G’day, and welcome to this week’s edition of Overnight Success! Your weekly download on all the important things that happened in the Aussie startup ecosystem. 🇦🇺 🚀 A special welcome to the 25 new subscribers who joined since last weekend 👋 

On a personal note, I announced that I started working at Encour, a strategic communications agency founded by Jessy Wu. If you’d like to learn more about why I made the move and how we think about storytelling, please check out this article; I think you’ll love it. If you’d like to chat about how Encour can help you and your startup command your narrative, please get in touch with me!

Also, as a few have reached out, Overnight Success will remain the same; in fact, it’ll only get better! I’ll see you at Demo Day and SXSW! 👋 

👀 Headlines 👀 

📊 Cut Through Venture published their Q3 report with larger deals going quiet. Access the full report here.

• Startup funding in Australia dropped to $690 million in Q3 2024 from $1.5 billion in Q2, primarily due to a lack of mega-deals over $100 million.

• Despite the slump, optimism remains for Q4 as a significant backlog of startups that raised at least $20 million in 2021 or 2022 may announce new funding rounds. 👀

• Investor sentiment suggests exits are now "front of mind", with an increased focus on delivering cash returns to investors. These exits are mostly coming via secondary sales and acquisitions. (Capital Brief has more on this). 

• At the early stage, seed deals are ticking up, accounting for a third of all non-accelerator investments.

• FinTechs dominated larger funding rounds, securing four of the ten deals over $20 million, including Grow Inc ($60m), InDebted ($50m), and Shift ($35m).

• Climate Tech led in deal volume, though many were accelerator rounds; after leading in Q2, the AI and Big Data sectors fell to fourth place in deal volume and tenth in total funding.

• Funding for female-only founded teams rebounded in Q3, aligning with the three-year average (still meagre), but on a positive note, pre-seed participation by teams with at least one female founder reached 50% for the first time.

• Total startup funding for 2024 stands at about $3 billion so far; with just under $500 million needed in Q4, the year could finish as the third-largest funding year on record.

🦥 ACCC wants to impose more scrutiny on private market transactions for companies with global turnover north of $200M, likely slowing down the M&A market. (AFR)

• Companies with global turnover above $200 million will be forced to get approval from the competition watchdog for any acquisition in private and unlisted companies greater than 20 per cent.

• There are fears that this will slow down deals even when there is minimal to no prospect of harming competition. 

👭 Capital X, a free network to support women founders in startups,  launched by Jessica Baird-Walsh. (Startup Daily)

• Originally just a shared spreadsheet, Capital X quickly grew to nearly 500 members, connecting women founders and investors.

• Capital X is open to all genders, encouraging active participation to drive systemic change in the startup ecosystem.

🥧 Australian-based Boman Group gets a slice of Open AI equity with $10M investment into the $6.6B round. (AFR, Startup Daily)

• The raise valued OpenAI at US$157 billion (A$230 billion) and was led by Thrive Capital. Other investors include Nvidia, SoftBank, Microsoft, Khosla Ventures, and Abu Dhabi's MGX.

• Boman Group, founded in 2011 by Eric Gao and Julius Wei (initially as BMY Group and rebranded in 2024), manages around $600 million in assets.

• Boman's portfolio includes a few big names, such as Airbnb, Databricks, and Klarna, and they are limited partners in VC funds like Square Peg, Main Sequence, Tiger Global, and Bain Capital.

• The investment is part of Boman Group's "Unicorn strategy," focusing on backing late-stage tech scaleups ahead of an exit or capital event.

⚡️ Startup Retro ⚡️

Mutinex raises $17.5M at a $132.5M valuation for a marketing analytics platform that helps marketers make data-backed decisions

Founder: Matt Farrugia and Henry Innis

Melbourne-based marketing analytics platform Mutinex has raised $17.5 million to boost its AI capabilities and accelerate expansion into the U.S. market. Founded in 2018 by Matt Farrugia and Henry Innis, the company's valuation now stands at $132.5 million. The latest funding round was led by Marbruck Investments, with participation from EVP and Archangel Ventures. It follows previous raises of $9.5 million in November 2023 and a $5 million seed extension in February 2023.

Mutinex aims to empower growth marketers with better, data-driven decision-making tools through its SaaS platform, featuring two products: DataOS and GrowthOS. DataOS transforms unstructured customer data into a structured format, while GrowthOS enables marketers to forecast and analyse their strategies effectively. The startup has already gained traction in the Asia-Pacific region and the U.S., intending to use the new funds to deepen its U.S. market presence.

