💌 Aussie Startup & VC Summary | 15th February 2025

G’day and welcome to this week’s edition of Overnight Success - your weekly download on all the important things that have happened in the Aussie startup ecosystem 🚀 .

A very special welcome to the 18 new subscribers who joined us since last week - it’s great to have you here!

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👀 Headlines 👀 

📶 Australia mandates ‘Share by Default’ for My Health Record pathology data, sparking debate on privacy (InnovationAus)

• New legislation requires healthcare providers to share pathology and diagnostic imaging reports to My Health Record by default, making Medicare rebates conditional on compliance.

• In 2023, only 50% of pathology reports and 20% of diagnostic imaging reports were uploaded, prompting the government to act to improve patient access and reduce inefficiencies.

• The Australian Medical Association (AMA) opposes the move, calling it a "blunt tool" and criticising the outdated system, arguing that linking Medicare rebates to compliance is poor policy.

• Patients can opt-out, and providers can withhold data in justified cases. A seven-day delay remains for pathology uploads to allow for follow-up care.

☑️ Audit Office clears PsiQuantum legal fee blowout, but scrutiny continues on Government investment strategy (Innovation Aus (Innovation Aus)

• The Australian National Audit Office (ANAO), the national auditor for the Parliament of Australia and the Government of Australia, found no irregularities in a $3.6M legal contract with King & Wood Mallesons (KWM), which initially started at $282K but expanded to support due diligence on PsiQuantum’s $940M investment.

• Officials argued the contract was structured as a phased arrangement, with cost increases due to uncertainties around the investment.

• Liberal Senator Andrew Bragg and Shadow Minister Claire Chandler criticised the government’s direct $470M investment in PsiQuantum without a formal procurement process.

🔠 Rod Bristow to lead Breakthrough Victoria into '“capital recycling phase” amid scrutiny about the fund from opposition

• VC Rod Bristow, former CEO of Investible, takes over Breakthrough Victoria, the state’s $2B innovation fund, with plans to transition it into an evergreen capital recycling model.

• Since its inception, Breakthrough Victoria has invested $300M across 33 companies, attracting over $1B in co-investment and supporting startups like RayGen Resources, Liquid Instruments, and Infleqtion.

• Also, since its inception, the fund has faced budget cuts, performance questions, and scrutiny from the opposition, which has accused it of “gambling” taxpayer money.

• Bristow has stated his focus is to scale investments, enhance exits, and strengthen private capital partnerships, ensuring the fund's long-term sustainability.

⚖️ Dovetail founder denies assault allegations but admits workplace relationship was a mistake (AFR)

• Dovetail’s senior lawyer has filed a sexual harassment and discrimination lawsuit against CEO Benjamin Humphrey, alleging a non-consensual relationship and a workplace culture of excessive drinking.

• In the latest on the saga, Humphrey admits the relationship was an error in judgment but insists it was fully consensual, citing hundreds of text messages, photos, and voice notes as evidence.

⚡️ Startup Retro ⚡️

Factor House raises $5M to help engineering teams manage more data

Founders: Derek and Kylie Troy-West

Melbourne-based Factor House has secured a $5 million Seed round, marking its first external funding after six years of bootstrapping. The round was led by Blackbird, with participation from OIF Ventures, Flying Fox, LaunchVic’s Alice Anderson Fund, and angel investors Steve and Michelle Holmes. The raise values the startup at $25 million.

Founded in late 2019 by Derek and Kylie Troy-West, along with founding engineer Tom Crowley, Factor House builds developer tools that help engineers manage vast amounts of real-time data. Its Kpow platform enhances the management of Apache Kafka, while its Flex platform supports Flink, enabling real-time data processing for use cases like fraud detection, instant currency conversion, and automated alerts.

Factor House reached $US1 million in revenue last year and boasts an 80% YoY ARR growth rate, with global customers including Block, Pepperstone, Airwallex, and Afterpay. The company is cash flow positive and aims to scale commercial adoption, expand its sales and marketing teams, and establish itself as a major player in the $15 billion real-time data market.

With its first raise complete, Factor House is positioning itself alongside industry leaders like Confluent and aiming to follow in the footsteps of Atlassian in the developer tools space.

Due Diligence: AFR, Startup Daily

Relume ends bootstrapped phase with external funding at $80M valuation for Webflow building blocks platform

Founders: Dan Anisse, Adam Mura and Daniel Slater

Sydney-based AI website builder Relume has secured its first external investment from Frank and Jacques Greeff, the founders of Realbase, after the brothers’ $180 million exit to Domain in 2022. The deal, which values Relume at $80 million, also sees the Greeffs take a board seat at the startup.

Relume is a platform that helps designers and businesses build websites more efficiently by offering a large library of pre-built, customisable website components. Primarily focused on Webflow, it enables users to copy and paste these ready-made sections directly into their projects, speeding up the design process and ensuring professional, consistent layouts. 

