Welcome to the August edition of Cut Through Venture.
A special welcome to the 367 new subscribers who joined in July. Thanks to those who referred them, and to those who shared 1H in Review titbits across the web.
It's still tough for companies to get funded. A key objective for launching Cut Through Venture was to increase venture funding transparency, with the blue-sky goal of making funding accessible to anybody building a great company. Toward's the end of today's newsletter, there are two early-stage fundraising startups eager to connect investors.
From now on, this newsletter will focus purely on reporting on deals. I'll feature fundraising startups in a dedicated forum – investors interested in being part of this can opt-in here.
August asks: 1) Invite two industry pals to Cut Through Venture here. 2) Many funds now submit their funded deals so I don't miss them. You can, too, via this form or this spreadsheet. 3) Be an early CTV Twitter follower.
Meet our newest unicorn: "July"
Local venture funding topped $1B for the first time in July. Deal count and average deal size also hit record highs. More funding flowed into startups in July than all Q1 combined, and dollars raised in July dwarfed the prior monthly record by almost 70%. You get it: good month.
The top 20% of deals accounted for 83% of total deal volume. Six startups raised $50M or more, 20 raised more than $10M, and 30 raised more than $5M. The crowdfunding platforms were responsible for most of the sub-million-dollar rounds. July crowdfunding was the strongest it's been all year, generating almost half of 1H21's volume.
B2B software services and Media/Collaboration/Gaming dominated from a dollars-funded perspective, receiving 62% of total funding. These segments generated almost 6x the average round size of the other segments. Healthcare stood out, too, leading the charge in terms of VC-funded deals. Consumer products dominated the crowd-powered deals.
Go1's unicorn-birthing mega-round put Queensland on top of the funding table for the first time this year. NSW remained dominant from a deal count perspective, accounting for just under half of funded deals. The three largest East Coast states accounted for 96% of total funding reported.
Later-rounds had their busiest month of 2021 so far, accounting for 67% of total deal volume. Seed through Series-B deal volume was in line with Q2. Only one Angel/Pre-Seed round was announced. The major local accelerators are between intakes, so it was quiet there too.
14 Covid-era founded startups raised capital, but funded startups skewed more mature than usual. 75% of funding flowed to startups older than five years, and almost 18% flowed to companies older than ten years.
Here’s the monthly reminder that most founders begin bootstrapped or backed by supportive friends and family. The average Seed raising startup was just shy of 2 years old. The average Series-A or B funded startup was 5 years old.
64 deals for $1.14Billion!
Seeding the great Australian dream. TechLend raised a Seed round to help you buy a home now and sell your other home later (BHNSHL?). They also raised a juicy venture debt round to support the capital-intensive business of bridging loans for property purchases. OwnHome also raised a Seed round to allow aspiring homeowners to rent their way into homeownership. Several rent-to-buy players have found wild success in the US, and I think it's a terrific model. Aussie stamp duty, a transaction cost not faced in the US, is a challenge for Own Home to navigate.
Finspo, which combines a digital mortgage broker with an always-on mortgage optimization tool, also raised a Seed round, as did WLTH, which may well be the sexiest looking home loan brand I've seen. Just take my money.
Health is the real wealth. The Tinder founders and NRL hero Billy Slater invested in mens hair loss, erectile dysfunction, and skincare brand Mosh. How's that for synergies?! Meanwhile, telehealth and marketing gurus Eucalyptus raised capital from top US venture firm New View, along with some of Australia's best-known funds. Mindset raised a Seed round to further develop their hypnotherapy app that purports to solve everything from irritable bowel syndrome to menstrual hot flashes. Wimp2Warrior, a mixed-martial-art startup that claims to do what its name describes, raised a brawny-sized round from a set of high-profile Aussie businessmen and family offices.
And, trumping the field on the "things that matter" scale, Amaroq and Currus Biologics raised sizable rounds to support their work of battling cancer, and Kahu raised to continue the development of its AI tech for detecting skin cancers.
And, on the healthy food front… Harvest B raised a Seed round to build out its smart ingredient system to support food brands roll out new plant-based culinary experiences. A few cows must have done something to upset the founders of both Eden Brew and Change Foods. Both are on a mission to disintermediate cows from dairy – and they raised Seeds rounds to help them do so. Australian Honey Ventures, which counts the Honey Badger as an investor, raised from the crowd to support its efforts to help Aussie beekeepers participate in global trade. Food-as-medicine upstart, Medikane, was also a crowdfunding favourite. Top local investors jumped behind Lyka to ensure that even your pooch can eat fresh.
