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. 🚀

An extra special welcome to the 21 new subscribers who’ve joined us since the last edition!

👀 Headlines 👀 

🎨 Canva in hot water over claw-back share option (AFR)

• Canva can retract share rights from employees who publicly criticise the company, similar to a policy at OpenAI, which Sam Altman has since apologised for and reversed.

• Contracts at Canva include rules that persist even after employees leave, threatening share invalidation for breaches.

• Lucy Wark, co-founder of Normal and of a leader at Grapevine, claimed such clauses can control former staff and silence competition. It’s important to note that no public reports indicate Canva has enforced share clawbacks yet on any past employee.

• Soroush Pour, founder of Harmony Intelligence, highlighted on Twitter that these clauses are shared in Airtree’s open source contracts and have become the standard and must be changed to be more employee friendly.

  • Soroush calls for more focused 'bad leaver' clauses, suggesting that harsh contracts often result from legal and investor advice rather than executive demands.

💰 Scalare Partners acquires Tech Ready Women academy and signs reverse takeover agreement, hinting at becoming Australia’s second listed Venture Fund

• Tech Ready Women (TRW), founded by Christie Whitehill, has helped over 2,000 women into the tech startup industry.

  • 200+ companies and 400+ jobs have been created from the program. TRW alumni (all female founders) have raised $7M+ in capital.

• Scalare has also signed an agreement to acquire Candy Club Holdings Limited (ASX:CLB) in a reverse takeover

  • This would allow retail investors to invest in startups without needing sophisticated investor requirements. The reverse take over would also offer exposure to:

    1. A portfolio of 28 companies that Scalar has previously invested in

    2. Services-based revenue for advisory services offered by Scalare.

🌯 GYG IPOs on the ASX with a sizzle (AFR)

• The Mexican fast-food chain listed with a 30% bounce to $30 per share and closes the week at $29.00. It is the biggest Australian float in 3 years.

🏦 Not much for startups in the NSW Budget (Startup Daily)

• There was only one mention of the word “startup” in the NSW Budget, which referred to the allocation of funding towards rental support for the Sydney Startup Hub on York Street, which will be increased to $4M for FY25.

 ⚡️ Startup Retro ⚡️

TrueState raises $1.5M pre-Seed for platform to enable businesses to build their own AI applications

Founder: Will Ashford

Sydney-based TrueState has raised $1.5 million in funding from Airtree, Side Stage Ventures, Galileo Ventures, and Imprint Capital Partners. The startup aims to enable businesses to develop high-impact AI applications in days rather than months.

Founded by former McKinsey QuantumBlack consultant (McKinsey’s AI arm) Will Ashford, TrueState offers a platform with AI application templates that integrate with operational data to support valuable use cases like predicting machinery failure and preventing customer churn.

TrueState is built off the back of inefficiencies of current AI adoption, where businesses either rely on overhyped third-party tools or spend extensive time and resources on custom builds. TrueState's platform simplifies this by providing pre-built, customisable AI solutions that ensure enterprise-grade data privacy and security.

TrueState's platform empowers non-technical teams within organisations to create AI applications. It caters to various use cases, including sales recommendations, supply and demand forecasting, pricing, customer support, recruitment, and workplace safety.

Corporations need help to deploy AI technologies safely and reliably, positioning TrueState as a solution to automate the work typically done by costly consultants. The funding will support TrueState's technology development, team growth, and expansion to the US and UK later this year.

Due Diligence: Business News Australia

Liquid Instruments secures $15M to scale specialised hardware solutions for researchers

Co-founder & CEO: Daniel Shaddock

Canberra-born Liquid Instruments has secured a $15 million investment from Breakthrough Victoria, enabling the company to set up a Melbourne office and hire dozens of employees in Victoria.

Founded in 2014 by ANU physicists and engineers, including CEO Professor Daniel Shaddock, Liquid Instruments develops reconfigurable, precision test and measurement instruments using field-programmable gate arrays (FPGAs) and a software platform.

Liquid Instruments, which now lists its headquarters in San Diego, has previously raised over $50 million, including $28.5 million led by Acorn Capital in 2022 and $12 million from Anzu Partners in 2019.

The company's devices provide access to up to 14 different instruments via a single device, making them versatile and cost-effective alternatives to traditional, single-task instruments.

The new investment will bolster Liquid Instruments' manufacturing partnerships in Victoria and facilitate collaborations with local universities like the University of Melbourne and RMIT.

