💌 Aussie Startup & VC Summary | 29th March 2025

G’day and welcome to this week’s edition of Overnight Success - your weekly download on all the important things that have happened in the Aussie startup ecosystem. 🚀

This week was busy with seed and pre-seed fundraising announcements. We also had the federal budget released and the drama of StrongRoom AI going into administration within weeks of raising their $17M Series B.

👀 Headlines 👀 

😬 StrongRoom AI, which raised $17 million at a valuation of approximately $70 million a few weeks ago, is now in administration after its latest lead investor, EVP, called the police on their portfolio company to “pursue all avenues to recover the investment. " Here’s the full timeline 👇

• In 2017, StrongRoom transitioned from a university project to a startup, officially founded by Max Mito, Christopher Durre, and Kieran Start while they were students. StrongRoom AI was established to provide tools that assist health professionals in managing medication.

• In early 2021, StrongRoom AI was selected for the Boab AI scale-up program in Melbourne – an accelerator backed by the Victorian government’s LaunchVic. 

• StrongRoom AI continued gaining momentum and secured a substantial Series A funding round in 2022 involving existing and new investors. Tyson & Blake made a follow-on investment in June 2022 as part of this round. Other venture firms participated, including InterValley Ventures and Kalytix Ventures.

• By 2022, StrongRoom's software had evolved into a full-service pharmacy management platform with modules for medication dispensing, patient engagement (e.g., loyalty programs and reminders), and pharmacies' analytics. On March 13th, StrongRoom announced that it had raised a $17M Series B at a $70M valuation. EVP led this round via its $42 million evergreen fund, the EVP Opportunities Fund. The fund is managed by Misha Saul, who was set to join the StrongRoom AI board. From our research, this was the third investment by the Opportunities Fund. 

• A mere 10 days after the announcement, EVP called the police and stated it was “pursuing all avenues to recover the investment” due to " financial misrepresentations.” This AFR article broke the news. Media outlets reported that the issue could involve financial irregularities or misrepresentations discovered during due diligence, but no confirmation has been given.

• Days later, a StrongRoom investor from Tyson & Blake, who also sits on the board of StrongRoom, spoke to Capital Brief and expressed that he was 'in shock.' He called the move “unprofessional” and argued that it had “defamed” the startup, causing harm regardless of the investigation's outcome. Late on the 28th of March, The AFR reported that a specialist research and development financier has called in receivers to take control of StrongRoom AI's bank accounts. According to the corporate regulator, Walsh & Associates was brought in as administrators on Friday morning, the 28th of March. 

💰 The Aussie government gets a mark-up as PsiQuantum seeks a fresh $750M at $6B valuation (Startup Daily)

• The US-based quantum computing startup, co-founded by four expat Australian scientists, is raising at least US$750 million (~A$1.19B), led by BlackRock. It aims for a US$6B (~A$9.5B) pre-money valuation.

• PsiQuantum previously secured A$940M in loans and equity from the Australian and Queensland governments to build a quantum computer in Brisbane by 2027.

• The company also secured US$500M in funding from Chicago authorities to build a second quantum facility by 2028.

• The news follows an announcement that PsiQuantum is partnering with Australian startup Iceberg Quantum, which recently raised $2M led by Blackbird, to integrate fault-tolerant architectures into its platform. More on this in the startup raises below!

⛓️ Immutable is free: The SEC has formally closed its inquiry into Immutable with no findings of wrongdoing, allowing the Web3 gaming company to move forward without regulatory uncertainty. (Crypto News Australia)

• In late 2024, the US SEC sent a “Wells notice” to Immutable, part of its ongoing regulatory enforcement approach aimed at major companies in nearly every Web3 sector. Along with Immutable, companies like Coinbase, Consensys, Ripple, OpenSea, and Crypto.com have also encountered heightened SEC scrutiny, particularly in the months leading up to the US election.

🐼 The federal government released its budget for 2025-26, and startups and innovation largely fell off the docket. For example, “Pandas” were mentioned five times more often than “innovation.”  

• One change of potential note was the ban on non-competes when worker earnings were below $175,000. (AFR)

• Early-stage investors like Flying Fox Ventures argue that while non-competes are rarely enforced, they provide critical protection in founder-led startups where talent is the core asset. Removing them could destabilise ventures and undermine capital committed during key growth phases.

• Some founders call for a complete non-compete ban to boost innovation. UpCover co-founder Anish Sinha supports a complete ban, saying it would unlock high-impact talent and accelerate startup creation.