Founded in 2020, Relume has incorporated OpenAI-powered technology to help generate site maps and wireframes. The platform has created over 1 million websites, including Donald Trump’s meme coin site. 

Relume’s third co-founder, Daniel Slater, joined in 2022, bringing experience from Canva. Despite being self-funded and profitable, the startup sought investment for strategic advice as it looks to challenge Nasdaq-listed giants Wix ($12B) and Squarespace ($7B).

Due Diligence: AFR

Minikai raises $2.5M to streamline NDIS and aged care admin with AI

Founders: Keoki Alexander-Chang and Ky Shera-Jones

Melbourne-based Minikai, a startup using AI to reduce administrative inefficiencies in the disability and aged care sectors, has raised $2.5 million in seed funding. The round, led by Tidal Ventures with support from Antler, will accelerate Minikai’s expansion as it gains traction with major care providers supporting over 150,000 Australians annually.

Founded in 2024 by Keoki Alexander-Chang and Ky Shera-Jones, Minikai builds AI-powered agents that handle time-consuming administrative tasks, such as NDIS funding applications and compliance work, freeing up care providers to focus on delivering services. Alexander-Chang, a former Deloitte Forensic AI lab lead, was motivated by his mother’s struggles with social services, while Shera-Jones, a former government infrastructure engineer, was inspired by his nephew Chase, an NDIS participant.

Australian care providers spend up to 50% of their time on admin, and Minikai aims to eliminate this burden. Clients like SDA Services report significant efficiency gains, with faster NDIA approvals and better participant outcomes.

Backed by venture studio Mangosteen, Minikai is positioning itself as the foundation for AI-driven care administration, aiming to reshape workflows and improve service quality across the industry.

Due Diligence: Business News Australia, Tidal Investor Announcement Post

Index raises $3.5M Seed round to make product teams more collaborative

Founders: Simon Kubica and Christian Iacullo

Sydney-based Index, a B2B product management startup founded by former Atlassian and Canva employees, has raised $3.5 million in Seed funding at a $30 million valuation. The round was led by Blackbird and Bain Capital Ventures, with backing from Bond, Y Combinator, Linktree’s Alex Zaccaria, Superpower’s Max Marchione, and Raycast’s Thomas Paul Mann.

Founded in late 2023 by Simon Kubica (ex-Atlassian) and Christian Iacullo (ex-Canva), Index emerged from Y Combinator’s W23 cohort with a mission to build next-gen collaboration tools for product teams. The platform helps tech companies set strategic goals, replacing spreadsheets, whiteboards, and issue trackers with a real-time planning and execution system.

Since its public launch in December, Index has seen thousands of companies join its pre-order list. The fresh funding will drive feature development, integrations, and expansion, strengthening Index’s position as the go-to tool for product planning. With native integration to Linear, Index helps teams manage feature requests, prioritise opportunities, and tie planning directly to revenue—bringing clarity and confidence to product roadmaps.

Due Diligence: Startup Daily

Harrison.ai secures $179M Series C to expand AI-powered diagnostics

Founders: Dimitry Tran and Dr Aengus Tran

Australian healthcare AI startup Harrison.ai has raised $179 million in Series C funding, marking one of Australia’s largest medtech capital raises. The round was co-led by Aware Super, ECP, and Horizons Ventures, with new investors including the National Reconstruction Fund ($32M), Ord Minnett, and Wollemi Capital Group. Existing backers Blackbird and Alpha JWC Ventures also participated, bringing total funding to over $387 million.

Founded by Dr Aengus and Dimitry Tran, Harrison.ai’s Annalise.ai platform is deployed in 1,000+ healthcare facilities across 15 countries, supporting 6 million+ patients annually. Its AI has improved early lung cancer detection by 45%, enabling 32% of cases to be identified up to 16 months earlier than traditional methods.

With growing diagnostic backlogs in Australian hospitals, the company aims to expand AI-powered diagnostics to every public hospital in Australia. However, Harrison.ai faced scrutiny last year over its use of patient scans from I-MED Radiology without explicit consent. The company defended its practices, stating all data is de-identified, encrypted, and compliant with global regulatory standards.

The new funding will scale Harrison.ai’s AI-driven diagnostics to enhance global healthcare efficiency and patient outcomes.

Due Diligence: Smart Company

Shopfront raises $800K to automate multi-platform selling and reduce waste

Founders: Nate Spiteri and Drew Flaherty

Melbourne-based Shopfront has raised $800,000 in pre-seed funding to streamline e-commerce selling and keep unsold goods out of landfills. The round was led by Antler, Co-Ventures, and 5H Values Capital, with support from angel investors including Perth Angels, Brisbane Angels, and Inhouse Ventures.

Founded in 2024 by Nate Spiteri (CEO) and Drew Flaherty (CTO), Shopfront allows sellers to list products across multiple marketplaces in minutes using AI-powered automation. Traditional product listing can take 15 minutes per platform, but Shopfront cuts this down by 90% through AI and API integrations. The platform is already running a paid pilot, with a full-scale launch expected in Q2 2025.