Due Diligence: Business News Australia, Au Manufacturing

Andromeda secures $3M Seed round to scale rollout of humanoid companion robot

Co-founder & CEO: Grace Brown

Melbourne-based robotics and AI company Andromeda has secured $3 million in a Seed round led by Purpose Ventures. This funding will scale the rollout of their humanoid companion robot, Abi, across Australia.

Founded by Grace Brown in 2022, Andromeda aims to address isolation and loneliness in healthcare settings through its innovative robot, Abi. Abi supports the elderly and children in care facilities with daily tasks, social activities, and cognitive activities. Its design is informed by character designs from Disney and Pixar.

Abi is developed and manufactured entirely in Melbourne, breaking the notion that such technology must be produced overseas. With strong initial traction in residential aged care homes and children's hospitals, the investment will help Andromeda expand its team, enhance Abi's capabilities, and move to a new manufacturing facility in South Melbourne.

One customer, Medical & Aged Care Group, saw Abi in a news article and has trialed a few robots with positive impacts on residents.

Due Diligence: Smart Company

Maxme secures $400K for 'human skill' development programs

Founder: Renata Sguario

Melbourne-based startup Maxme has raised $400,000 with participation from LaunchVic's Alice Anderson Fund to expand its human skill development programs.

Founded in 2019 by Renata Sguario, Maxme focuses on bridging the gap between employees and their jobs by developing essential 'human skills'.

Maxme offers a suite of products, including the Hodie app, which uses gamified learning to enhance critical skills, and the Human Skills Academy, a virtual coaching platform. Additionally, the company runs the Amica program for secondary school students and customised programs for organisations to boost team performance and readiness for the future of work.

After bootstrapping for four years, Maxme aims to use the new funds to accelerate sales and scale operations. The rise of generative AI has highlighted the increasing importance of human or "soft skills" in the workforce, making Maxme's mission more relevant than ever.

Since its inception, Maxme has onboarded over 13,600 users, up-skilled more than 5,000 employees, and empowered 500+ secondary school students across Australia. Maxme's commitment to delivering scalable and affordable human skill development solutions positions it as a leader in the EdTech sector.

Due Diligence: Smart Company

Archistar raises $5M for site planning and development tool

Founders: Dr Benjamin Coorey and Robert Coorey

Melbourne-based proptech, Archistar has raised $5 million in a new funding round, bringing its total funding to $40 million since its inception in 2018. Led by existing investors NAB Ventures, Skip Capital, ASX-listed PEXA, and chairman Prabhat Sethi.

Archistar leverages AI and digital planning records to streamline decision-making for property developers, governments, architects, and residents. The platform's capabilities include zoning, terrain analysis, environmental risk assessment, and generative design, allowing users to assess development feasibility and compliance with planning regulations quickly.

Archistar's innovative tools have seen a surge in demand, particularly from the public sector. In May, it was selected for the New South Wales Government's AI Solutions Panel, enhancing its collaboration with councils across NSW. The startup's technology aims to make urban development more accessible and efficient, reducing the time and cost associated with traditional methods. The platform already counts CBRE, Stockland, the Victorian State Government and Hassell as clients. Presently, there are 100,000 users, and 2 million properties have been explored.

The new funds will support Archistar's growth, including its expansion into international markets such as the US, where it has already begun establishing a presence.

Due Diligence: AFR

MGA Thermal lands $2.48M grant for thermal storage bricks for energy storage

Founders: Dr Erich Kisi and Dr Alexander Post

Australian clean energy company MGA Thermal has secured an additional $2.48 million from the Australian Renewable Energy Agency (ARENA), tripling its project funding. This boost supports MGA Thermal's steam-dispatch thermal energy storage technology, reinforcing its viability for grid and industrial applications.

MGA Thermal focuses on providing zero-carbon renewable energy storage to address challenges in hard-to-abate industries. By storing and dispatching heat energy as clean steam, MGA Thermal offers sustainable alternatives to fossil fuels, complementing existing renewable solutions and optimising energy efficiency.

Previously, ARENA invested $1.27 million in MGA Thermal, and this new funding will help resume the commissioning of its demonstration unit. Mark Croudace, CEO of MGA Thermal, stated that their energy storage solution is critical for balancing utility-scale renewables with distributed energy storage, aiding Australia's transition to a clean energy future.

