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’ve joined us since last edition…! 👋 

In 2024, we have out sights set on some pretty ambitious growth. Each month, we’ll be keeping you up to date on how we’re tracking against our goal of reaching 10,000 subscribers.

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👀 Headlines 👀 

👋 Co-founder, Bradley Ayers exits $960M customer research startup Dovetail

• Dovetail was founded 7 years ago by two ex-Atlassian design engineers. Key investors include Accel, Blackbird, Felicis Ventures and Slack founder Stewart Butterfield.

• As of early 2022, the startup had founders owning 66% after selling some shares during an $89 million raise at a $960 million valuation.

• Check out Ayer's heartfelt reflection on the inception of Dovetail in Wynard Park while enjoying a bowl of noodles.

🥰 Tech Council CEO, Kate Pounder departs

• The founding CEO of Tech Council of Australia, Kate Pounder, resigned after 3 years of successfully growing the lobby group into the critical industry body it is today.

• Pounder has been praised for her success in advancing the interests of the industry; notably by her influential role in the government’s decision to set a target of 1.2 million tech-related jobs by 2030.

• Stepping down due to family commitments, Pounder hopes to continue to champion the industry in a personal capacity. We look forward to seeing what Kate does next!

🧪 Science & Technology Australia (STA) pushes to strengthen Australian Research Council Amendment Bill

• STA has submitted 10 recommendations to the Federal parliament to strengthen the legislation, including a call for successful grant applicants to be notified within 21 days of approval by the Australian Research Council Board.

• STA CEO Misha Schubert said the sector strongly backs the bill and hopes it will eliminate lengthy delays and needless stress, saying “Deadlines focus minds. And they keep bureaucratic processes on track”. Check out the details of the proposed bill here.

👛 Bitcoin ETF approved by the US SEC

• Approval of an ETF bitcoin signals maturation and mainstream engagement of the cryptocurrency market.

• This article provides a great summary of the context of this announcement and what it could mean for us locally. While this podcast from the Wall Street Journal breaks down the 10 year journey that lead to this event.

🤯 🖊️ Petition to reassess proposed 'Sophisticated Investor' framework hits OVER 1000 signatures

• It’s great to see so many OS subscribers signing the petition as it gains momentum.

• Following the 1000 signature milestone, Sam Almaliki, Founder of Regional Angel Investor Network, wrote an open letter to the government outlining the interests and goals of the petition here.

⚡️Startup Retro⚡️

VAPAR opens the tap with $5M for its AI sewerage inspection solution

Founder: Michelle Aguilar & Amanda Siqueira

Sydney-based deep tech, VAPAR, has secured $5 million in funding to drive its expansion into North American markets. The funding round was led by PureTerra Ventures (a Dutch water technology specialist) and supported by Autodesk, Halma Ventures, Access Capital Ventures and Metagrove Ventures. Brisbane-based Sprint Ventures, who invested in the $2.5 million 2022 Seed round, followed on.

The North American market is ripe for disruption with $88 billion USD spent annually on unplanned pipe repairs; only set to worsen with increasingly intense weather events and pressures of the growing global population.

Co-founder Siqueira identified the opportunity during her experience in the laborious and error-prone work of manually reviewing sewer inspection videos. The pair co-founded VAPAR in 2018 in pursuit of more effective solutions. VAPAR utilises AI technology and machine learning to automatically inspect pipe maintenance footage and provide insights on potential issues.

Informing 20,000 pipe investment decisions to date, the company has substantial revenue growth with customers, including global utilities across Australia, New Zealand, and the United Kingdom. Customers include British Water, Transurban, and the NSW Government.

Due Diligence: Smart Company

Critical close $1.5M Seed investment to transform plastic waste into recyclable materials for interiors

Founders: Rui Peng & Adam Ransfield

New-Zealand based startup, Critical, has secured a $1.5 million Seed investment led by Soul Capital. Also included in the round was K1W1, Anglican Care Waiapu Limited, The Clare Foundation, Whakatupu Aotearoa Foundation, VOW Foundation and Startmate.

Co-founded in 2018, Critical is on a mission to reduce the built environment's carbon footprint. The company produces 100% recycled plastic panels that are made from reclaimed plastic waste. The panels come in a variety of pre-designed or custom colours and finishes.

Rui Peng, co-founder and trained architect, is focused on offering a product that is both desirable and low carbon. Critical is targeting the massive 11% of global carbon emissions produced by building materials. Locally, building materials contribute 20% of New Zealand's carbon emissions.

