This Week in Australian Startups - 25th January, 2023
This Week in Australian Startups - 25th January, 2023
A longer break than I had planned with this being the first edition for 2023, a bit more content than usual as I’ve gone through and curated the top news for the month of January. But first, here’s some good summaries for 2022:
The 10 biggest Aussie startup raises of 2022, from BNPL titans to NFT gaming leaders
Index Ventures: 2022's Biggest Surprises, Our Holiday Reading List, and What We’re Watching in the New Year
2022: the year for real change by Tech Council of Australia
Alright - we’ve had a lot of layoffs. Unfortunately there will be more to come throughout the year. I saw the below graphic showing big tech layoffs in proportion to headcount growth during the pandemic, as percentages;
Microsoft - 12.9%
Google/Alphabet - 17.6%
Salesforce - 22.7%
Amazon - 2.4%
Meta/Facebook - 25.9%
Spotify - 10.9%
The spotlight will always be on big tech, however these layoffs are certainly not isolated to the major leagues. I’m noticing a clearer trend with companies Series B+ being most affected, these companies were more likely to have raised on bloated valuations hiring on expected growth and revenue which is not being realised. Companies at Seed or Series A, are more likely to be safer bets still either finding product market fit or hitting the $1/5/10M ARR milestones before looking at scaling revenue and headcount.
My gut instinct tells me we will see more acquisitions of startups by other startups rather than big tech. This also opens up the door for more alternative funding/acquisition models - I can’t help to think it could be a great year to be in Private Equity. Here you have a sea of startups who have been some combination of operating poorly, high burn rates, poor customer retention, no ‘moat’ - a PE firm can come in and do what they do best, fix it and sell for a profit. For many founders and boards this may start to look like a great option to exit in the current market.
Whilst tech seems to be scrambling, and even big tech not providing job security anymore there is some good news. Mercedes-Benz announced the largest bonus ever paid to employees in the history of the company, in addition to all regular bonuses paid. Perhaps the tides are starting to turn with traditional companies starting to take better care of their employees than tech companies (detailed write up here) - perhaps the tortoise is starting to make a comeback.
After closing their most profitable year in 2022, Microsoft laid off 10,000 employees and moments later committed to investing billions (yes, plural) in OpenAI - certainly not the best optics, but it does show the importance of AI and how this race is getting started.
Not as recently, but Apple also moved very quickly to add support for stable diffusion - this excites me more than ChatGPT (maybe because I’m tired of hearing about it). Compute costs for AI are still very high, OpenAI is doing well because they are more or less getting free infrastructure from Microsoft as part of the very weird investment. Apple’s support for stable diffusion means developers can now leverage the iPhone and run compute on the users local device reducing costs and barriers to entry significantly.
Top News
Three law firms join forces for mega privacy case against Medibank, more here
Cicada Innovations revives Rachel Slattery’s pioneering deep tech conference Tech23, more here
Meat subscription startup chows down on database of failed grocery delivery service Voly, more here
Square Peg value jumps despite tech correction, more here
The third-party apps Twitter just killed made the site what it is today, more here
10 things the law firm behind investment deals for Atlassian, Mr Yum & Linktree thinks will happen in VC this year, more here
Apple is reportedly working on MacBooks with touchscreens, more here
Start-ups turn to crowdfunding in record numbers as VC dries up, more here
Reed Hastings is stepping down as Netflix’s co-CEO, more here
Stripe’s internal valuation gets cut to $63 billion, more here
Blackbird and Airtree reveal six VC funding insights for 2023, more here
Sequoia Capital’s Alfred Lin in his first public interview since the implosion of FTX, more here
WiseTech’s billionaire founder, Richard White, snaps up regtech venture Kyckr, more here
The NSW government is tipping $40 million into bioscience startups, more here
Microsoft reportedly plans to invest $10 billion in creator of buzzy A.I. tool ChatGPT, more here
NSW launches $7 million quantum computing commercialisation fund, more here
Techstars to make Tech Central Sydney home after govt subsidy, more here
Swyftx quietly announced the closure of its Earn product while everyone was on Christmas break, more here
‘Stupid’ investment era over, ‘boring’ is back: Aussie VCs, more here
Meta’s Ad Practices Ruled Illegal Under E.U. Law, more here
ASX200 boards woefully ill-prepared for tech’s next wave, more here
UK retains fintech dominance despite global investment drop, more here
UK tech in 2022: The highs, lows, and what’s next, more here
Australian Funding Rounds
Payments fintech Alii hits $10 million valuation with $2.5m pre-Series A raise, more here
Dom Pym and Envato founders back climate investment fintech Bloom in $525,000 Seed round, more here
‘My Health Record for pets’ startup Vedi scores $3 million treat to go global, more here
‘No tumour will go undetected’: Ferronova lands $11 million for its cancer hunting nanotechnology, more here
Perth mining and consctruction startup GeoMoby raises $3 million to keep workers safe, more here
Telstra Ventures backs renewables software startup OpenSolar in $22 million series B, more here
Top VCs back pregnant founder’s angel investing platform Aussie Angels with $1.4m, more here
Bill Gates, Twiggy Forrest back livestock emissions reduction startup Rumin8 in $17 million Seed top up, more here
Australian-founded communications startup Loose Cannon Systems raises $12 million in Series A, more here
Advanced manufacturing startup Bodd raises $5 million, more here
International Highlights
DeepL, the AI-based language translator, raises over $100M at a $1B+ valuation, more here
Inflow, a platform for managing ADHD through cognitive behavioral therapy, raises $11M, more here
Strava acquires Fatmap, a 3D mapping platform for the great outdoors, more here
Japan’s Terra Drone gets $14M lift from Saudi investors, more here
SoundHound, the voice AI company, raises $25M after laying off 40% of staff earlier this month, more here
Scaleup Finance raises record Danish $8M seed round, more here
Steven Bartlett launches £81m fund to back blockchain, biotech, space startups, more here
PASQAL lands €100m after ‘world-first’ real-life use, more here
Events
[Adelaide] Southstart, 9-11 March
[Melbourne] From Side Hustle to Seed Round, 1 February