Aussie Startups Pulse Check - March 2024 💓

Welcome to the first edition of Pulse Check! 🎉 

In case you’re new here…Pulse Check is an initiative of Overnight Success (OS), powered by an amazing team of volunteer writers (“correspondents”) who have each contributed their own insights to bring you a comprehensive overview of what’s happening in all corners of the Aussie ecosystem.

Get to know each of our correspondents by clicking on their name at the top of each section! Throw them a ‘Follow’ on LinkedIn while you’re there 😉 .

Whether you are a long-time OS supporter or new to our community, we hope this newsletter will serve as a valuable monthly resource to help you keep your finger on the pulse of the ecosystem.

In case you’re new here, you can get a weekly download of startup news from our OG newsletter 👇️ 

From Oz to everywhere

• Marqo, the AI vector search platform (consider it a tool that helps computers understand and organise information), closed their Series A funding round of $19.4M (led by SF-based Lightspeed). The more impressive piece is this raise comes 6 months after their $8.1M Seed round. The company plans to move their headquarters to (you guessed it), the US.

• FirstWave Cloud Technology, a company that makes cybersecurity and network management software, received $2.5M in funding from Formue Nord A/S (Formue Nord), a Danish asset management firm. They're planning to use this money to keep growing in North and Latin America, which is an exciting signal after they acquired Saisei Networks in 2023.

The 2023 state of play

• Is a 123 page report on startups worth reading? ABSOLUTELY. Cut Through Venture and Folklore Ventures partnered up for “The State of Australian Startup Funding Report”. The behemoth of knowledge provides insights into the challenging past year of fundraising + emerging trends. Two interesting pieces of data:

• 42% of 2023 deals included at least one international investor in the round.

• 70% of local Australian investors expect overseas startup investors to increase activity over the next 12 months.

• My take - we’ll see more capital from international investors and more Aussie startups expand globally at an increasingly rapid pace - with possibly the loss of startup headquarters and talent.

To get in touch with Lea Rausch, send her a message on LinkedIn.

Exciting times for climate tech entrepreneurs

TRaCE and Virescent Ventures’ groundbreaking $1.6M investment in UNSW’s The Climate 10x program is the largest of its kind in Australian history and comes as climate tech ranks among 2023's top 5 funded sectors.

Blair Pritchard of Virescent Ventures spoke to the sector's vital role in addressing long-term problems, particularly leveraging AI to overcome regulatory barriers: “Grappling with climate change is a global, multi-decadal, multi-industry problem,” he told me.

“Companies that are solving it are in a sector that’s going to be growing at rates faster than economy-wide GDP for the next three to five decades. It’s also clear we’re going to need a lot of new technology than just wind turbines and solar panels. So we’ll see the emergence of new high-tech businesses that have a lot of proprietary tech and can sustain good margins”

Women founders are getting more VC deals, but no more money

According to the “State of Australian Startup Funding Report”, female founding teams have a median check size of $700K, compared to $1M for mixed-gender and all-male teams. I researched why:

• There’s a direct correlation between firms with a female VC partner and the number of investments into female-led startups.

• Venture investor Del Johnson says “male power brokers [are] more likely to select or fund the women VCs who share their own patriarchal biases, and keep out the many women who don’t share those views.”

• Serial entrepreneur Gentry Lane suggested that VCs’s enduring focus on presentations and pitch decks rather than “normal, human conversation” continues to negatively impact underrepresented founders.

To get in touch with Leila Oliveira, send her a message on LinkedIn.

A new community supporting Aussie tech & innovation

Last week, alongside my Co-Lead, Claire Bull, I launched Tech Australia Advocates (TAA). The Australian chapter of an international community of 30k+ members.

The Australian Government has set a target of 1.2 million technology-related jobs by 2030. This is a huge sector of our economy that needs a voice and representation nationally, this is why TAA exists.

TAA will also leverage relationships with the other 34 groups in the network to help uplift the Australian ecosystem internationally.

Join as an advocate for free here.

An Innovation Blueprint for NSW

The NSW Government is reviewing how to best support innovating businesses and is seeking the help of the ecosystem to build out this blueprint.

