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 very special welcome to Kate Dow, who joined the team this week to help Will and Gem write the newsletter! Kate is currently a Graduate Research Assistant with Roy Morgan but was keen to get her feet wet in the startup ecosystem. There’s nothing quite like writing about all the startup news each week to get up to speed…! 😜 

Does your OS newsletter get cut off by Gmail’s pesky mobile app? You can read the full version without interruption here.

Headlines

⚖️ Labor proposes an increase to ‘sophisticated investor’ test requirements

• Late last week, the AFR reported that the Albanese government is proposing to increase the wealth threshold under which investors can be considered “sophisticated” (set under the 2002 Howard government) from $2.5M in net assets to $4.5M and net income tests are proposed to increase from $250K to $450K. To say this stirred some serious outrage would be an understatement…

• It’s raised concerns across the startup ecosystem that the new thresholds would limit funding opportunities, preclude startup founders/operators from reinvesting back into the ecosystem, and

  could have downstream effects that exacerbate wealth inequality, including further limiting the ability for women to participate in Australia’s innovation, as the gender pay gap prevails.

• If you think this policy proposal could be improved, pop a signature on this petition proposing that ASIC establish a new education-based certification process.

🤷‍♀️ Blackbird-funded & male-founded startup, Kiki, pivots to launch ‘NYC girls club’

• Kiki started out as an invite-only subletting startup in New Zealand called EasyRent, before moving to Sydney, setting up shop, growing rapidly, and then moving to New York. The team initially secured $6M in Seed funding led by Blackbird.

• Kiki has now announced a pivot away from their invite only subletting business model and towards a girls-only club that seeks to help Manhattan women “thrive” and “not just live”; Girls Who NYC.

• The pivot was picked up by the AFR following concerns around Blackbird’s latest public funding rounds focusing on male-only teams. Blackbird rebutted this with a solid post by Alexandra Gifford that BB does invest in diverse founders and some investments aren’t public.

• Regardless, this sparked an outcry of concern, predominantly around a male-dominated team building a social space for girls after hiring their first female team member.

• The discussion will continue online but Afterwork’s Jessy Wu called for a more balanced view of the pivot and is well worth a read. TL;DR while there are some red flags in this story, startups need to be agile, and this could also be seen as just another hypothesis being tested by a dynamic team.

🤖 Australian Government's interim response on the safe use of artificial intelligence is deemed a little late and a little insufficient, given potential impact of AI

• The Federal Government released its interim response on "Safe and Responsible AI in Australia" on Wednesday. Seeking to balance innovation with risk management, the response is a risk-based approach, targeting high-risk AI applications while allowing low-risk ones to thrive with minimal restrictions.

• The general consensus from both the ‘AI apprehensive’ public as well as the Tech Council, is that the response may be light on addressing the potential risks of AI, as well as light on investment (less than A$200 million). Check out Gemma’s KaaS below for some extra reading to get you up to speed on this! 👇️ 

⚡️Startup Retro⚡️

Prota Therapeutics raises $32M A1 round to support its mission of advancing allergy treatments

Founder: Mimi Tang

Melbourne-based biotech, Prota Therapeutics, led by founder Dr. Mimi Tang, an immunologist allergist specialising in food oral immunotherapy, has secured $32 million in a Series A1 funding round. The round comprised a combination of equity and debt financing from Singapore-based SPRIM Global Investments (SGI).

Established in 2016, Prota Therapeutics specialises in solutions for allergies, particularly to peanuts. To do so, Prota Therapeutics employs cutting-edge immunotherapy technologies based on more than 15 years of research led by Tang at the Murdoch Children’s Research Institute to overcome food allergies. Prota raised a Series A round of $15 million which was led by OneVentures, via their Healthcare Fund III, making OneVentures one of its largest shareholders.

The new funds will enable a Phase 3 clinical trial for its oral therapy treatment for peanut allergies. Specifically, they will go towards developing the company’s chemistry, manufacturing, controls (CMC), and regulatory path to an Investigational New Drug (IND) application - expected to be submitted in 2025.

The TAM of peanut allergies makes for a compelling investment with an expected worth of US$1 billion by 2030 with annual growth rates of 10%.