Darren Miller, CEO of ARENA, expressed strong support for MGA Thermal, highlighting ARENA's commitment to projects that drive the renewable energy transition. He emphasised the technology's potential to assist large industrial players in decarbonising their processes.

Due Diligence: Au Manufacturing

Linkby lands $4M Series A for global growth adtech that helps businesses secure more editorial mentions

Founders: Chris Wirasinha, Andrew Chak and Adrian Fagerlund

Adtech startup Linkby has raised $4 million in a Series A round to fuel its global expansion. Led by Perennial Private Investments and supported by existing investor OIF Ventures, which doubled its pro-rata rights, the funding aims to strengthen Linkby's international presence.

Founded in 2020 by Chris Wirasinha, Andrew Chak, and Adrian Fagerlund, Linkby helps publishers monetise product mentions by connecting direct-to-consumer brands with top publishers like The Daily Mail, News Corp, and The Daily Beast. Currently, it supports over 1,500 brands and collaborates with 250+ premium publishers, newsletters and creators globally.

Operating in cities including Sydney, London, New York, and Singapore, Linkby recently reached a headcount of 60. The new capital will enhance their presence in these markets.

The platform has generated over 15 million clicks and offers publishers and advertisers a new and easy way to boost revenues. The US and UK markets now contribute over 80% of Linkby's revenue, with Australia serving as a testing ground for new products.

Due Diligence: Startup Daily

Naked Rivals lands $3M for expansion of frozen citrus cubes

Founders: Andrew Gordon and Kate Gordon

Sydney-based and health-focused FMCG, Naked Rivals has raised $3 million to fund its expansion after successfully launching in 1,600 Australian locations within three months. The funding comes from an undisclosed private ultra-high-net-worth family office via the Australian Investment Network.

Founded by husband-and-wife duo Andrew and Kate Gordon in February 2023, Naked Rivals offers frozen lemon and lime juice cubes aimed at reducing food waste and providing convenient, healthful ingredients.

Naked Rivals' product line includes 100% lemon and lime juice cubes, which have gained popularity for their consistent quality and sustainability, using "ugly" fruits that would otherwise go to waste. The company aims to reach $120 million in revenue by expanding its reach beyond Australia and into international markets.

Due Diligence: FMCG Australia

Bearhug lands $325K pre-Seed for reusable and sustainable pallet wrap system

Founders: Hugh McGilligan

Sydney-based startup Bearhug has successfully closed a $325,000 equity raise to enhance its reusable pallet wrap systems for large FMCG companies. Founded by Hugh McGilligan, Bearhug focuses on sustainable packaging solutions to reduce plastic waste. Since launching in January 2023, Bearhug has saved the equivalent weight of 345,000 plastic bottles.

Bearhug works mostly with Australian breweries, including the likes of Jervis Bay, Barossa Valley and Fernfield.

Bearhug's reusable wraps offer an eco-friendly alternative to traditional plastic wraps, and can help reduce waste, eliminate breakages and cut costs in the long term.

Due Diligence: Founder LinkedIn Announcement

Loopit lands $3.6M Seed round for mobility management platform that offers car subscription, micro-leasing, and rental

Founders: Michael Higgins and Paul Higgins

Car subscription software start-up Loopit has raised $3.6 million in its first external funding round that was oversubscribed, led by Tidal Ventures, with participation from Upswell Ventures and Luxem. The Seed investment will fuel Loopit’s expansion into Europe, capitalising on industry trends favouring car subscriptions over ownership.

Founded by brothers Michael and Paul Higgins, Loopit provides software for carmakers, dealerships, fleet rental companies, and startups to offer car subscription services. Originating from their online car dealership HelloCars, Loopit pivoted to subscriptions amid the pandemic, expanding to New Zealand last year and the UK six months ago.

The shift towards subscriptions is driven by long delays for new cars, high prices for second-hand vehicles, and increasing interest in electric vehicles (EVs). Loopit’s flexible model appeals to consumers seeking short-term vehicle access during uncertain times, with the average subscription lasting six months. Additionally, 40% of subscription customers reportedly transition to car ownership after their subscription period.

Due Diligence: AFR

Want to learn more about why we’re reporting these figures? Read about the ‘Funding the Balance’ initiative here.