This comes after a big year of cuts to both personnel within the department and funding programs for startups. Let’s hope consulting key ecosystem stakeholders makes for more stability in their future strategy.

Submissions are open up until 25 March here.

New grants for Victorian startups

LaunchVic, Victoria’s Startup Agency has two juicy new grants for VIC based startups.

The MedTech Market Growth Program will provide $50k matched funding to up to 20 MedTech businesses.

Early stage AgTech Startups can also tap into $50k funding after a grant launch in partnership with Agriculture Victoria.

To get in touch with Dickie Currer, send him a message on LinkedIn.

Queensland accelerators win investment boost

Five accelerators have received initial funding from the Queensland Government’s new Venture Capital Development Fund (VCDF) as part of government plans to grow a VC pipeline of investment-ready startups:

• 🚜 Farmers2Founders

• 🏥 LuminaX

• 🌿 EnergyLab

• 💻 UQ Ventures Momentum Accelerator

• 🤖 77 Venture Challenge

What’s in it for Queensland’s ecosystem?

• These accelerators’ programs were chosen to boost investment in Queensland’s priority industries.

• The VCDF will support over 160 early-stage Queensland startups, including regional founders.

AI Sprint - unlocking Australia’s AI potential

AI Sprint is a new competition from the CSIRO’s National AI Centre, Stone & Chalk, and Google Cloud. The three-month program will challenge innovators to develop AI solutions for national issues. Applications close on 21 March 2024.

Northern Territory Business Innovation Program Winners

The Northern Territory’s Business Innovation Program (BIP) is part of the Territory Government’s mission to develop a $4 billion ecosystem. The winners of BIP’s latest round are:

• 🚧 Civiltech Solutions

• 🏥 Go Locum

• 🎬 CastAway NT

• 🍺 One Mile Brewery

Applications for the next BIP round close 30 April 2024.

Did you know?

The Northern Territory is a strategic location for defence innovation. Darwin hosts:

• Australia’s first military spatial virtual twin, which is used for defence activities and infrastructure optimisation.

• Australia’s only Test Lab for Defence and Aerospace Industry 4.0, which helps manufacturers transition to Industry 4.0.

To get in touch with Berenice Chong, send her a message on LinkedIn.

The big trend

With the recent release of the “State of Australian Startup Funding Report”, it was revealed that overall startup funding fell by a staggering 54% in 2023 compared with 2022 (but a 12.9% increase over 2020). Amidst a painful crunch that has seen 80% of investment sectors log a fall in total funding last year, climate and clean tech was the top sector for the first time ever by new deal count at 9.9% (41 of 413 deals), beating out stalwarts fintech and healthtech with shares of 9.7% and 9.2% respectively.

This data reveals the growing number of climate and nature tech startups being founded and their growing importance to accelerators, angels, and VCs. Mirroring this trend, Startmate recently revealed that 24% of their investments since 2020, and 32% in 2023, have been in climate and nature tech startups.

An overnight success?

The accelerating founding and funding of climate and nature tech startups relative to peer sectors is not an overnight occurrence and has been gradually building for years. Startmate’s own climate tech investments only began to rocket after former Startmate CEO James Tynan (and current partner at Square Peg) announced the launch of the Startmate Climate Cohort in late 2019.

To get in touch with Andrew Harding, send him a message on LinkedIn.

What’s the latest news?

• Google Deepmind releases Gemma, an open source model based on Gemini. Also launching Gemini for Google Workspace. Gemini for Workspace includes a new standalone experience to chat with Gemini, with enterprise-grade data protections. 

• NVIDIA builds powerful computer chips called GPU’s, the supercharged engines that drive many AI advancements. NVIDIA recorded the largest ever 1 day gain in Wall Street’s history, adding $277 Billion in market value (16.4% increase) last week. 

• Stability AI announced Stable Diffusion 3, text-to-image model. Text-to-image models let you generate amazing visuals simply by describing what you want to see. 