As part of its expansion strategy, Mutinex is reshuffling its leadership team. Co-founder Matt Farrugia will transition to an APAC leadership role while Danny Bass joins as Chief Revenue Officer. 

The new capital will accelerate product development and expand the team, positioning Mutinex to capitalise on growing market opportunities both domestically and internationally.

Due Diligence: SmartCompany, Capital Brief

Q-CTRL secures $86.3 million in a Series B extension ($166M total) for quantum software development. 

Founder: Prof Michael Biercuk

Sydney-based quantum startup Q-CTRL has secured an additional $86.3 million in a Series B extension, bringing its total funding for the round to a hefty $166 million. Led by GP Bullhound and joined by existing investors like Main Sequence Ventures and Salesforce Ventures, the round also attracted new backers, including Lockheed Martin Ventures, Edison, NTT Finance, and Salus Group.

Founded in 2017, Q-CTRL differentiates itself by already building and selling quantum infrastructure software in a sector still dominated by research projects. Q-CTRL is now generating revenue through quantum sensing, which uses quantum properties for ultra-precise measurements. This has immediate applications in defence, such as navigation systems for submarines and ships operating without GPS, healthcare, and resource exploration.

Q-CTRL's de-verticalisation strategy focuses on software infrastructure compatible across various quantum hardware platforms, allowing for scalable partnerships like its collaboration with IBM. 

However, the company faces challenges with Australia's strict export controls on quantum technologies, which are part of the AUKUS alliance agreements. These regulations pose significant risks to staff, prompting Q-CTRL to establish operations in Los Angeles to mitigate potential legal issues.

Due Diligence: SmartCompany, Startup Daily, AU Manufacturing, Business News Australia 

Build Club lands $1.75M pre-seed for AI community and developer marketplace

Founder: Annie Liao

Build Club, an AI e-learning platform focused on real-world projects has raised $1.75 million in an oversubscribed pre-seed round led by Airtree and Blackbird. Archangel Ventures, Co Ventures, and Treble VC also participated. The platform has quickly grown to become APAC's largest AI community, with over 4,500 members, offering project-based learning through a "bounty" system that allows businesses to submit real-life problems for AI builders to solve.

As industries face rapid AI adoption, Build Club aims to bridge the skills gap by empowering non-coders to build AI solutions. Build Club capitalises on the growing demand for AI solutions that outpace the speed at which employees work.

Build Club has partnered with leading AI firms, such as NVIDIA, Cohere, and Groq. The funds will accelerate the platform's growth and expand its industry reach.

Due Diligence: SMH, Capital Brief

Atelier lands $10M Series A to simplify beauty product innovation and manufacturing

Founder: Nick Benson and Nick Hudson

Sydney-based beauty manufacturing platform Atelier has raised a $10 million Series A round led by Macquarie Capital's venture capital division. Notable investors in the round include Daniel Attia, former head of research for entrepreneur Scott Galloway; Geoff Tarrant, co-founder of Payapps and former Deutsche Bank vice chairman; and Archangel Ventures' Rayn Ong. Macquarie director Jonathan Lay spearheaded the deal and will join Atelier's board, with Macquarie now holding a sub-20% stake. The investment follows twofold year-on-year growth with a $13 million run rate. 

Founded in 2018 by Nick Benson and Nick Hudson, Atelier aims to streamline global manufacturing networks and supply chains. Focusing on the beauty and cosmetics industry, the company works with major brands like Revlon, Frank Body, Tom Ford, Aesop and Glossier to help them innovate and bring products to market faster. Atelier operates as a single point of contact for brands, managing supplier relationships and manufacturing contracts, and charges customers per unit with a built-in margin negotiated with manufacturers.

The fresh capital will fuel Atelier's growth plans, including a future U.S. market launch. The company also intends to invest in product development, specifically an AI-powered market intelligence platform that enables clients to create best-in-category products through data-driven analysis. 

Due Diligence: AFR

Rosterfy lands $3M for volunteer management platform after doubling userbase

Founder: Bennett Merriman, Shannan Gove, and Chris Grant

The volunteer management startup Rosterfy has secured an additional $3 million investment from ASX-listed venture capital fund Bailador Technology Investments, bringing Bailador's total stake to $17.1 million. Founded in 2015 by entrepreneurs Bennett Merriman, Shannan Gove, and Chris Grant, Rosterfy offers a SaaS platform that streamlines recruiting, screening, training, and scheduling volunteers for not-for-profit organisations, government bodies, and large-scale events.