By making resale frictionless, Shopfront targets Australia’s massive textile waste problem and helps sellers move $7,000 worth of unused goods per household back into circulation. The company is also a finalist for eBay’s $100,000 Circular Fashion Fund, securing a minimum $50,000 prize and a shot at the global finals.

With fresh funding, Shopfront plans to expand its team, ramp up marketing, and accelerate growth, positioning itself as the go-to AI-driven platform for second-hand and excess inventory sales.

Due Diligence: Smart Company

🎉 Wins 🎉 

 🪫 Newcastle startup Allegro Energy secured A$1.85 million from the federal government’s Industry Growth Program to mass-produce its safer, water-based Redox Flow Batteries for renewable energy storage. (Startup Daily)

• The grant follows Allegro’s A$17.5 million Series A raise and a 5% stake investment by Origin Energy to pilot projects using the startup’s long-duration storage technology.

• Federal minister Ed Husic says the funding will help rapidly scale Allegro’s production capabilities, reduce costs and build on Australia’s battery technology strengths.

🚗 Atlassian has become the main sponsor for Williams Racing in F1, rebranding as Atlassian Williams Racing for 2025. (Startup Daily)

• Atlassian has become the title, technology, and collaboration software partner for Williams Racing, rebranding the team as Atlassian Williams Racing for the 2025 Formula 1 season – the biggest partnership in Williams’ 48-year history.

• Check out the hyped-up sponsor welcome video here. Zoom Zoom!

👍️ Aussie Raisins 👍️ 

💲 Pearler, an online investing platform, is expanding into superannuation to tap into Australia’s A$4 trillion super pot.

• Pearler is shaking the tin for a $3 million in a pre-Series A round their existing backers, including Canadian fintech investor Portage Ventures, TEN13, and Archangel Ventures.

• This round follows Pearler’s $7.8 million seed round two years ago. Pearler aims to replicate its “boring but beautiful” investing ethos in the super space, offering a simple, low-fee product that caters to individuals who steadily contribute around 10 to 12 per cent of their after-tax income.

• Pearler is following in the footsteps of other share trading platforms like Superhero and Stake in launching a superfund management tool after grabbing market share with a share trading platform.

👀 Vibe Check 👀 

📉 Robyn Denholm, Tesla chair and chair of the Tech Council of Australia, emphasises an urgent need for a comprehensive following Australia's declining R&D investment, down to 1.7% of GDP ~ well below the OECD average. (AFR)

The TL;DR (but we suggest you read it) is: 

• Denholm argues that this shortfall threatens the country’s competitiveness and declares the slide in R&D funding as a “national emergency”. She says too few Australian firms engage in world-leading R&D despite evidence that innovation drives productivity.

• The op-ed concludes that a technology inflection point is happening right now with advances in AI, quantum computing, renewable energy, and biomedical sciences. This, combined with the Australian critical mineral deposit, gives us huge potential for economic diversification and leadership – if R&D is prioritised.

• It’s interesting to note the timing of the op-ed. Denholm has been chair of the Tech Council of Australia (according to LinkedIn) for 3 years and 7 months. According to numbers we can find from the Parliament of Australia. The percentage of R&D investment to GDP was 1.68% in 2021-2022. Which begs the question, why wasn’t Robyn writing the same op-ed 3 years ago? Why is our below-OECD average R&D spending a big deal now?

📆 Notice Board 📆 

🎪 We’re heading to Adelaide in TWO weeks for _SOUTHSTART - are you?

• To get 10% off any _SOUTHSTART ticket, use this link!*

• *The only condition is that you come and say hi to us when you’re there! 😉 

The startup events calendar is just beginning to ramp up again for 2025…!

The best place to find upcoming events to attend, and promote any events you’re hosting in the ANZ Startup Events Calendar.

Would you like to promote an event or an opportunity? Enquire about a Notice Board promotion here.

🧠 KaaS (Knowledge as a Service)

Will’s Pick 💁‍♂️ The Startup Capital Raising Process by Warwick Donaldson

• For those that check out this lengthy article, you’ll get a straightforward, step-by-step guide to raising startup capital—everything from figuring out the right investor pathway and assessing if you’re really ready to go, through to prepping your materials and actually closing the deal. It’s chock-full of practical tips gleaned from over 160 successful raises, so you’ll avoid the usual potholes and wasted time. Plus, it’s tailored for Aussie founders, so you’ll learn how to nurture investor relationships, decide when (or if) you’re ready to fundraise, and craft a pitch that really resonates with local investors.

Will’s 🏈 article: Why Aussie footballers are ditching the AFL and taking a punt in the US

• I also wrote an article about why more Aussies are dominating college football punting roles and why young footballers should consider the opportunity.

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‘Til next time,

👋 Will & Gem

🔨 Tool Box 🔧 

We’re often asked for recommendations for tools, agencies, and evening up-skilling opportunities. We’ve contacted a few of our favourite tools and people and secured some discounts for you! Our community.