• Bitcoin’s recent rally took it to the Top 10 Assets in the World. Prices are rising with increased investor confidence in the technology, assisted by investment inflows, including the new Bitcoin ETF. 

• In late February, Ethereum’s price hit $3000 again. The market is anticipating approval of Ethereum ETFs and Ethereum’s Dencun upgrade, expected to lower gas fees and improve scalability. 

How does this impact the ecosystem?

• New AI technologies are inspiring new features and ideas for disruptive startups. Coupled with this, we are continually hearing VCs asking how their PortCo’s can adopt this technology.

• The growth in Web3 demonstrates investor confidence and the surge of retail investors adopting ETFs. This signals wider acceptance of cutting-edge and more understanding for Web3 startups.

To get in touch with Erin Howell, send her a message on LinkedIn.

2023 was the year that managing risk became sexy. In 2024, these are two of the rising stars to watch in compliance. 

Haast

• Canberra-based martech Haast use AI to tackle digital marketing and brand compliance. It’s goal is to be as mission critical to any marketing, compliance and legal team as Outlook or Slack.

• In 2024, they are launching the first AI-driven end-to-end marketing review and compliance platform, which is timely - experts predict that over 90% of online content will be AI-generated by next year.

• They are looking to grow in highly-regulated industries like insurance, superannuation and banking “with a focus on tackling issues like greenwashing and misleading conduct”, says founder Kunal Vankadara.

FairSupply

• Sydney-based ESG compliance startup Fair Supply was co-founded by a former human rights lawyer and a distinguished supply chain academic. They use data from across billions of supply chains to show companies their risk across modern slavery, carbon emissions and biodiversity.

• Their latest offering, scope 1, 2 and 3 emissions reporting, will be critical for big business and financial institutions. They will be an important player this year, with ASIC’s mandatory climate-related financial disclosure obligations to be introduced from July.

To get in touch with Mia Sturt, send her a message on LinkedIn.

Wait, what is AgriTech? 

AgriTech is the collection of technologies that provide the agricultural industry with the tools, data and knowledge to make more informed, timely on-farm decisions and improve productivity and sustainability.

With the global population set to reach 8.5 billion by 2030, many see tech-enabled agriculture as the key to feeding our growing population amid the depletion of natural resources. 

It’s the buzzy, high-growth industry that could actually save us all.  

Startup Spotlight: Jane’s Weather 📺

When meteorologist and Channel 7 Weather presenter Jane Bunn does speaking engagements, the number one question people ask is, “What weather app do you use?” 

And when she found there wasn’t a single one she could credibly recommend, the TV personality turned founder teamed up with software engineer David Hemming to launch Jane’s Weather, a one-stop shop for hyper-local weather forecasting for the agriculture sector.

Ecosystem Muster 🤠

• The good folk at AusAgritech run a 1200+ strong Slack group sharing national opportunities and events for farmers and founders alike. Join here. 

• LaunchVic are offering investment support for Vic Ag founders through the Hugh Victor McKay Fund.

• The Feds have announced two $54 million grant rounds to grow the sector. 

• And SVG Thrive offers a range of national programs for founders at every stage of the journey.

To get in touch with Holly Clark, send her a message on LinkedIn.

Revolutionising Women’s Entrepreneurship: Is This the Most Crucial Report Yet?

Every time we talk about why women get so little funding, the same question pops up: why are things the way they are? While there's been plenty of research showing the numbers and initiatives like Funding the Balance exist to shine consistent light on it, A new report by The Women's Entrepreneurship Industry Reference Group commissioned by Investment NSW presents for the first time a deep dive into the real story behind women's entrepreneurship with comprehensive suggestions for change.

The Women's Entrepreneurship Industry Reference Group, with Nicola Hazell at the helm and backed by Investment NSW, has just dropped a game-changing report. It's not just about the numbers; it's about getting to the heart of what's holding women back in business and innovation in New South Wales. The report looks at the big picture – the whole system, with an emphasis on changing the system, rather than changing the women.