Due Diligence: LinkedIn

Sonder banks $16M Series B extension round to continue growth of employee wellness platform

Founders: Craig Cowdrey, Peter Burnheim & Christopher Marr

Workplace wellness platform Sonder, which empowers employees to take control of their wellbeing, has banked another $16 million led by the SEEK Growth Fund, and joined by existing investors Blackbird, Saniel Ventures, and the company’s first angel investor in 2017, Scott Bailey. The company was reportedly raising at a pre-money valuation of $235 million, up from a $150 million valuation in 2022. The company reportedly nearly doubled its revenue in FY22 to 2022 to $15.4 million.

Sonder started out as an international student safety business, with the app offering 24/7 health and safety content and resources for its users. During COVID, the company pivoted to an employee-focused mental and physical health and safety services platform, signing various corporate clients including Woolworths, McDonald’s, Team Global Express, Bingo, and Allianz. To differentiate itself from competitors, Sonder’s live chat functionality has an average response time of 9 seconds and is used by 94% of customers. Interestingly, 57% of support is provided after hours. The platform also offers in-person support with a network of responders who can help in special circumstances.

The new capital will fund the company’s ongoing growth in Australia and New Zealand, as well as its UK expansion. Sonder is actively hiring and expanding into new markets whilst chasing profitability in the next 12 months.

Due Diligence: AFR

Ultra Violette secures $15M to expand SPF skincare globally

Founders: Ava Chandler-Matthews & Rebecca Jefferd

Melbourne-based sunscreen company, Ultra Violette has secured $15 million in funding from New York-based Aria Growth Partners, marking the first external funding that the 5-year-old business has received.

Ultra Violette identified a gap in the SPF market for a trendy and high quality product. Much of the company’s success has come from designing products that are specifically made to be worn with other cosmetics products (see their trademark Reapplication Mist Skinscreen) - making SPF both practical and “cool”. The business is rumoured to have grown by over 100% each year since its launch and is primed for expansion.

The founders hope the fresh American capital will be somewhat strategic. Aria Growth are experienced consumer investors with pathways to market in North America. The partnership is already bearing fruit with a launch into Sephora in Canada in March pegged for this year.

Due Diligence: Smart Company

Willow raises $18.2M from existing shareholders to create digital twins of the built world

Founders: Dale Brett & Joshua Ridley

Property and infrastructure software start-up Willow has raised over $18.2 million in a recent equity round from existing shareholders to bolster its financial position.

Willow creates digital replicas, known as "digital twins", of real-world properties and infrastructure like buildings and airports. These digital twins help owners and managers make better decisions by providing a virtual representation of the physical assets. This allows for improved management of operational efficiency and helps to reduce risk. Major projects include digital twins for Dallas Fort Worth Airport, US retailer Walmart, as well as a new cloud sustainability agreement with Microsoft.

The company had flagged the need for fresh funds in its FY23 accounts, reporting a loss of $64.4 million and a cash balance decline from $42 million to $22 million over the financial year.

Due Diligence: AFR

Kry10 lands $6M pre-Series A to enhance the security of connected devices

Founders: Boyd Multerer & Jason Fox

Wellington's Kry10 has raised $6 million in a pre-Series A round led by Sydney's Folklore Ventures, who bought a 10% stake. This round included investments from VCs like Movac, Nuance Connected Capital, and Rotomā No. 1 Inc, alongside Virginia's In-Q-Tel.

Kry10 is focusing on securing connected devices against cyberattacks. Co-founded by Boyd Multerer, known for his work on Xbox Live, Kry10 aims to use advanced computer science to protect the growing number of connected devices, which is projected to reach 75 billion by 2025.

Multerer has based Kry10 in Australasia to utilise the region's expertise in formal methods. Kry10's Operating System (KOS) especially targets the automotive industry, addressing security needs in this rapidly evolving sector. Kry10's technology is set to be crucial in securing diverse connected devices worldwide as the IoT domain expands.

Due Diligence: NZ Herald

🤑 Aussie Raisins 🤑 

evee, an electric car sharing platform, has commenced its Series A raise

• evee began operations in 2016 and has grown to have over 8,000 customers and 200 vehicles across Australia and New Zealand with its EV rental marketplace. The platform has experienced 2.6x annual growth for 3 years in a row.

