This Week in Australian Startups #77, 21st July 2024
My must read articles for the week and my thoughts;
Airwallex has become first major payments company to be granted an Australian Financial Services Licence for retail investment products - making Airwallex Yield now available to the broader retail market (Shannon Scott | The Australian)
$100M in under management from business customers already - at a $500K min that’s a max of 200 customers they’ve acquired in 8 months. Could be less with some customers investing more than $500K
Retail customers continue to be frustrated with big banks - we’ve got one of the worst oligopolies in our banking industries, and they continue to post world leading profits
Airwallex Yield offers daily returns of 3.67% on AUD and 3.95% on USD compared to 1.06% and 0.5% respectively by our big banks
Interesting that JPMorgan is in the mix, but not surprising - they’re making big movements in retail banking worldwide. I was in the UK when they launched Chase in September 2021 and it’s won best British bank for the second year in a row beating local neobanks like Monzo and Starling.
Apple Card the credit card launched by Apple is currently backed by Goldman Sachs but it’s reported Apple is preferring Chase to take over
A good way for them to test the Australian retail market - could we see Chase launch here soon? Or perhaps it’ll be a partnership with Airwallex instead - I’m all for it either way
‘Not good enough’: Blackbird admits its gender pledge has stalled (AFR)
We should all celebrate when any individual or company is keeping themselves accountable, especially when they release their internal data publicly. Let’s hope other VCs follow their example
Blackbird is committing to publishing data every FY on its gender breakdown of investment pipeline and management team
Blackbird is not happy that they haven’t met their own target of having at least 40% of pitches by startups to its investment committee have at least one female founder - instead this year so far they are tracking at 33%
While the top of funnel isn’t where they want it, the total share of investments made is making progress with 35% of funds ($34.9M) FY24 invested in founding teams with women compared to 18% ($44.7M) FY23 - that’s just under a 2x increase
Samar Mcheileh MD of VC Scale Investors was quoted “In a tight market, typically investors double down on what they know,” she said. “If your propensity to invest in women is already at dire levels – even if you reinvest everyone equally – it’s not going to change.”
I agree, below is what I wrote on this theme in last week’s update in my analysis of the Cut Through Quarterly Q2 2024 where it was revealed in the first six months of the year, all-male founding teams had 88% of the $2.3B invested
We must remind ourselves that VCs are investors, as are their LPs. The number one metric that really matters is the financial return on investment. Bias and discrimination certainly play a part in why minority groups receive less funding, particularly those with ‘common ideas’ - how can you expect a founder to have the same ‘resume’ a Caucasian male counterpart who has been afforded privileges that they have not? We all know this to be true, yet when it comes to investing money, especially when it’s not your own but that of your LPs the right thing to do is often investing where there is the least amount of risk and highest probability of success . In order to see greater investment in minority groups, we’ll need to see more specialist funds emerge who have the permission from their LPs to invest in specific groups - as we’ve seen with the Alice Anderson Fund leading the way in investments in female startups. We’ll need to see the more funds like these emerge for other minority groups.
Is this an opportunity not just for specialist stand-alone funds like the Alice Anderson Fund, but also specific allocations within the funds of major VCs to minority groups? Unlikely in the short term given these funds have already been raised with specific promises to LPs, but an opportunity for future funds
Top News
Alvan Aiau Yong, former Supply Lead for Airbnb in ANZ, has joined Hometime as COO (Dave Thompson)
Airwallex has become first major payments company to be granted an Australian Financial Services Licence for retail investment products - making Airwallex Yield now available to the broader retail market (Shannon Scott | The Australian)
The Queensland Investment Corporation (QIC) has launched a new initiative called 77 Venture Fellows to get more women into VC - starting with the mentorship of 10 women (InnovationAus)
Spenda has acquired Limepay, the white label BNPL platform, in a deal worth up to $8M (Startup Daily | BNA)
The Brisbane Economic Development Agency (BEDA) has announced the 11 startups to participate in its MedTech Global Accelerator Program for 2024 (BNA)
Zip Co raising up to $267 million to pay down debt (BNA | AFR)
Microsoft may have just become Canva’s most dangerous rival (AFR)
Grow Inc, the superannuation administration software provider, has kicked off a $70M Series D capital according the AFR (AFR)
Alphabet’s Wing is expanding its drone delivery to Melbourne’s east (AFR)
Elmo’s US owner K1 Investment Management tests buyer appetite (AFR)
Five V Capital has started a sale process for Penten, a provider of cyber and AI technologies for highly classified environments, said to be valued at over $400M (AFR)
‘Declined to comment’: three words destroying millions in VC brand equity by Jessy Wu (AFR)
‘Not good enough’: Blackbird admits its gender pledge has stalled (AFR)
EVP has raised $20M in just four days for its fifth fund, targeting a first close of $30-50M (AFR)
Treasury Wine Estates has invested $10M to create its first fully autonomous barrel hall increasing production capacity by up to 60% (The Australian)
EasyGo Solutions has posted more than $500M in profits in just three years (The Australian)
WA Life Sciences Innovation Hub Expands Services With $325K Investment from the WA State Government (Startup News)
DroneShield selloff continues (Capital Brief)
Real-time payment growth in Australia draws fintech interest (Capital Brief)
SunCable’s flagship AAPowerLink project receives major environmental approval (SunCable)
Funding Rounds
SeenCulture, a decision intelligence platform that empowers democratised decision making for recognising talent, has raised $1M from the InterValley Ventures, Techstars, M8 Ventures, Cut Through and LaunchVic along with notable Angel Investors (Startup Daily | The Age)
Go Locum, a platform that is digitising and democratising the locum industry, has raised a $350K Seed round from Paspalis (Phoebe Bardsley | Startup Daily | SmartCompany)
HammerTech, a safety intelligence software platform that improves worker safety and solves site efficiency challenges, has raised $105M (US $70M) from PE firm Riverwood Capital (SmartCompany | BNA | AFR)
ExoFlare, a unified threat management platform protecting farmers against biological threats, has raised a $5.3M Seed round led by Salus Ventures (Startup Daily | AFR)