🐨 Koala looks to IPO as it preps a non-deal roadshow seeking to raise $100M (AFR)

• Koala, launched as a mattress company, has transformed its core category into sitting furniture, with 33% YoY growth and $240 million in net revenue from that category alone. 

• The company is now international, with Japan contributing 25% of sales, while Australia and the US account for 59% and 16%, respectively.

• For non-bankers, a "non-deal roadshow" (NDR) consists of a series of meetings between company management and investors, mainly focused on providing information and building relationships without intending to offer or sell any securities. It is a bit like a get-to-know-you networking or speed dating event. 

🏦 Commbank launches Seattle Tech Hub to boost AI leadership (Innovation Aus)

• Initially, the focus will be on implementing AI systems to support small business customers. 

• Strategically, the location enables CommBank to collaborate with global tech giants like Microsoft and AWS, where CommBank teams will participate in three-week exchanges. 

⚡️ Startup Retro ⚡️

Project Manda raises $2M pre-seed to kill off unnecessary meetings in the enterprise

Founders: Ed van Roosendaal and Ash Farrugia

AI-powered startup Project Manda has raised $2 million in pre-seed funding to tackle the high cost of unproductive meetings. Founded by Ed van Roosendaal and Ash Farrugia, the platform uses AI-driven coaching, agenda feedback, and integration with tools like Teams and Slack to help organisations cut unnecessary meeting time by 10–15%, saving millions in the process.

The funding round, led by Tech Labs Capital and Black Sheep Capital, also attracted angel investors like Google VP Paul Limbrey and Melbourne’s Peter Yunghanns and David Williams. 

Project Manda’s clients include Domain, which has reported ~$600,000 in annual time savings from hosting fewer meetings. After analysing more than 160,000 meetings at Domain, Project Manda discovered that the company spent approximately $36.4 million annually on meetings, equivalent to 14% of total operating expenses.

The platform’s success has prompted the founders to set their sights on expanding into the U.S. market.

Due Diligence: Startup Daily, AFR

Iceberg Quantum raises $2M pre-Seed for better quantum architecture

Founders: Dr Felix Thomsen, Larry Cohen, and Sam Smith

Iceberg Quantum, a Sydney-based quantum computing startup, has secured $2 million in pre-Seed funding to develop faster, more cost-effective fault-tolerant quantum architectures. 

Founded just nine months ago by Dr Felix Thomsen, Larry Cohen, and Sam Smith—former PhD students at the University of Sydney. The round was led by Blackbird, with additional support from UK-based LocalGlobe, and follows Iceberg’s participation in Blackbird’s Foundry program.

Current quantum computers often need thousands of physical components to handle errors, which makes them expensive and slow to reach their potential. Iceberg Quantum focuses on a newer, more efficient method of error correction called LDPC (low-density parity-check) codes. These codes reduce the amount of hardware needed, making it more practical to run large-scale, error-free quantum computations sooner rather than later.

The startup has also partnered with PsiQuantum, which is working to build a utility-scale quantum computer in Brisbane by 2027. Iceberg’s LDPC-based designs aim to enhance PsiQuantum’s photonic platform, making fault-tolerant quantum computing more accessible and affordable. 

Due Diligence: Startup Daily, Iceberg Quantum Blog

Carma raises $30M convertible note on the road to IPO for its used cars platform

Founders: Yosuke Hall and Lachlan Macgregor

Sydney-based automotive startup Carma has raised a $30 million AUD convertible note to accelerate its mission to transform Australia’s pre-owned car market. The round was led by Regal Funds Management and Tiger Global, with continued backing from General Catalyst and Five V Capital. 

Founded in 2021, Carma offers a seamless online experience for buying and selling used cars, complete with AI-powered pricing, integrated financing, free delivery, and a 7-day return policy. The new capital will be used to expand inventory, scale its ‘Sell-to-Carma’ feature, and grow its in-house vehicle reconditioning facilities, where over 50 experts ensure every car meets strict quality standards.

For buyers, Carma provides a curated selection of quality-assured pre-owned vehicles, each undergoing a thorough multi-stage inspection and reconditioning process by a team of experts. Customers benefit from a 7-day trial period, a 3-month warranty, and the convenience of home delivery or pickup, eliminating the need to visit a dealership.

Sellers can take advantage of Carma's 'Sell or trade in' feature, which offers a fast and secure way to sell their cars. By leveraging AI-backed pricing, Carma provides competitive and accurate offers with quick turnaround times, streamlining the selling process.

