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 the 21 new subscribers who joined us this week. It’s great to have you here!

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👀 Headlines 👀 

🎨 Microsoft enters design software market with Canva competitor, Designer (AFR)

• Weeks after Canva launched its enterprise focused solution at Canva Create, Microsoft has launched ‘Microsoft Designer’, a design tool that allows users to create from templates, with AI or from a blank canvas. 

• Microsoft is following a similar competitive approach they’ve used to quell the likes of Slack by offering a similar product (Microsoft Teams, in that case) included in the office bundle. 

🎯 Cryptocurrency trading expert & ex-Treasury Director snagged by Coinbase to help navigate incoming legislation (Capital Brief) 

• American cryptocurrency trading platform, Coinbase, has recruited David Menz, a former Treasury director and ASIC economist, as its policy manager for APAC, potentially signalling the company’s intentions to expand its presence in Australia.

• This comes as the industry anticipates the introduction of new Australian legislation that will provide greater regulatory clarity (and potentially some hurdles) for current players, including local competitors to Coinbase, such as Swyftx.

⚖️ Birchal cuts staff in wake of overall startup funding dip & releases annual sector report

• Birchal released it’s annual report on the Crowd-Sourced funding (CSF) sector, Funded FY23/24, this week. Here’s the TL;DR:

  • Activity across equity crowdfunding platforms in Australia shows overall stability and modest growth with a 16% increase in the number of companies using CSF, while the total amount invested only increased by 2% compared to the last financial year, delivering $64.5 million from 35,000 investors.

  • Birchal leads the market, hosting 66 of a total 99 campaigns and raising $46.5 million from 27,000 investors. The average deal size was $661k.

  • Top industries: Food and Beverage ($19.7M), Healthcare (largely cannabis-focused) ($14.2M), Sustainability ($8.1M), and Manufacturing ($4M).

• The report follows a tightening of the belt at Birchal, which has made a handful of redundancies in order to achieve a 30% reduction in costs.

 ⚡️ Startup Retro ⚡️

Cuttable secures $5.5M in Seed funding for digital advertising tooling

Founders: Jack White, Ed Ring and Sam Kroonenburg

Melbourne based Cuttable, an AI-driven digital advertising platform has secured a $5.5M Seed round. The funding was led by Square Peg with Rampersand also investing. Cuttable aims to revolutionise ad creation by automating on-brand content tailored to various digital platforms. Square Peg partner and Seek co-founder, Paul Bassat, will join the board. 

Cuttable is founded by Jack White, Ed Ring and Sam Kroonenburg. Sam sold his previous company, A Cloud Guru, for $2B three years ago to Pluralsight. Cuttable's platform, spun out of White’s agency Sunday Gravy, leverages AI to streamline ad production, blending human creativity with automation. Kroonenburg's return to hands-on entrepreneurship stems from his passion for building companies, despite a stint as an investor and mentor. He envisions Cuttable as a globally significant venture. 

For customers, Cuttable offering a paradigm shift in creating high-quality advertising content at scale. Their automated tools claim to boost productivity tenfold, allowing marketing teams to focus on creativity. Traction has come in the form of some major customers including catch.com.au, Medibank, and Nando's.

Investment Notes: Rampersand, Square Peg

Due Diligence: AFR

PREVE lands $550K pre-Seed investment for patient treatment solution for physios

Founders: Adam Beaupeurt and Caelum Trott 

Preve, an pre-product healthcare startup, has raised $550K in pre-Seed funding. The round included Archangel and angels such as Charlie Gearside, Alexey Mitko, Justin Lipman, Henry Innis, and Yaniv Bernstein. 

Preve is on a mission to transform physiotherapy by leveraging artificial intelligence to enhance patient treatment and programming. The startup addresses a critical issue in the physiotherapy field: the alarming 80% dropout rate of patients from their treatment plans, which contributes to a re-injury rate of nearly 70%.

By streamlining treatment programs within clinics and fostering greater accountability and engagement between physiotherapists and patients, Preve aims to ensure patients complete their care plans.

Looking ahead, Preve envisions building the largest, most comprehensive, and connected proprietary dataset in physiotherapy. This dataset will be instrumental in delivering improved quality-of-life outcomes through accessible and affordable care.

The founding team includes Adam Beaupeurt, who previously excited a marketing agency in 2020. Since 2015, he has been an active angel investor, advisor, and mentor to around 20 startups. On the physio side, co-founder Caelum Trott, brings 15 years of expertise as a physiotherapist. He owns multiple clinics in Sydney, employing 20 physiotherapists and managing thousands of patients. 

Due Diligence: Founder Announcement 

Fundabl closes $3.2M equity raise and launches new venture debt fund

Founders: Ethan Singer and Nathan Ryba

Fundabl, a Sydney based venture debt provider, has raised $3.2 million and announced the launch of a new venture debt fund aimed at supporting Australia's growth-stage businesses. With loan offerings between $500,000 and $5 million, Fundabl targets the funding gap faced by businesses often overlooked by traditional lenders.

In the current challenging funding climate, particularly the post-COVID boom in venture capital, many scale-ups are struggling to secure equity investment. Fundabl's debt capital solutions provide an alternative, complementing equity deals and enabling founders to maintain greater ownership of their companies.

