This Week in Australian Startups #66, 5th May 2024

May 04, 2024

If like me, you and didn’t make to Sunrise, the annual “Coachella for startups” run by Blackbird here’s a few summaries worth reading:

At Australia's biggest startup festival there was widespread optimism that a tough period for the ecosystem is finally coming to an end (Capital Brief)
Jodie Imam, co-founder and co-CEO of Tractor Ventures (LinkedIn)

During the same time we had two investments made by three different Australian governments in foreign companies - maybe it’s not enough to call it a trend, but certainly worth looking at.

Putting aside the individual merits of these investment, there’s been some interesting public discourse on whether Australian taxpayers should be funding foreign companies. Adir Shiffman, Executive Chairman of Catapult Sports shared his thoughts in a post on LinkedIn. In short Adir highlights how there is a lack of historical evidence that governments are good spending taxpayers money to pick ‘individual tech winners’, perhaps investments like these should be left to the existing commercial industries such as VCs - and that there’s better things such as social services or tax breaks this money could have been spent on.

The federal and Queensland governments are each contributing $470M through share purchases, grants and loans to PsiQuantum, which was co-founded by two Australian but is based in the US. As part of the investment PsiQuantum will locate its regional HQ in QLD and look to build the world’s first commercially useful quantum computer in Brisbane. It’s estimated that would create up to 400 jobs directly.

This makes me think of growing up in Adelaide and the car manufacturing industry - how many millions of dollars were given to manufacturers like Holden to keep building cars in South Australia as it would create more jobs. Ultimately that endeavour failed when the money stopped - I’m not an economist but perhaps investing in local companies, local manufacturing and local industries could have been a better investment. If you are an economist, I’d love to hear your thoughts on this!

Moving down the coast, we also saw Breakthrough Victoria invest $37M in near-space exploration platform World View, a US company, to build an advanced manufacturing facility in Victoria which would create up to 200 jobs.

600 jobs created for $1.037B is not a great return at $1.72M per direct job created. The bet is that this will grow these industries significantly and the overall state and national economies. It’s positive to see that overall all levels of governments are well and truly on the tech bandwagon and are investing heavily into the sector, but the question does remain is this the best way for governments to be spending taxpayers money, and if so should it be invested in foreign or Australian companies?

There’s already some flags popping up, with InnovationAus reporting that the National quantum advisory board “The hand-picked committee of eminent science and business leaders enlisted to provide advice to the Albanese government on the national quantum strategy were not consulted on the decision to invest almost $1 billion in California-based company PsiQuantum.”

Time will tell, but let’s hope these investments provide a great ROI for the average Australian.

Some other reads on these investment:

Quantum Questions (Capital Brief)
Labor bets big on quantum with $1 billion deal for PsiQuantum and multimillion-dollar Sydney Uni hub (SmartCompany)
Australia just made a $940M bet on building the world’s first ‘useful’ quantum computer in Brisbane (BNA)
‘Country mile ahead’: How PsiQuantum won a $1b investment (AFR)

Funding Rounds

Kashcade, a digital lender that offers startup founders non-dilutive capital, has raised $1M from Prandium Capital and several high net worth individuals (Startup Daily | AFR)
Xefco, which specialises in innovative coating technologies for the textile industry, has raised a $10.5M seed extension round led by Main Sequence Ventures with support from Virescent Ventures (Startup Daily | SmartCompany | BNA)
Doohly, a digital OOH (out-of-home) adtech startup, has raised a $500K pre-Seed round from Skalata and Archangel Ventures (Startup Daily)
Matrak, the startup which offers end-to-end supply chain visibility for the construction industry, has raised a $2.9M Series A led by G&M Capital along with Out Innovation Fund and Angel Investors (Startup Daily | BNA)
Hometime, an Airbnb property management startup, has raised $10M led by Fifth Estate Asset Management (AFR)
Enviz (fka EnvisionVR), a proptech startup uses AR and VR to allow users to virtually explore unbuilt properties, has raised $1.5M (SmartCompany)
Skyportz, a startup looking to build a network of vertiports for air taxis across Australia, has raised $606K in an equity crowdfunding campaign (Birchal)
Brane, an AI-Powered Social Discovery & Community Building platform, has raised $114K in an equity crowdfunding campaign (Birchal)
Maslow, a pre-product social-impact fintech, has raised $409K in an equity crowdfunding campaign (Birchal | Kane Jackson)
Programa, a cloud-based platform for architects and interior designers that brings projects, processes, products and purchasing together in one place, raised an undisclosed amount from Investible (Investible)
Nexl, the all in one platform for modern law firms raised an undisclosed amount from Investible (Investible)
Nucanon, a co-pilot for Narrative Designers, has raised a $500K pre-Seed round led by Skalata (Nilu Kulasignham | Skalata)

This Week in Australian Startups

This Week in Australian Startups #66, 5th May 2024

Top News

Funding Rounds

Discussion about this post