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 26 new subscribers who joined since last weekend 👋 

👀 Headlines 👀 

🎊 SXSW wrapped: Startmate Demo day, pitch winners & a Silicon Quantum Computing announcement

• Startmate held a fantastic demo night, with 1500+ attendees watching 11 startup pitches. (SmartCompany) We’ll have a full wrap-up coming soon!

• Another HealthTech, DermR Health, won the SXSW pitch competition. (SmartCompany)

  • DermR Health has created the DermrPatch that extracts pain-free skin cells and can be used for pre-screening. 

• Silicon Quantum Computing announced that it is set to launch its first commercial product, a quantum machine learning processor already used by major Australian companies like Commonwealth Bank and Telstra.

  • The processor is scaling production, and it is predicted to drive rapid growth in quantum-infused machine learning over the next few years. 🚀

• Staying with quantum, Rohan Silva, Founders Factory chair and former UK tech adviser, criticised Australia's $1 billion investment in US quantum firm PsiQuantum at SXSW, calling it a "total drongo" move. He argued the funds would have been better spent supporting local startups with tax breaks for angel investors. (Innovation Aus)

• Culture Amp founder Doug English argued that Australian startups face major disadvantages in the US market due to public financial disclosures and strict employee share ownership plan (ESOP) regulations, unlike their private US competitors. (Innovation Aus)

🎨 Mel Perkins positions Canva for IPO at SXSW after backflipping on price increases (Startup Daily)

• In a talk that sounded very, very well rehearsed and polished, Mel Perkins recounted the Canva narrative the Australian ecosystem has come to know and love. 

• Perkins touched on the impressive growth (5 million more paying users in the last year alone), global impact, focus on culture and AI, and of course, their financial returns. Canva generated US$2.4 billion ($3.6 billion) in annualised revenue.

🕊️ Swoop Aero enters administration to protect IP and recapitalise (AFR)

• The drone startup, backed by CSIRO's Main Sequence Ventures, Folklore Ventures, and Right Click Capital, has appointed BPS Reconstruction and Recovery as administrators after struggling to raise capital for production.

• Swoop Aero raised over $26 million in funding and rejected a $100 million takeover offer but was unable to raise enough money to complete its drone production.

• Eric Peck, founder of Swoop Aero explained the decision on LinkedIn here. 

🧑‍⚖️ The debate around merger laws, as referenced in last week's edition, continues (Innovation Aus)

• Australia's new Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill will require the ACCC to review deals meeting specific monetary thresholds to address anti-competitive concerns, including serial acquisitions.

• The Tech Council of Australia (TCA) warns that the broad thresholds may deter venture capital and limit tech startups' growth by complicating exits through mergers and acquisitions.

⚡️ Startup Retro ⚡️

WollemAI lands Seed funding for better climate reporting mandates

Founders: Sam Sneddon, Fang Chen, and John Mottram 

Sydney-based Greentech WollemAI has secured Seed funding and is targeting Asian markets, beginning with Singapore. The company is pursuing Australia's new climate-related reporting mandates, which take effect this January and require large and medium-sized companies to disclose their greenhouse gas emissions.

WollemAI provides detailed analytics on land and agriculture-based companies to financial institutions—including banks, insurers, asset managers, and superannuation funds—to help them comply with new disclosure rules and manage financial exposures. 

Agriculture accounts for 2% of bank loans but represents 15% of lenders' emissions exposure. Traditional methods of measuring climate risk involve manual surveys of farms and agricultural companies, a process that's impractical for institutions with large portfolios. 

WollemAI automates this by sourcing data from public and commercial sources, including satellite imagery. The platform has mapped every hectare of agricultural land in Australia. Its AI models predict carbon footprints and financial vulnerabilities under various climate scenarios, accounting for herd rotation, farm yields, and deforestation trends.

WollemAI plans to raise a Series A round within the next 12 months to expand internationally, particularly into Asia and the U.S. 

Due Diligence: DigFin

Green Gravity raises $9M to turn unused mine shafts into energy storage

Founder: Mark Swinnerton

Green Gravity, a Wollongong-based startup turning disused mineshafts into long-duration energy storage, has raised $9 million in a funding round led by HMC Capital, BlueScopeX, and Japan’s Sumitomo Corporation subsidiary SCAP H. 

The company’s innovative technology captures and releases gravitational potential energy by moving heavy weights vertically in legacy mineshafts, offering a low-cost, sustainable solution for energy storage.

The funding will support further engineering and physical testing at Green Gravity’s demonstration plant at BlueScope’s Port Kembla Steelworks. The company has partnerships with global miners and energy companies, including Yancoal and Wollongong Resources, to scale up the technology for commercial deployment.