The debt lines are considered general business loans with no personal/director guarantees required. Furthermore, Fundabl doesn’t have any requirement for equity warrants and loans are typically approved within 1-3 weeks.

Fundabl has already earned the trust of over 65 companies, including Lyka, T-Shirt Ventures, Safewill, and Amber Electric, demonstrating strong demand for this “new breed” of lender.

Due Diligence: Capital Brief, Startup Daily 

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

🤑 New Funds, Who’s This? 🤑 

Square Peg is raising $840 million for its sixth fund and a new “Opportunities Fund 3”

• Despite the last two years being the toughest since its inception, the VC firm reported its best performance in the past 24 months, including notable exits like Deci.AI to Nvidia and partial sales in Canva and Bugcrowd, returning $283 million to investors.

• Canva remains a key contributor to the portfolio, representing a third of Square Peg's returns.

• The portfolio is now valued at $4.4 billion, with a gross internal rate of return from exits at 44%.

🚶‍♀️ People Movements 🚶‍♂️ 

Founder Stevan Premutico steps away from m&u

• me&u was founded in 2019 and is now, according to Premutico, the “#1 order and pay platform globally with $2 billion in annual sales and 6,000 restaurant partners across three continents.”

• This follows the company’s merger with its once-rival Mr Yum late last year.

• Premutico previously founded restaurant booking platform Dimmi (rebranded as The Fork), which was acquired by TripAdvisor in 2015.

• What’s next for Stevan? His LinkedIn profile gives us a clue, saying: “Taking a much-needed sabbatical and Dad time to clear my head and heart (I do this after each startup.) Then, some deep ideation, and then sometime in the not too distant future, I will be back with startup #3 - another restaurant tech startup. Def feeling like Dimmi and me&u were incredible warm-ups for what lays ahead. Stay tuned.”

🥳️ Wins 🥳

Four space projects at UniSA received $18 million in funding as part of the $230m iLAuNCH program.

The funding coincides with the launch of an Advanced Manufacturing Metal 3D printing facility at VPG Innovation in Adelaide, which can produce titanium and nickel alloys for space technologies.

1. Space Components Using Electron Beam Melting to develop components suitable for space with quality titanium and nickel alloy parts.

2. Novel Materials for Optical Components and Satellite Sub-Assemblies

3. AI/ML-Enabled Space Surveillance System for Hypersonic Missile Defence

4. Development and Flight Qualification for an Australian Radioisotope Heating Unit (RHU) which is thermal management technology for lunar missions, ensuring equipment survives the harsh lunar night conditions.

Read more here.

🤑 Aussie Raisins 🤑 

🥽 Phoria, a VR studio and development agency is eyeing up a Series A after Apple Vision Pro launch (Capital Brief)

• The Melbourne-based studio has developed digital twin solutions, PropTech solutions and immersive educational content. The studio has bootstrapped itself for the last 10 years.

• The Series A is slated for a $9.2M AUD raise at a valuation north of $60M USD.

• The funds would be used to develop experience centres at museums, in classrooms and VR arcades with a pay-per-view business model.

📣 Notice Board 📣 

2024 Startup Muster survey is now open for submissions!

• If you are running a startup in Australia, or supporting startups in Australia (educators, investors, accelerators, incubators, co-working spaces, service providers, government, precincts and any other organisations supporting startups), the Startup Muster team is calling on you to contribute your data to the largest survey of Australia's startup ecosystem. The insights will us all help build a stronger Australian startup ecosystem into the future.

• Complete the survey here! 👈️ 

🧠 KaaS (Knowledge as a Service)

Gem’s Pick 💁‍♀️ Maggie Beer’s Big Mission - ABC

• This three-part docuseries shows Australian food icon, Maggie Beer, running a 16-week experiment inside a WA aged care facility to try and improve the wellbeing of its residents, with a focus on food and nutrition. I found it to be a really interesting (and shocking) insight into the complexities of trying to improve Australia’s aged care services and I couldn’t help but think about all the ways technology could play a greater role in reducing the administrative burden in this industry so that aged care workers can spend more time doing what they really want to do - providing quality care. You can watch it on ABC iview.

• 💡 Did you know… there are 5 different “texture modification” levels/ standards (from ‘regular’ right through to ‘liquidised’) for foods served in aged care facilities? That’s 5 variations that need to be created for every solid food served, every meal, every day… 🤯 .

Will’s Pick 💁‍♂️ The Contrarians Podcast - Blake Hutchison (Founder, Flippa) Interview

• I’ve recently been listening to The Contrarians Podcast with Adir Shiffman and Adam Schwab. It’s a fun listen, sorta like All-In, but very Australia-centred.

• On the most recent episode, they interview the founder of online business marketplace, Flippa. It was a fascinating insight into how content businesses (e.g. newsletters, YouTube channels, podcasts) are valued for sale. You can listen to the episode here: Apple / Spotify.

• Flippa has just launched a Data Insights dashboard for their private digital asset marketplace with some interesting information around valuation multiples, time to sell and buyer liquidity. Check out the dashboard here!

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‘Til next time,

👋 Will & Gem