This Week in Australian Startups - Issue #22, 24th May 2023
The Australian government is going ahead with an overhaul of privacy laws, and surprise and surprise Meta is shouting the loudest at some the proposed changes.
This isn’t anything new for Meta or big tech with more stringent privacy regulations in the EU in particular. In fact they were just fined a record $1.3 billion over EU user data transfers to the US.
On the surface it seems privacy regulations like this are really there to protect consumers and fight back against big bad tech. For services like Meta/Facebook personalisation are an inherit part of its product, and it’s not really possible to provide their service without personalisation. Meta uses an algorithm to serve posts across Facebook and Meta, and they decide which post is an organic or paid placement, not the advertiser. Advertisers don’t have access to the personal data of users, but can segment broadly through advertising.
Whilst Meta has made comments around potentially pulling products from markets like the EU, the reality is it’s extremely unlikely given how much revenue they make - 1/5 of Meta’s total revenue (~$23.3B) is from the EU.
More often than not we see things repeat themselves, in some ways that’s exactly what’s happening now. In the last 100 years we’ve seen regulation accelerate towards a more open and free market encouraging global economic trade through reducing barriers for businesses to operate.
GDPR was probably the first significant step, but we’re seeing things come full circle, with more countries taking back control and implementing their own stricter rules and regulations - particularly with privacy.
This poses a fundamental shift in the way businesses, in particular tech companies operate. One of the biggest benefits of technology is the concept of zero marginal cost, when in many industries the biggest challenge was distribution, the internet has removed that entire barrier.
You build one platform for everyone, anywhere in the world - it’s most efficient to build for scale. Even with changing regulations, like cookie banners, despite GDPR not applying in every country it was easier for every business to just implement the same rule everywhere rather than have different rules for different countries.
Things are continuing to change and we’re seeing the slow degradation of scalability which will change the way we access technology. Google has already taken the decision to deny access to Bard in the EU amid privacy concerns - one product for them, and another for us.
In recent earnings Apple, Microsoft and Google all make mention of these changing regulatory environments and how this may create issues down the road. Personally, I’m all for consumer privacy but there does need to be a realistic view on what is and isn’t reasonable.
Countries with strict privacy regulations that create so much friction and barrier to innovation, will become less favourable destination for tech companies. It’s going to be more expensive to comply with narrower, stricter regulations for each individual market for smaller companies. Whilst companies like Meta are making the most noise, they will in the long run benefit most as they have the cash to lobby, and ultimately comply with most regulations. It will create a bigger moat around their businesses with a much higher barrier and cost for competition.
Technology companies focus on iteration and finding true product market fit, scale and then go into the tougher more regulated markets. For countries that don’t make it attractive for startups to simply do business will lose out, and we are more likely to see different versions or restricted access to technology in heavily regulated markets - and for startups perhaps no presence at all until they can justify the cost of entry.
AI valuations are staggering, says Australian tech entrepreneur (AFR)
Aussie enviro-tech startup Samsara Eco teams up with Lululemon to create infinitely recyclable textiles (SmartCompany)
Australian stock exchange says software overhaul won't involve blockchain (Reuters)
Tyro’s second takeover approach tumbles at eleventh hour (SMH)
Catapult Sports boss says growth, cost reduction strategy is working (AFR)
Andrew Forrest’s Minderoo is looking to back Indigenous startup entrepreneurs (Startup Daily)
Dominello joins Tech Council board as Roy steps down (InnovationAus)
Applications for ANDHealth’s startup accelerator program are now open (Startup Daily)
Apple introduces Tap to Pay on iPhone in Australia (Apple)
Around the World
Founder of student aid startup Frank pleads not guilty to fraud (The Independent)
SoundCloud to Lay Off 8% of Staff (Variety)
TikTok sues Montana over a controversial new law banning the app in the state (TechCrunch)
EU locks horns with Apple and Ireland in €14.3B tax battle (The Next Web)
Uber’s Diversity Chief Put on Leave After Complaints of Insensitivity (NYT)
Stability AI Co-Founder Sued CEO for 10 Percent of the Company (VICE)
The 5 biggest announcements from Microsoft Build 2023 (The Verge)
Amazon employees reportedly plan to walk off the job over its return-to-office mandate and layoffs (Insider)
Microsoft launches an AI tool to take the pain out of building websites (TechCrunch)
Uber teams up with Waymo to add robotaxis to its app (The Verge)
Microsoft unveils Fabric analytics program, OneLake data lake to span cloud providers (ZDNet)
Microsoft CTO Kevin Scott thinks Sydney might make a comeback (The Verge)
Meta sells Giphy to Shutterstock at a loss following UK order (Engadget)
Amazon's Generative AI for Search Will Be Another Game Changer (HackerNoon)
Peloton’s new subscriptions leave behind its pricey hardware (The Verge)
Apple looks to advance artificial intelligence for iPhones, iPads and other devices (VentureBeat)
Snowflake deal appears imminent as Neeva shuts down search, pivots to enterprise LLMs (VentureBeat)
Leaked EU Document Shows Spain Wants to Ban End-to-End Encryption; Other EU Countries Hanging Their Hopes on Impossible Solutions (Daring Fireball)
LinkedIn brings its verification tools to job posts (TechCrunch)
Leaks Regarding Instagram’s Purportedly Imminent Twitter-Like App (Daring Fireball)
Neeva, the would-be Google competitor, is shutting down its search engine (The Verge)
Alibaba to spin off its cloud, AI and business messenger unit (TechCrunch)
Figure’s humanoid robot takes its first steps (TechCrunch)
Amazon implements AI to enhance logistics and delivery speeds (Cointelegraph)
Twitter claims Microsoft broke API rules; Musk already threatened lawsuit (Ars Technica)
A lawsuit against DoorDash alleges what some users have long suspected: the company charges Apple users more than Android owners (Insider)
Stability AI open sources its AI-powered design studio (TechCrunch)
This is Instagram’s new Twitter competitor (The Verge)
AWS CEO: $12B Cloud Investment In India To Further ‘Tremendous Progress’ (CRN)
Exclusive: Google’s Sundar Pichai talks Search, AI, and dancing with Microsoft (The Verge)
Meta just told employees its latest round of massive layoffs starts next week (Vox)
Google, Meta, and Amazon’s next frontier: AI-generated ads (The Verge)
Australian Funding Rounds
AI-based task automation startup Servicely banks $3 million (Startup Daily)
Breakthrough Victoria plants $600,000 in anti-plagiarism edtech Cadmus (Startup Daily)
Australian clean tech Endua raises $11.8M to fixes renewable energy's intermittency problem (TechCrunch)
Adventus raises $22 million as Labor launches inquiry into student agents (SmartCompany)
Luxury dress sharing platform The Volte raises $4 million in Series A led by eBay Ventures (SmartCompany)
International Funding Highlights
AI startup Anthropic raises $450M from Spark, Google, Salesforce (Axios)
Staffing Startup Instawork Raises $60 Million To Expand AI Tech (Forbes)
Restaurant365 gobbles up $135M to supersize its software for the food service industry (TechCrunch)
Euan Blair’s Multiverse snaps up Eduflow in first acquisition (UK Tech News)
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