🥳️ Wins 🥳

🌴 Tropical Innovation Festival wrapped up with a bang in Cairns

• Those lucky enough to spend the week up in tropical Far North Queensland were treated to a trip to the Great Barrier Reef with a side of networking, countless inspirational and insightful speakers and hospitality as warm as the weather. Check out all the action from the week here.

🔨 Build Club hosted their Demo Day in Sydney with fifteen founders pitching to a 400-strong crowd in Sydney, with four startups winning free flights to a demo day in San Francisco.

• The winners were study materials generator DoryAI, data analytics copilot Verve, language model trainer Unsloth AI, and Mary Technology, which drafts chronologies for lawyers.

• Although Build Club is founded and ran by female ecosystem leader Annie Liao, and the demo night judging line-up featuring 5 women (out of 7), some scrutiny was laid against the demo night as only all-male teams won on the night. Dr Elise Stephenson GAICD also brought up the risk of gender bias in AI as a concern.

🤖 National AI Sprint, a collab between the National AI Centre, Stone & Chalk, and Google Cloud, has awarded $500K of equity-free support to startups leveraging AI.

• Winners were Dragonfly Thinking’s complex decision navigator, Kindship’s NDIS guidance system, and Empathetic AI’s tax co-pilot.

• Read more about the awards here and Stone & Chalk’s reflection here.

⚡️ Amber Electric has secured a $3.2M grant from ARENA for a project to optimise EV charging and Vehicle-to-Grid (V2G) technology.

• Over three years, 1,000 customers will participate, with 150 receiving subsidised charger installations. (Company Announcement)

🤑 New Funds, Who’s This? 🤑 

First Australians Capital (FAC) has partnered with the Queensland Government for a $1.5M Indigenous business acceleration program.

• FAC will provide enterprise loans and grants up to $100,000, targeting early-stage Indigenous businesses. Strategic advisory services will offer support in business skills, legal, finance, marketing, and mentoring. Learn more here.

📌 Notice Board 📌 

🎤 Pitch Opps | 🚀 Accelerator | 🏆️ Competition/Award | 💰Grant | 📅 Event | 🎓️ Course

🎥📆 Show Her The Money Documentary Screening - 26th & 28th June📍 Melbourne & Sydney

• A groundbreaking US documentary that delves into the journeys of female founders as they navigate the complex world of venture capital funding is coming Down Under in two special screenings. Watch the trailer here.

• Melbourne tickets // Sydney tickets

🎓️ AWS Regional Generative AI Spotlight Program 📍 Virtual & In-person

• A four-week fast track for your pre-Seed to Seed-stage business and a way to connect with the best and brightest early stage gen AI startups across Asia-Pacific and Japan. Applications open until 30th June. Learn more here.

📆 Stone & Chalk Ecosystem Drinks: DeepTech Innovation - 27th June 📍Melbourne

• A networking session that will bring together founders, investors, mentors & professionals passionate about DeepTech, supported by CSIRO. Get your ticket ($10) here.

📍 Forward Fest - 31st July - 2nd August 📍Sunshine Coast

• A three-day business festival featuring 99 speakers, designed to unite local businesses, entrepreneurs, corporate leaders, and government representatives, along with state, national, and international delegates. Learn more here. Early bird pricing ends 30th of June! 🏃 💨 

🧠 KaaS (Knowledge as a Service)

Gem’s Pick 💁‍♀️ Two new reports that show the trajectory of the Aussie startup ecosystem

• Pitchbook has released it’s inaugural report on the Australian VC market. Download it here.

  • Check out Maxine Minter’s key takeaways.

• Startup Genome’s 2024 Global Startup Ecosystem Report (GSER) provides updated rankings for the top 40 startup ecosystems and top 100 emerging startup ecosystems around the world, including data on Sydney, Melbourne, Brisbane, Adelaide, Perth, and Canberra.

  • Chad Renando has written up this super in-depth analysis of this report, overlaying his own knowledge and research.

Will’s Pick 💁‍♂️ Why Second Time Founders Care About Distribution by Simon Murphy

• Loved this article as it neatly highlights why distribution should be just as important a focus as product development for early stage startups and draws from some handy resources.

Have we missed something? Got some feedback? We love emails, so send one over!

• 🦤 Find us on Twitter: Overnight Success, Will, Gem

• 👔 Holler on LinkedIn: Overnight Success, Will, Gem

• 💌 Email

• 🚀 Want to work with us? Check this out or contact us via email to learn about our sponsor & partner opportunities.

‘Til next time,

👋 Will & Gem