This report isn't just a call to action; it's a roadmap for the government and the startup ecosystem as a whole. It makes a strong case for the Government and the ecosystem to step up and be leaders championing businesses and ideas led by women. By tackling issues at the root level, the report outlines how we can unleash the true potential of women entrepreneurs, making our economy prosperous, more sustainable, socially-conscious and forward-thinking.

To get in touch with Preethi Mohan or Kirstin Hunter, send them a message on LinkedIn.

Last month, Geelong-based founder and angel investor Leela Cosgrove created some heated conversation by sharing her reasons for not seeking VC funding and questioning the VC institution in general. 

Whether you agree with her perspective or not, there are undoubtedly lessons to be learnt from those who bootstrap their way to success. This is what I’ll be exploring each month in Pulse Check.

But first, let's tackle some common bootstrapping misconceptions…

1.   It’s for founders unable to raise: Many bootstrappers are uninterested in raising until they can demand more favourable terms. Finder did this in 2021, raising $30M after 15 years of bootstrapping.

2.   It’s only for unambitious founders: Mailchimp was founded in 2001 and was built using co-founders Ben and Dan’s own savings. They generated over $700M USD in revenue before being acquired for $12B in 2021. On home turf, a regional maths teacher recently bootstrapped and sold his edtech business for $40M.

3.   Bootstrappers struggle more: Some glorify the ‘started out in a garage’ origin stories bootstrapped startups… but there is no denying that restricted cash flow can lead to personal stress. However, these financial restraints can force founders to be laser-focused on product market fit and sustainable growth.

I am obsessed with meeting the best and brightest bootstrappers in Australia - if you are one, or you know one, get in touch!

To get in touch with Georgina Healy, send her a message on LinkedIn.

Is it possible to achieve more by doing less?

Ah, the age old question that lives rent free in every founder’s mind. As someone who’s used systems to increase my productivity and creativity, decrease stress, and achieve more, I believe the answer is yes.

Author Ryan Holiday describes a system as using templates, workflows, processes and rules as a means of “doing more by doing less”. They’re effective because they help us to prioritise energy, tasks and time. 

Anything that’s repetitive can be systemised:

• If it’s a repeatable task, you can build a workflow for managing it.

• If it’s a repeatable opportunity, you can build a process for vetting it.

• If it’s a repeatable decision, you can build a framework for making it.

• If it operates on a regular cadence, you can build a schedule for running it.

If you want to build a personal operating system, give these questions a go: 

• What actions or tasks do I do every day, week, and month? 

• Is there a template I could create to help optimise each one?

• Is there a system I could create to help make them more efficient? 

• Is there a rule I could implement to help manage my time or energy?

Read on to learn how I’ve used systems to increase my productivity and creativity, decrease stress, and achieve more overall.

To get in touch with Anna Mackenzie, send her a message on LinkedIn.

March Munchies 

The entertainment industry has always struggled to prepare for disruption (Talkies, VHS, DVD, Streaming etc), and when faced with a technological shift tend to meet it with fear rather than viewing it as an opportunity.  Unfortunately we’re seeing this again with AI.

In March, Tyler Perry paused his 800 million studio build after being blown away by how developed Sora is.  "There's got to be some sort of regulations in order to protect us,” he said. ‘Jobs are going to be lost’.

The entertainment industry needs to build deeper connections with startups who are the ones creating the future. It needs to start investing and be part of the future, not fight it.

Around the Grounds

• Tradable Bits has secured a substantial expansion of its long-standing relationship with the AFL. 

• Australian Music Festivals are in Crisis - SMH 

• Beond (AIRLINE) will be the first to offer an ’Immersive Inflight Entertainment Experience’ with Apple Vision from July.

March MVP 

Sunflower AI

• Sunflower are making events more accessible with live captions.  I can see use cases across entertainment.  Trivia, comedy, live music, conferences, festivals, live sport and so much more.  Really excited to see how Chuhoa and the team continue to develop the product. 

To get in touch with Gav Parry, send him a message on LinkedIn.

If you have feedback on what you liked and didn’t like about this first edition of Pulse Check, we’d love to hear from you! Just reply to this email 😃 .

‘Til next time,

The Pulse Check Team 💗