In the 18 months since Bailador's initial $9.8 million investment, Rosterfy has doubled its user base to 3 million volunteers and expanded its operations by 75% to 35 countries. The platform has been employed by high-profile events like the 2023 FIFA World Cup in Qatar and the U.S. Super Bowl, as well as by Australian nonprofits such as Lifeline Australia, OzHarvest, and the St Vincent de Paul Society.

Rosterfy was conceived when its founders recognised the challenges of managing volunteers while running an events management business. Their platform addresses these hurdles by providing organisations with tools to engage better and retain volunteers, ultimately powering over 100 million volunteer hours to date.

The fresh capital will fuel Rosterfy's global expansion plans and accelerate product development to enhance its market leadership. The market liked the announcement with the share price up 4% the day of the announcement. 

Due Diligence: Startup Daily, ASX Annoucement

Dash Technology Group snags $5M of equity and $5M of debt for their tech-enabled financial advice platform for advisors

Founder: Andrew Whelan, Darren Pettiona and Geoff Lloyd 

Dash Technology Group has secured an additional $5 million equity investment from ASX-listed venture fund Bailador Technology Investments. This latest funding brings Bailador's equity stake in Dash to $25 million, following an initial $20 million investment made in June as part of a $22 million funding round.

Based in Sydney, Dash offers a cloud-based financial advice and investment management platform that helps financial advisers and institutions deliver clients more affordable, personalised advice. The platform currently administers over $4 billion in assets.

The new capital will support Dash's acquisition of Integrated Portfolio Solutions (IPS), a deal initially announced in July. Alongside the equity investment, Bailador is providing a $5 million repayable debt facility to facilitate the acquisition. Founded in 2012, IPS manages over $10 billion in investment portfolios for advisers, family offices, financial planners, and ultra-high-net-worth clients. The entire IPS team, including executives Darryl Johnson and Mark Papendieck, will join Dash after the acquisition.

The acquisition is expected to boost Dash's funds under administration to over $15 billion, significantly increasing its revenue scale and positioning the company for organic growth. 

Due Diligence: Startup Daily, ASX Annoucement 

🤝 New Funds, Who’s this? 🤝

🚀 Antler raises a massive $77M second fund and pulls forward the Brisbane residency launch. (Startup Daily)

• The fund aims to back over 100 pre-seed startups and has already invested in 40 companies since May 2023, including Huddled, Fitflo's AI, Balo, and Enrola.

• 32% of the fund's commitments came from existing limited partners, with additional capital from Antler's Global Access Fund.

• Antler is also introducing the Agreement for Rolling Capital (ARC) in Australia, guaranteeing follow-on participation in subsequent pre-seed rounds if founders secure at least $300,000 from investors within the first year. 👀 

• Antler's pre-seed deal terms are AU$225,000 for a 12% equity stake. At this point, Antler takes an AU$68,000 platform fee. This means the Company received AU$157,000 net at a pre-money valuation of AU$1,650,000. 

• Applications for the next 10-week in-person residency are open now, and you can apply here. 

🌍 Virescent Ventures launches its second climate tech investment fund (Fund II) with a target of $200 million, achieving a $100 million first close. (CEFC Media Release)

• The fund is backed by Westpac and the Clean Energy Finance Corporation (CEFC).

• Fund II will invest in net-zero startups addressing clean energy transition, electrification, grid management, decarbonizing transport, smart cities, sustainable agriculture, and the circular economy.

• This new fund follows Virescent's first portfolio managed for the CEFC, which deployed $270 million across 34 Australian climate tech investments, including Hysata, Xefco, Renewable Metals, and Loam Bio.

 🐤 Sophisticated Tweeters 🐤 

🧠 KaaS (Knowledge as a Service)

Will’s Pick 💁‍♂️ Four Things I Learned at Melbourne International Games Week by George Osborn

• This article jumped out of my inbox. Mostly because I had no idea the International Games Week was happening 3KMs from my place. Whoops. Secondly, the article is written from an international perspective and it’s really interesting to see how George picks up on the local government support for the industry. My biggest question? How can we use this learning in the local startup ecosystem?

• These were the big takeaways George noted:

  • Government Support: Victoria has provided long-term financial backing through grants and incentives, including via VicScreen and the Digital Games Tax Offset.

  • Skills and Education: Local institutions like RMIT University produce talented game developers, ensuring a steady flow of skilled workers for the industry.

  • Cultural and Infrastructure Support: ACMI and Melbourne International Games Week (MIGW) create a strong ecosystem for indie developers to thrive.

  • Community and Collaboration: A flat-structured, supportive community allows easy access to mentorship and collaboration among developers.

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‘Til next time,

👋 Will & Gem

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