Green Gravity’s gravitational storage system aims to provide mid-duration storage solutions of 4 to 24 hours with 80% energy efficiency, contributing to decarbonising the energy grid.

Due Diligence: Startup Daily, Innovation Aus

Carbon Friendly raises oversubscribed bridge round for large-scale carbon offset projects for agriculture

Founder: Francois Visser

Brisbane-based tech company Carbon Friendly has secured over its $500,000 target in an oversubscribed bridge financing round. The funding attracted key investors, including a U.S. cornerstone investor who is also a customer and Australian impact fund Cultiv8.

Specialising in large-scale carbon offset projects for agriculture, Carbon Friendly utilises advanced data capture and verification technology to help farmers generate carbon credits through sustainable practices. 

By making carbon finance accessible and streamlined, the company aims to alleviate the financial barriers that often prevent farmers from adopting environmentally friendly methods.

Carbon Friendly addresses the challenge of financing sustainable agricultural practices, which are typically cost-prohibitive. Their solution enables farmers to both pay for and profit from sustainable practices via carbon credits.

With the new capital, the company is expanding into the U.S. market and building a robust project pipeline. Carbon Friendly is also leveraging partnerships with global platforms like Verra for carbon credit registration and verification, enhancing the credibility and reach of its carbon offset initiatives.

Due Diligence: OS Exclusive 

Emerge secures NZ$12M Series A to be New Zealand's first challenger bank

Founders: Jamie Jermain and Jovan Pavlicevic

New Zealand fintech Emerge has raised NZ$12 million in a Series A round led by Altered Capital, with support from Icehouse Ventures, K1W1, NZ Fintech Fund, and US-based Hard Yaka. The funds will fuel the company's marketing, sales, and product development as it aims to build New Zealand's first challenger bank.

Co-founders Jamie Jermain and Jovan Pavlicevic, who previously launched the children's financial literacy app SquareOne, have shifted their focus to business banking with Emerge. The app-based platform offers quick account setup, team cards, and EmergePay, a smartphone-based payment terminal, streamlining banking for startups and businesses.

While not yet a full-fledged bank, Emerge aims to redefine banking with features like payment acceptance and accounting tools. The platform eliminates the need for branch visits and paperwork through a fully digital onboarding process. The platform has received strong customer feedback for its speed, ease, and transparency, helping businesses save time and money.

Due Diligence: Startup Daily 

Viridian Renewable Technology secures $2.5M for food recycling facility

CEO: Martin Pike

Breakthrough Victoria has invested $2.5 million in Melbourne-based Viridian Renewable Technology, a startup that recycles food waste into insect-based protein and fertiliser. 

Founded in 2016, Viridian operates Australia’s first large-scale insect protein manufacturing plant in Derrimut. The investment will help expand the facility, adding 15 jobs and boosting annual production by 1,300 tonnes of insect protein.

Viridian’s process uses black soldier fly larvae to convert food waste into protein for pet and animal feed, with byproducts like frass (insect excrement) used as fertiliser. The company plans to build two additional plants in Gippsland to support local food and agriculture businesses.

Viridian's competitors include Goterra, backed by Mike Cannon-Brookes, and Blackbird-supported Bardee. Both also focus on insect-based protein production. Viridian previously launched its pet treat brand but now concentrates on insect meal production.

Due Diligence: Startup Daily, Au Manufacturing, Australian Manufacturing

Lumachain lands investment from Chipotle for AI supply chain platform 

Founder: Jamila Gordon

Chipotle Mexican Grill has made a minority investment in Sydney-based AI supply chain platform Lumachain, through its $100 million Cultivate Next venture fund. The investment aims to support Chipotle’s long-term growth plans to expand to 7,000 restaurants in North America. 

Lumachain, a solo female-founded company, provides a real-time traceability solution that tracks the origin, location, and condition of food items from farm to table, reducing waste and improving efficiency.

Additionally, Lumachain's Computer Vision AI platform enhances operations inside food production plants, improving quality, efficiency, and safety. This investment follows Chipotle's focus on leveraging AI to optimise supply chain management and ensure quality in perishable goods. The exact amount of the deal was not disclosed.

Lumachain raised US$19.5 million in a Series A round led by Bessemer Venture Partners and with participation from existing investor Main Sequence.

Due Diligence: FinSMES

Polymath raises $1.5M to make learning math fun for children

Founders: Sophie and Christian Silver

Polymath, an educational app that makes learning maths fun and engaging for primary school students, announced a $1.5M round during Startmate Demo Day on Monday.  

The game encourages daily practice and learning with fun, interactive elements and offers progress tracking for parents and teachers. The app personalises the learning experience for each child through adaptive questions aligned with local curricula.