• In early 2023 the company maxed out a crowdfunding raise at $1.6 million and in 2024, evee hopes to hit the global stage, starting with the UK and Europe, where the soaring electric vehicle rental market is worth an estimated AU$700 million. Check out this video for more background and reply to this email if you want a warm introduction to the founder!

🎉Wins 🎉 

The Builders Club announces its Summer Sprint Demo Day startups!

• These new AI startups will be gearing up to hit the demo stage! Cheers to Annie Liao for sending this one to us (on a public holiday, no less!).

Press Play Ventures kicked off its first accelerator cohort with a bang

• The new pre-Accelerator Program has welcomed an incredibly diverse cohort of 40 teams with 50 founders - of which 46 are women.

NORMAL partners with major Aussie influencer Abbie Chatfield to launch new sex toy range

• A collaboration that stems from shared values and a vision for promoting shame-free and informed intimacy experiences for everyone.

• Founder Lucy Wark’s skillset would’ve left no space for a bum-deal on this negotiation! 😉 

Fable Foods Philly Shroomsteak is making waves in the US

• Fable Food Co has launched its Philly Shroomsteak at US-based Mendocino Farms in an exciting collaboration.

Linktree hires machine learning experts to help leverage AI for personalised user experiences

• Linktree is integrating artificial intelligence into its offerings with the hiring of Martin Gould and Johnny Hunter, UK-based machine learning experts with backgrounds in audio detection. Linktree is currently focusing on growth in the US market.

Aquila completes a successful trial of its wireless drone tech

• Taking place in regional Victoria, Australian-New Zealand deep tech startup Aquila has developed tech (coined ‘Lightway’) to charge drones over a distance of 50 metres, wirelessly.

• Aquila has long term plans of offering affordable and clean energy solutions on a global scale.

Carnegie Clean Energy proves the feasibility of net-zero salmon

• An Australian first in sustainable aquaculture, Carnegie Clean Energy (CCE) has successfully tested the concept of using ocean swells to generate electricity for floating salmon farms, potentially leading to net-zero salmon production.

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

📌 Notice Board 📌 

Linktree x Side Stage Ventures (Tech) Founder Meetup - Thursday 1st Feb 📍Melbourne

• US-based Linktree CTO Farnaz Azmoodeh will be chatting with Ben Grabiner of Side Stage Ventures. Register here.

  • Topics include Farnaz's journey, market state, managing top tech teams, AI and tech trends.

Who’s Startup is is Anyway - tickets now on sale!

• In a one-of-a-kind format, dreamed up by the infamous Julie Trell, startup founders will pitch their ideas and then improvisers will turn those pitches into comedy gold.

• Don’t miss the action at Improv Theatre Sydney, 7pm 24 February 2024 - get your ticket here!

New FREE CSIRO Accelerator - applications now open!

• The CSIRO Lindfield Collaboration Hub's GAP BLITZ Program, facilitated by Joanne Jacobs and Gavin Heaton from Disruptors Co, is a 12-week initiative starting on 19 February 2024.

• Applications close on 5 February 2024. Apply here.

The State of Aussie Startup Funding Report 2023 - Thursday 22nd February📍 Melbourne

• Hosted by Cut Through Venture and Folklore, join founders, investors and the Melbourne startup community at the Wade Institute of Entrepreneurship to discuss the themes and findings of the 2023 report. Register here.

🧠 KaaS (Knowledge as a Service)

Gemma’s Pick 💁‍♀️ What to avoid in a startup advisory Board by Luke Rix

• I found this to be a super practical and valuable LinkedIn post from Luke Rix (CEO & co-founder of KC Ventures), especially for someone currently “flirting” with the idea of building a startup advisory board in the not-too-distant future. He outlines the four most common mistakes he’s seen startups make in the process of putting together their advisory boards - well worth a read for early-stage founders!

Will’s Pick #1 💁‍♂️ The Idea Adoption Curve by Ben Thompson

• I found this short essay super interesting during the week. The article explores the Idea Adoption Curve building on the more familiar Tech Adoption Cycle framework. The article then explores how this cycle can be seen in media and how media organisations monetise.

Will’s Pick #2 💁‍♂️ Novo Nordisk (Ozempic) by Acquired (podcast)

• Very interesting listen about a company I knew nothing about, in an industry I knew nothing about, on a topic I knew very little about. Check it out!

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‘Til next time,

👋 Will, Gemma & Kate