With over 5,000 customers served, Carma is tapping into growing consumer demand for convenience, transparency, and trust in car buying without needing physical dealerships. The company is positioning itself as Australia’s answer to the US’s booming digital automotive players, aiming to capture a significant share of the $69 billion pre-owned vehicle market.

Due Diligence: AFR, Capital Brief

Pluralis Research raises $7.6M Seed for open source AI development

Founders: Alexander Long

Melbourne-based AI research organisation, Pluralis Research, has raised $7.6 million in Seed funding to scale its ambitious vision of decentralised, open-source AI development. The round was led by Union Square Ventures (USV) and CoinFund, with backing from Topology, Variant, Eden Block, Bodhi Ventures, and angels including Balaji Srinivasan and Hugging Face CEO Clem Delangue.

Founded by Alexander Long, Pluralis is pioneering a new approach to AI model development called Protocol Learning. Unlike traditional centralised training, where models are built and stored in one place, Pluralis distributes the training process across a decentralised network. The models are never fully materialised at any one point—instead, they exist only within the protocol itself. This creates an entirely new way to enable collaborative development and reward contributors programmatically, ensuring value flows directly to those participating in training.

Pluralis positions itself as part of a broader movement toward decentralising AI infrastructure and reducing reliance on proprietary systems. With new funding in hand, the company plans to grow its team and double down on development. As concerns around closed AI models grow, Pluralis aims to offer a transparent, community-driven alternative for building the next generation of large-scale AI systems.

Due Diligence: FINSMES

EntroMat lands $1M to build out advanced manufacturing metal alloys 

Founders: Professor Christopher Berndt, Dr Ashok Megwhal, Greg Lindsay (CEO) and Associate Professor Andrew Ang

Melbourne-based startup EntroMat has raised $1 million in co-investment from Breakthrough Victoria and Swinburne University to advance its development of High Entropy Materials (HEMs)—next-gen metal alloys engineered for extreme strength, durability, and resistance to heat and corrosion. 

The funding is evenly split between Breakthrough Victoria and Swinburne, as part of a broader $100 million University Innovation Platform to commercialise research across Victoria.

Founded by a team of researchers including Professor Christopher Berndt and Dr Ashok Megwhal, EntroMat is focused on producing advanced metal powders for use in industries such as aerospace, energy, mining, and medical technology. 

Their HEMs are designed for modern manufacturing techniques like additive manufacturing and powder metallurgy, enabling applications ranging from hydrogen fuel systems to surgical implants and high-temperature aerospace parts.

EntroMat has already attracted commercial interest, signing a Letter of Intent with Queensland-based D&T Hydraulics to develop a prototype HEM product for remanufacturing hydraulic cylinder rods. With the backing of institutional and state support, EntroMat is positioned to help transform the materials landscape, bringing high-performance alloys from lab to factory floor. Breakthrough Victoria CEO Rod Bristow called the technology a “game-changer” for industries demanding stronger and more sustainable materials.

Due Diligence: SmartCompany, Business News Australia, Au Manufacturing, Breakthrough Victoria Investment Notes

DeteQt lands $750K pre-Seed to make quantum-powered sensors

Founders: Professors Jim Rabeau and Omid Kavehei

DeteQt, a University of Sydney spinout developing diamond-on-silicon quantum sensors, has raised $750,000 in pre-Seed funding led by Main Sequence Ventures and ATP Fund. Founded by Professors Jim Rabeau and Omid Kavehei, the startup leverages nitrogen-vacancy diamond technology combined with standard silicon chip fabrication to create highly sensitive, scalable quantum magnetometers.

DeteQt’s technology addresses critical limitations in navigation, healthcare imaging, and mineral exploration, offering quantum-level sensitivity at silicon-scale costs. In navigation, their sensors can provide accurate positioning in environments where GPS is unavailable, such as underwater or in tunnels. For mining, the sensors can detect minerals more effectively, leading to cost savings. In healthcare, they could enable portable MRI machines, making advanced imaging more accessible.

Early traction includes a $3 million contract with the Australian Defence Force for GPS-denied navigation solutions, alongside partnerships with Fleet Space for enhanced mineral detection and OneScan in the US to explore portable quantum MRI systems.

Due Diligence: AU Manufacturing, Startup Daily

Gaia Project Australia raises $1M for vertical farming technology with ~40% increased yields

Founders: Nadun Hennayaka, Dr Alex Stumpf and Adam Console

Gaia Project Australia has secured $1 million from La Trobe University’s Eagle Fund, a collaboration with Breakthrough Victoria, to scale its Omni-System vertical farming tech. The tech promises 40% higher leafy green yields than conventional indoor systems. Co-founded by CEO Nadun Hennayaka with researchers Dr Alex Stumpf and Adam Console, Gaia’s technology significantly lowers both startup and operating costs for growers, aiming to redefine controlled environment agriculture globally.