While the raise details are unknown at this stage, Polymath was a member of the Startmate Summer23 cohort and is based in Auckland, New Zealand. 

Due Diligence: Announced at Demo Night!

Melbourne University backs seven startups with funds from Breakthrough Victoria and Tin Ally Ventures

Seven startups received $11.7M in funding through the University of Melbourne's Genesis Pre-Seed Fund and Tin Alley Ventures. (Melbourne Uni Annoucement)

These investments come from the $15M University of Melbourne Genesis Pre-Seed Fund in partnership with Breakthrough Victoria and the $125M Tin Alley Ventures fund, a joint venture with Tanarra Capital, both in their second year of operation.

• Porous Lane is creating highly permeable, eco-friendly pavement that captures and recycles water, promoting a healthier environment.

• Cell Bauhaus uses mathematics and computer modelling to understand, predict and alter the behaviour of living cells.

• Remagine Labs has a wearable electropharmaceutical that will provide patient-centred care and consistent medication dosing, providing peace of mind to healthcare consumers worldwide.

• Proxima Bio, based at WEHI, is developing the next generation of medicines, opening new possibilities for targeting disease-causing proteins. This has significant potential applications in autoimmune diseases and cancers.

• exteRNA is a Peter MacCallum Cancer Centre and WEHI startup that is developing a set of novel drugs capable of regulating RNA biology for the treatment of cancer.

• Apromore helps businesses gain deeper insights into their operations and optimise their performance and compliance by providing clear, real-time digital transparency of process data.

• FlowAI uses AI-enabled design and continuous manufacturing of active pharmaceutical ingredients for critical medicines.

🥳 Wins 🥳

🛰️ Fleet Space successfully works with 40+ companies to detect minerals from space (Innovation Aus)

• The Fleet Space ExoSphere tech is an end-to-end solution combining satellite, AI, and edge computing to conduct 3D subsurface mapping.

• The mapping can be up to 2.5km deep for critical minerals exploration, with minimal environmental impact.

• Forty companies, including RioTinto and Core Lithium, have used ExoSphere to conduct over 400 surveys across five continents, supporting the transition to renewable energy.

🤑 M&A 🤑

🏦 UK-based payments platform Banked has acquired Australian fintech Waave for an undisclosed sum, enhancing its real-time "Pay by Bank" offerings in Australia. (Startup Daily)

• Launched less than 18 months ago after a $4.7 million Seed round in April 2023, Waave was co-founded by Ben Zyl, Mark Connolly, and Peter Traianou. It leverages the Consumer Data Right (CDR) (aka open banking) to provide a low-cost direct debit alternative to traditional card payments.

• Waave is Australia's first B2B and B2C payment platform utilising open banking across all major banks. Its technology offers up to 80% cheaper transaction costs than credit card payments.

💱 Flux Corp, a digital financial education platform, has been acquired by Netwealth for $2.46M. (Business News Australia)

• Founded in 2020, Flux provides gamified financial literacy tools and has over 430,000 members and 84,000 app subscribers. Flux is well known for its What the Flux podcast and newsletters.

• This acquisition aligns with Netwealth’s strategy to engage with the next generation of investors amidst a $3 trillion wealth transfer over the next 10-15 years.

Mini Job Board

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👀 Vibe Check 👀 

⛓️ Linktree learns from the bubble ZIRP era, having halved its workforce from 288 to 143 employees since 2022, and focuses on sustainable hiring. (AFR)

• Linktree had their 2023 annual financial reports made public. (AFR) 

• Despite solid growth, the company spent $2 for every $1 made. 

🤝 ✨  The inaugural Forbes 30 under 30 Australia list is released with The Australian’s Top 100 Innovator List. 

• The Forbes List was splattered with OS readers and community members. 

• A special congratulations to Grace Brown,Annie Liao, Abhishek Maran and the co-founders of Redactive AI.

• Check out the complete lists at the following links: 

  • Technology

  • Finance and VC

  • Media

  • Science/Healthcare

• The Australian also published their Top 100 Innovators list, which can be explored here. 

 🐤 Sophisticated Tweeters 🐤 

🧠 KaaS (Knowledge as a Service)

Will’s Pick 💁‍♂️ Four Vital Signs of SaaS by Scale Ventures Rory O’Driscoll

• This a succinct blog post on four key metrics that every SaaS investor and founder should be focussing on, with benchmarks and explainers on how to measure and why you should! Here is the TL;DR on the metrics.

  • Revenue Growth

  • Sales Efficiency or distribution efficiency

  • Churn

  • Cash Burn with examples at different run rates

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‘Til next time,

👋 Will & Gem

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