Discover more from This Week in Australian Startups
This Week in Australian Startups #43, 29th October 2023 - Why SafetyCulture 2.0 could be a $1B+ ARR opportunity
This week we haven’t quite seen the mega rounds of last week, but a respectable $32.07M raised across an impressive 15 startups!
There’s a been a lot of news and updates this week, but my pick is SafetyCulture’s new product announcements, or as founder Luke Annear put it ‘SafetyCulture 2.0’.
Every SaaS company hits a certain point where growth starts to slow, this could be for a number of reasons but in the best situations it’s usually when a startup is starting to exhaust its current TAM with its current product.
That leaves generally two options - either verticalise or go horizontal , which I talked about in September when Canva started their verticalisation journey;
It’s not unusual for tech companies to start out with a core SaaS offering and slowly expand either through horizontilisation (same product, new audience) or verticalisation (new product, same audience). More and more SaaS companies are becoming platform companies as they look to build more products to capture on their core audience. The best example that comes to mind for me is HubSpot which started out as a marketing automation platform, but now has products for sales, service/support, CMS/website and operations teams.
“Our claim to fame was we built the world’s most used checklist app in the workplace, and for many years, that’s what the Safety Culture business was built around,” founder Luke Anear said in an interview with The Australian.
Currently SafetyCulture has 1.5M members, I’m assuming these are users, including the free tier for companies with less than 10 users, and 75,000 business using the platform. The goal is to increase it’s user base to 100M (66x increase) by 2032, just under 10 years.
In a 2021 Crunchbase article it was estimated they would reach $100M ARR by that years end. Let’s be conservative and say as of 2023 SafetyCulture is at $100M ARR, with 1.5M users, that’s $67 ARR/user.
Fast forward to 2032, with a goal of 100M users at a flat $67 ARR/user that would put their ARR at a massive $6.7B! The real maths to forecast is obviously not that simple, but even if we apply a 30% YoY growth, assuming $100M ARR in 2023 - that would get SafetyCulture to $1B+ ARR by 2032.
These are all back of napkin numbers, and without having real data this is nothing but speculation - the point I’m trying to make really is that by increasing its TAM and starting its verticalisation journey with the new platform play, I think is SafetyCulture could be aiming to hit $1B+ ARR by 2032 - and it looks achievable.
Subscribe to get weekly updates on the latest news in the Australian startup ecosystem.
With the new SafetyCulture 2.0 there’s more revenue streams and opportunities to further monetise. In a press release SafetyCulture unveiled its new platform;
Training - offering a smarter way to onboard, instruct, and upskill teams. This feature digitises work instructions and equipment manuals and helps create training on the go.
Assets - providing a versatile digital record-keeping tool for physical assets, where users can also perform inspections and log issues against specific assets. This feature offers an up-to-date audit trail and access to vital data, like vehicle telematics via QR code.
Sensors - offering the ability to monitor a variety of sensors and telematics.
Heads Up - helping leaders communicate critical team updates via video. The feature also records acknowledgment of this information from teams.
Marketplace - assisting workers to order workplace gear and equipment with a single click. This feature has been designed to simplify procurement, free up valuable time, and become a one-stop shop. 70,000 products from 120 brands are now available to customers in the USA and Australia.
A more detailed look is available on SafetyCulture’s website.
This is a big and exciting update, and much more than headlines like “SafetyCulture’s AI push” make it sound like. There’s a lot of new revenue streams that are now unlocked - from allowing any front line worker to build their own training module, to the launch of Marketplace “a one-stop shop for workwear and supplies, integrated into the SafetyCulture platform”.
I love this verticalisation and platform play, it significantly increases SafetyCulture’s TAM - it’s an excellent leverage of it’s huge customer base. Think how Meta ‘growth hacked’ Threads user growth with Instagrams customer base. There’s an excellent opportunity to do something similar here at a different scale.
The next 12 months are going to be particularly exciting as we see how the uptake is of new products, and gear up for a mega round in 2024 with Luke sharing in an interview with Capital Brief “We will look to do a bigger funding round next year that could potentially bring in three, four, or five hundred million dollars”.
With a significantly bigger TAM and an opportunity to hit $1B+ ARR, a raise that big doesn’t sound out of the question to me.