Gaia’s system is designed to deliver consistent, affordable fresh produce amid rising global food prices. Deployments are already underway in Australia, India, and Sri Lanka, and a full-scale launch is planned for later this year. The investment comes despite recent setbacks in the vertical farming industry, following the high-profile failures of US-based Plenty and former unicorn Bowery Farming.

The Eagle Fund, a joint venture between La Trobe University and Breakthrough Victoria, targets startups commercialising La Trobe research, particularly in Agtech, healthtech, and AI. Mandalay Venture Partners and LaunchVic also joined the Gaia funding round.

Due Diligence: Business News Australia

Hachiko secures $1M pre-seed to develop battery optimisation and trading platform

Founder: Rakhesh Martyn

Sydney-based energy startup Hachiko has raised pre-seed funding led by Twynam Ventures to develop its advanced battery optimisation and portfolio management platform. Founded in 2024 by energy veteran Rakhesh Martyn, Hachiko aims to simplify the management of distributed battery systems, dramatically boosting profitability by up to 50% and speeding up renewable adoption in Australia’s unscheduled energy sector.

The platform simplifies the complexities associated with funding, deploying, and operating battery storage systems. It provides standardised connections compatible with various battery vendors and site configurations, facilitating efficient site onboarding. Additionally, it enables real-time performance simulations, allowing users to assess potential investments and test trading strategies before implementation.

Hachiko's solution is designed for project developers, energy traders, investors, and energy-as-a-service companies, providing tools to accelerate project timelines, optimise returns, and deliver configurable solutions to clients. Hachiko’s platform could help eliminate up to 157 million tonnes of CO2 emissions annually by 2050. It is already attracting interest from major Australian developers. 

With fresh capital secured, Hachiko plans to accelerate platform development, targeting key challenges currently unmet by existing market solutions and enabling faster deployment of renewable battery storage across Australia and beyond.

Side note: Hachiko is the name of a Japanese Akita dog that waited for 9 years outside the train station, where it would meet its owner each night after its owner unexpectedly died at work. Wikipedia page

Due Diligence: Smart Company, Twynam Investment Notes

🎉 Vibe Check🎉 

🦄 📈 Private unicorn shares like Airwallex and Canva are now accessible on trading platforms (AFR)

• Platforms like Forge Global, EquityZen and Notice allow retail investors to trade shares in unlisted companies like SpaceX, OpenAI, and Airwallex, with a minimum trade size around $8,000. They're not regulated exchanges, but act as secondary markets.

• Forge Global has partnered with Yahoo Finance (US only for now) to show real-time pricing data on private companies. Australians must still use Forge directly.

• These trades come with high fees (2–5%), and buyers must meet US investor criteria (income over US$200k or net worth over US$1m), which are less strict than Australia's sophisticated investor test. Currently, the trading volumes are very low—e.g., only 10 trades in Airwallex since Feb 2024—so price transparency is limited. Retail investors may pay more per share than institutional buyers due to supply-demand dynamics.

📆 Notice Board 📆 

📣 Sunrise Australia 2025 has just dropped its BIGGEST speaker lineup yet!

• Hosted by our friends at Blackbird, Sunrise isn’t just another startup event - it’s a two-day celebration of exceptionalism in Australia and New Zealand where you can immerse yourself in our startup community, become a part of it, and help to shape it. 

• 🎟 Tickets are selling fast! Check out the unmissable lineup & grab your tickets before they’re gone here.

• 📅 April 30 – May 1 | 📍 Carriageworks, Sydney

The best place to find upcoming events to attend, and promote any events you’re hosting in the ANZ Startup Events Calendar.

Would you like to promote an event or an opportunity? Enquire about a Notice Board promotion here.

🧠 KaaS (Knowledge as a Service)

Will’s Pick 💁‍♂️  Tim Doyle on Raising $100M+ for Eucalyptus - podcast

• Super entertaining podcast with Tim and Abhi. Tim is full of insight about the fundraising process, which is delivered in a brutally honest way.

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‘Til next time,

👋 Will & Gem

🔨 Tool Box 🔧 

We’re often asked for recommendations for tools, agencies, and evening upskilling opportunities. We’ve contacted a few of our favourite tools and people and secured some discounts for you! Our community.