-frequency trader Jon Gregory, lets customers weight train, perform PT sessions, and take gym classes from the comfort of their living rooms. Following its $20M Series A and with a need for speed, Vitruvian has plans to double down on hiring as it gears up for US expansion. Several Australian investors jumped on the Vitruvian squat rack, including Larsen Ventures and TEN13.  

Female Founders

The percentage of deals involving at least one female founder in the past three months continued to edge higher than the longer-term trend. Deals involving female-only founder teams are also tracking higher than historical levels. Later stage funding to female founders is tracking behind the long term trend level, albeit this is on a relatively small set of deals.

The Funders

Excluding crowdfunding participants, 75 unique investors were reported in April. Airtree (Reputation DAO, EQL), Investible (Directo, Consultmed), Artesian (Chefprep, Fresh Supply Co.) and Antler (Vyro, Reach Alternative Investments) each announced two deals, but it was crowdfunder Birchal who led the pack with six successful campaigns (Birchal, Roogenic, Make-Out Meals, Yondr, Erin, Pokit).

We now feature a running list of newly launched startup investment vehicles. Like our funding data, this list comes from publicly available information plus details submitted straight to us by funds. Submit your newly launched vehicles via email.

05/22 - Rampersand Seed - $40M

04/22 - Side Stage VC Early - $10M

03/22 - Carthona W3, FT, SW - $100M

03/22 - Atlassian Global CVC top up - $147M

03/22 - Access Capital Emerging Tech - $10M

03/22 - Firemark Early - $75M

02/22 - King River Web3 - $50M

02/22 - Firemark Early - $75M

01/22 - Airtree Seed - $200M

01/22 - Airtree Web3- $50M

01/22 - Airtree Growth - $450M

01/22 - Aussie Angels Syndicate Platform

That's it. See you next month.– Chris & Sharon

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