Victoria is offering medtech startups $500k grants for their research projects (Startup Daily)
Uber cops $412,500 fine for 2 million spam emails (Startup Daily)
VentureOn Partners moves into proptech, acquiring Story Bridge Ventures (Startup Daily)
Asian VC Sequoia India selects two Australian startups, Relevance AI and Mercu, for its accelerator after rebrand and split from US (Startup Daily)
Australian startups Onvol and Economical Energy chosen for Shell’s climate tech accelerator Studio X (Startup Daily)
Webcentral sells hosting business for $165M, rebrands to 5G Networks (ARN)
Hipages offloads its 19.5% stake in Proptech Labs to RACV arm for $8.4M (BNA)
Zip’s shares spike on full-year earnings upgrade as US business gathers momentum (BNA)
AirTrunk calls in Fortescue deputy chairman Mark Barnaba to chair its board, ahead of IPO (AFR)
Australia’s big video game hope Mighty Kingdom hangs by a thread (AFR)
New CSIRO boss Doug Hilton says big ideas trump commercialisation (AFR)
Venture capital firm Peak XV (formerly known as Sequoia India and Southeast Asia) returns to court Aussie start-up founders (AFR)
Blackbird Ventures: how one of Australia’s top technology venture capital firms made millionaires (AFR)
Seek is using AI to help you land the perfect gig (The Australian)
Axiom Holographics has been selected to pitch to a delegation of investors at CapTech2023 (The Australian)
23/24 Australian Tech Salary Guide by Think & Grow released (Think & Grow)
The tech gender gap, WFH and the rise of deep tech (Capital Brief)
HolonIQ’s annual list of the 50 most promising EdTech startups from Australia & New Zealand (HolonIQ)
Blossom App reaches $40M under management (LinkedIn)
Australian start-up Lumi wins global content innovation award in Cannes (ISB)
Eucalyptus refreshes its brand after launching 5 years ago and over 1 million patients treated (Eucalyptus)
Jack Xu shares a market map of the Australian companies working in climate tech (LinkedIn)
Brisbane-based charging company Tritium loses its spark (AFR)
Five V Capital’s deal makers chase $700M for fifth buyout fund (AFR)
Around the World
Amazon Managers Can Now Fire Employees Who Refuse to Work From the Office 3 Days a Week (Entrepreneur)
Ulku Rowe Is the First Google Employee to Beat the Company in Court Over Sexist Discrimination (WIRED)
Amazon’s virtual health clinic can now treat patients for a cough, cold or flu (TechCrunch)
Cloud Giants (AWS, Azure and Google Cloud) Report Q3 '23 (Clouded Judgement)
The jury finally hears from Sam Bankman-Fried (The Verge)
What to expect from Apple’s ‘Scary Fast’ Mac event (The Verge)
Tech layoffs are back with a vengeance (TechCrunch)
X to take on newswire services with new product, XWire (TechCrunch)
Zuckerberg says Threads has almost 100 million monthly users (The Verge)
The new, “efficient” Spotify has a very different approach to podcasting (The Verge)
Google Spends $26 Billion Annually to Be the Default Search Engine Almost Everywhere (and Most of It Goes to You Know Who) (Daring Fireball)
Amazon earnings on deck with AI, web services, FTC monopoly challenge in focus (TheStreet)
Meta’s New Year of Efficiency Won’t Look Like the Old One (WSJ)
The UK’s Controversial Online Safety Act Is Now Law (WIRED)
Australian Funding Rounds
CiperStash, the cybersecurity startup on a mission to stop data breaches, has raised a $4.8M Seed round led by Skip Capital with participation from SixThirty Ventures and AirTree (The Australian)
Heidi Health, the medtech who are on a mission to advance the world’s transition to AI-supported healthcare, have raised a $10M Series A led by Blackbird with participation from Hostplus, Vesta, Wormhole Capital, Archangel Ventures, Possible Ventures and Daniel Ventures (TechCrunch)
Car Expert, Australia’s largest online classified site for new cars, has raised a $3M Series B round described as a bridging round ahead of a pre-IPO raise next year with aim to list on the ASX in 2025 (The Australian)
LifeBid, the startup building a 100% digital life insurance platform, has raised an additional $750K in equity crowdfunding on Stride Equity (SmartCompany)
Local Measure, which provides a next-generation customer experience through it’s call centre software, has raised $7.9M from investor Future Now Capital (AFR)
Outstaffer, an HR tech platform that helps businesses find, hire, equip and pay staff, has raised a $1.5M Seed round led by COO Michael Locaso (formerly COO of Listing Loop), with participation from Utiliti Ventures, 1in100 Ventures and Side Stage Ventures (Startup Daily)
Factory.app, which provides a job management software for manufacturers, has raised a $1.05M Seed round led by Investible with participation from TechnologyOne founder Adrian DiMarco, 1in100 Ventures, Beachhead Venture Capital, and Hugo-Hamman Investments (Startup Daily)
Got Cakey, a marketplace for buying cakes, has raised $580K in equity crowdfunding on Birchal (SmartCompany)
Norwood Systems, an ASX listed telecommunications software company, has raised $710K from Alto Capital (ARN)
SoNiA Green Tech, WorkbenchX, DeCarice, Powour and Green Dynamics share in $580K of funding as part of being the first cohort of Climate 10x (BNA)
Litecard, who helps organisations issue digital cards to their customers and members’ smartphones, has raised a $1.2M pre-Seed round from Func Ventures, Cut Through Angels, Coin Capital Ventures, and Blossom Capital Partners (AFR)
International Funding Highlights
Google commits to invest $2 billion in OpenAI competitor Anthropic (CNBC)
Aiolos Bio Launches with $245 Million Series A Investment to Advance Development of Novel, Phase 2-Ready TSLP Antibody (businesswire)
Island, the enterprise browser market leader, secures $100m in Series C investment (FinTech Global)
Pony.ai gets $100M, establishes JV with Saudi Arabia’s Neom (TechCrunch)
Thanks for reading This Week in Australian Startups! Subscribe for weekly updates on the latest news in the Australian startup ecosystem.
Subscribe to get weekly updates on the latest news in the Australian startup ecosystem.