Due Diligence: StartupDaily

National Renewable Network secures $10M for retail solar and battery rollout

Founder: Alan Hunter

National Renewable Network (NRN), a solar-focused infrastructure provider based in Sydney, has raised $10 million in loans from ESG private credit business Catalytic Impact Capital. This debt funding comes following a $3.5 million capital raise in late 2023.

NRN was established in 2021 as a green energy play looking to revolutionise Australia’s energy network by providing solar and battery infrastructure to households and businesses at no cost. The disruptive model works by upgrading homes and businesses to produce, store and use their renewable energy. The business then partners with energy retailers to only charge customers for the solar power they use, with the remaining energy being managed by NRN’s network.

The new funding will be used to install more than 600 solar battery systems nationwide in the coming months. These batteries are forecast to save Australians more than $6 million over the next decade. NRN aims to spend a further $100 million on installing solar and battery systems in 15,000 homes over the next three years.

Due Diligence: StartupDaily, AFR

Wins

Canva’s growth paves way for an upgraded, Sydney-based HQ

• Targeting a 2026 opening, the move aims to bring together team members currently scattered across CBD offices into a 12,000 sqm Surry Hills building, accommodating the company's expanding staff (which increased 39% in 2023) while supporting hybrid work.

Live entertainment tech business, Surreal (formerly known as Muso), has launched its agent productivity tool for clients worldwide

• Founded in 2018, Surreal is a live entertainment tech business specialising in software for booking agents. It’s since headed overseas and has gained its first US customer.

• The tool aims to “eliminate unnecessary administrative burdens” with power scheduling and booking, which enables agents to book across multiple venues while simultaneously seeing their artists’ availabilities and clashes. Other features include artist management, an offer and booking system, automated payments and more.

HR software company Employment Hero’s raise of $263M in October 2023 was also a liquidity event

• This means early investors are cashing out and fresh capital might be entering the ecosystem.

Uluu partners up with Quicksilver as it scales up its seaweed alternative

• The Perth-based climate tech aims to replace large-scale plastics by turning farmed seaweed into a plastic alternative. The partnership with Quicksilver is a pumpin’ commercial proof of concept to supply plastic imitating wax combs (‘scuse the surf pun).

• Uluu has big plans for 2024, hoping to expand into clothing, packaging and an application for B Corp status. Rumour has it they may also be looking to close a Series A later this year 👀 .

😍 We love sharing your startup wins! Have something you’re celebrating? Send Gemma an email via [email protected].

Notice Board

Dovetail is launching its first annual conference Insight Out - 11th April 📍 San Francisco, with free online access!

• Aussie customer insights startup, Dovetail, have gathered a lineup of speakers to share perspectives on leveraging customer insights.

• Learn more & grab tickets here

The Startup Network Presents: Future Horizons - 2nd February 📍 Melbourne

• Bring in 2024 by exploring future frontiers of tech and discovering what’s next!

• Learn more & apply here.

State of Aussie Startup Funding Report 2023 - 8th February 📍 Sydney

• Hosted by Cut Through Venture and Folklore Venture, join this annual deep dive into the state of the Aussie startup funding market, and get a sense of what to expect for the next year.

• Learn more & get free tickets here.

KaaS (Knowledge as a Service)

Gemma’s Pick 💁‍♀️ Australia plans to regulate ‘high-risk’ AI. Here’s how to do that successfully, The Conversation

• A great article that provides an overview of the various considerations at play when thinking about how we “de-risk” AI. Read this if you want to provide a nuanced perspective in conversations about the government’s proposed legislation in the coming weeks!

• Perhaps being married to a Risk Manager biases me here, but I found this to be the most thought-provoking paragraph, “Defining “high risk” settings is challenging. The concept of “risk” sits on a spectrum and is not absolute. Risk is not determined by a tool itself, or the setting where it is used. Risk arises from contextual factors that create potential for harm.”

Will’s Pick 💁‍♂️ How to describe your business as an equation by Lenny Rachitsky and Dan Hockenmairer

• I loved this article by Lenny & Dan about distilling businesses into simple equations. Often, we can get so lost in the nuance of working in and around businesses that we lose sight of the levers we should be focusing on that affect revenue and profit. This exercise can help dial that in and thankfully, there are plenty of examples.

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‘Til next time,

👋 Will, Gemma & Kate!