Three others to keep an eye on. FL0 raised a Seed round to power what it's pitching as Canva for engineers. FL0 joins a raft of no-code tools that allows just about anyone to deploy APIs, app integrations, and microservices. No-code/low-code is a competitive but piping hot space – and it's the type of tech that makes gathering data for Cut Through Venture possible… so I'm right behind the FL0 team! Eden Towers aspires to put a farm in the building door, and it crowdfunded its vertical farming technology to help it on its way. Meanwhile, Virtually Human raised a sizable round led by a16z for its ZED Run platform that allows punters to buy, sell, train, and bet on virtual racehorses. Before you smirk, check out the prices these Tamagotchi-horses are fetching.
The Big 5: Make work work better, and if not, escape to space
I jumped the gun on Go1's reported $70M raise last month. Turn's out they weren't messing around. The $273M Softbank led round is the largest venture investment round into an Australian startup ever – and it catapulted Go1 safely into the unicorn zone. Employment Hero, Culture Amp and Skedulo all raised $100M+ rounds too, and much like Go1, they're laser-focused on making our work life better:
- Go1 upskills us
- Employment Hero automates HR and pay
- Culture Amp fuels employee engagement
- Skedulo makes mobile work possible.
If that doesn't work, there's always space. Brother Adam and James Gilmour founded Gilmour Space in 2013 to send small satellites into space more safely and affordably. The $61M round is the largest raised by an Australian space company and featured a mix of top-tier global and local VC's, along with some of the largest Aussie super funds.
It's worth giving a shout out to ROKT, who also now frollicks in the unicorn paddock. The increase in valuation was via a secondary sale of shares, and so the transaction is not included in this month's figures.
Just under a quarter of the funded startups had at least one female founder. The average deal size amongst female-founded startups was a third of that received all-male founding teams, resulting in 9.8% of total funding flowed to diverse founding teams. Two-person founding teams led the charge in terms of total deal funded.
Excluding crowdfunding participants, more than 155 unique investors reported being part of July’s venture funding activity.
The most active investors were locals Blackbird (Culture Amp, Eucalyptus, FL0, Gilmour Space), Salesforce Ventures (Culture Amp, Employment Hero, Go1), Airtree (Employment Hero, Eucalyptus, Go1), Perennial (Equiem, Indebted), Skip Capital (Culture Amp, FL0), Global Founders Capital (Culture Amp, Ofload, OwnHome), Regis (Equiem, Hay), W23 (Eucalyptus, Harvest B), Jelix (FL0, How Too), CP Ventures (Four 2, MGA Thermal), Ice House (Spalk, Toku Eyes), Seek (Employment Hero, Go1), and Index Ventures (Culture Amp, Okendo).
Soft Bank (Go1, Skedulo) led the charge for the global funds – and global VC powerhouses Tiger Global, YCombinator, Sapphire Ventures and Plug & Play all placed single Aussie bets.
Fundraising startups who want to connect.
These founders submitted their startups to Cut Through Venture and are included here because of the interesting problems they're solving.
The information below is not verified and is not financial or investing advice. I'm not soliciting or accepting any investments on behalf of these companies or financially incentivized to connect them with investors. I'm just a matchmaker. To continue hearing about fundraising startups, opt-in here.
Parpera is Australia's first smart business account and debit card to help you to receive money quickly, manage your cash flow, taxes and accounting, and access support - all in one app!
Founders: Daniel Cannizzaro, Nathan Liu, David Olsen, Ahijith Chandra
Description: Parpera is a fast-growing community-backed and owned Australian fintech that aspires to improve the economic prosperity of people, communities, and societies, globally. Parpera's building a fair and transparent ecosystem of products and services to help people set up, manage, and grow their business.
Initially, Parpera will provide sole traders, freelancers, founders, and gig-workers with digital wallet, card, invoicing, payments, and money management capabilities to help improve the way they do business in today's digital economy.
Raise info: Raising $3,000,000. Some investors already locked in.Connect with Parpera
Clinials is an advanced Clinical Trial recruitment platform seeking to help Pharmaceutical companies bring medicines to market sooner.
Founders: Maree Beare, Steve Edge, Thomas Webber
Segment: B2B Software / Health
Description: 80% of clinical trials are delayed or closed because of problems with recruitment. This leads to lost potential revenue to pharmaceutical companies up to $8M each day a trial delays a product's development and launch. The Clinials clinical trial participant recruitment platform uses a unique targeted algorithm to help pharmaceutical companies find the right people for their trials.
Raise info: Raising $300,000. Investor discussions are underway.
That's it. Have a great rest of your week.– Chris