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 73 new subscribers that joined us this week, it’s great to have you here!

ICYMI: We’ve launched a podcast! 🎙️

The Startup Retro is released weekly on Mondays and covers the biggest stories of the past week, with some insightful banter* and insider knowledge from us (Will & Gem) to make it even more enjoyable to learn about what’s happening across the Aussie startup ecosystem.

Episode 2 is out Monday. Tune in to hear about the new merch competition we’re running for early listeners and supporters of the pod! 👀 

*Will has banned the use of the term “hot takes” - we’re opening up the virtual suggestion box for synonym ideas. 📥️ 

👀 Headlines 👀 

🏧 Open banking under scrutiny from the incumbent banks (Capital Brief)

• Open banking, known as the Consumer Data Right (CDR) in Australia, which enables customers to better control and share their financial data via APIs, was a key inflection point for the emergence of many Aussie FinTech startups.

• The scrutiny from banks, who have been the largest contributors to the funding of the ecosystem, centres around a new report from the Australian Banking Association claiming that only 0.3% of banking customers (~197,000) are using open banking and that despite their investment, the system hasn’t lived up to expectations.

• Fintech Australia responded with a report co-authored by Basiq, “Australia’s leading open banking platform”, which claimed their company alone had facilitated over 900,000 open banking connections for Australian customers, publicly challenging the ABAs pessimistic narrative.

🤖 The Tech Council predicts 200,000 AI jobs by 2030 (Smart Company)

• According to the Meeting the AI Skills Boom report created with Microsoft, LinkedIn and Workday, Australia’s AI workforce was 800 strong in 2014 and has grown to 33,000 in 2023. 

• The report says that Engineers, Cybersecurity and Data Analysts are the most important functions, but also shows that almost anyone looking for a job in tech in the coming years, in particular at an entry-level, will need AI-knowledge and competencies.

 ⚡️ Startup Retro ⚡️

Redactive AI lands $11.5M Seed for ‘permissioned dev tools’ for the enterprise 

Founders: Andrew Pankevicius, Alexander Valente and Lucas Sargent

Redactive AI, a Melbourne-based developer platform, announced an $11.5M AUD Seed round co-led by Felicis and Blackbird, with participation from Atlassian Ventures and Zapier. Founded in September 2023 by ex-Atlassian product managers Andrew Pankevicius and Alexander Valente, along with AI engineer Lucas Sargent, Redactive AI addresses a critical gap in AI engineering and security skills within enterprise software teams.

Redactive's platform empowers enterprises, particularly in regulated industries, to build and maintain secure generative AI applications. Two large Australian financial services organisations, each supporting over 500 employees in deploying AI use cases, are already using the platform.

Unlike generic AI tools, Redactive ensures enterprises can develop AI solutions that meet strict security and privacy requirements. The company’s approach integrates permission access control and data security into its AI development platform, making it easier for enterprises to bring AI applications to production (and feel secure!).

With the new funding, Redactive plans to expand its team in Melbourne and San Francisco, targeting a headcount of 15 by the year's end. The company aims to support more enterprises in their AI initiatives, ensuring security and compliance.

Due Diligence: Forbes, Startup Daily, Redactive Blog

Millibeam lands $6M for super fast 5G 

Founder: Venkata Gutta

Millibeam, a NSW-based chipset designer has raised $6 million to advance its innovative chipsets for “mmWave” 5G, a frequency offering speeds up to 26 times faster than standard 5G but with limited range. Breakthrough Victoria and Main Sequence each contributed $3 million.

Millibeam's founder, Venkata Gutta, aims to make mmWave 5G more affordable with their Farbeam chipset, which integrates radios for both mmWave and low-spectrum 5G within a single processor, reducing costs significantly. This technology targets base station manufacturers (those big mobile phone towers) like Ericsson and Nokia.

Founded in 2021 and initially funded with $750,000 from Main Sequence, Millibeam operates in Sydney with a design team in Melbourne. Previous funding includes support from Main Sequence, Archangel, and a $2 million grant from the Department of Industry's Supply Chain Resilience Initiative.

Millibeam, currently employing 20 staff, plans to hire nine more engineers and technicians with the new funds.

Due Diligence: AU Manufacturing, Capital Brief

ReciMe raises $1.5M Seed to expand recipe-sharing app into the US market

Founders: Christine Nguyen, Ivy Nguyen and Will Kent

ReciMe, a Melbourne-born and US-based cooking app, has raised $1.5 million in a Seed round to expand into the US market, backed by former Yahoo CEO Marissa Mayer and other prominent investors. The company was founded during the COVID-19 lockdown by sisters Christine and Ivy Nguyen and their friend Will Kent. 

ReciMe launched in late 2021 and previously secured $500,000 in pre-Seed funding. Existing investor Even Capital led the latest round, with support from Mayer, Ancestry.com CEO Deb Liu, Letterboxd founder Karl von Randow and Paul Greenberg.

The app, which helps home cooks organise, share, and shop recipes, has over 500,000 users in the US. Its most popular feature is a smart importing tool that aggregates recipes from various sources. Refocusing on the smart recipe importer feature tripled user retention and drove a 20x increase in subscribers and revenue with a new subscription model.

Due Diligence: Startup Daily, Womens Agenda

Profit Peak secures pre-Seed for e-commerce analytics platform that improves profitability 

Founders: Carla Kahn and David Kahn

Profit Peak, an innovative analytics software for e-commerce businesses has raised an undisclosed pre-Seed round with support from Black Sheep Capital. Founded by experienced e-commerce operators and husband and wife team, Carla and David Kahn, Profit Peak aims to optimise profitability by addressing the challenges faced by online retailers in measuring and managing their profit margins.

E-commerce brands often struggle with profit optimisation due to fragmented data from various advertising platforms, reliance on ROAS metrics that ignore key cost factors, and siloed inventory management. Profit Peak solves these issues by integrating sales channels, ad spend, inventory data, and other expenses into a single platform, providing real-time insights into customer journeys and profitability.

The software, native to Shopify and Magento, can be installed in 15 minutes. It allows users to upload a pro forma P&L and analyse profitability across their inventory. This enables e-commerce businesses to make informed decisions that drive profit-led growth.

The founders, previously led two market-leading Australian e-commerce brands to successful exits and developed Profit Peak to address the lack of tools that combine inventory analytics with ad data. You can join the beta waitlist here. 

Due Diligence: Black Sheep Capital Investment Notes

Caresquare lands $300,000 Seed investment at $3M valuation for NDIS plan management workflow automation tool

Founder: Joshua Suntup

Caresquare, a Sydney-based platform for National Disability Insurance Scheme (NDIS) plan managers that leverages AI to streamline operations, has secured a $300K Seed investment. The investment comes from Ace Venture Studio. Ace purchased 10% of the cap table for a post-money valuation of $3M. 

The Caresquare platform provides bespoke software for NDIS Plan Managers to manage processes, invoices, claims and approvals. The raise follows criticism that the NDIS, a federally funded government program, is facing a $42 billion cost blowout in fiscal 2024.

Suntup, a self-taught coder who previously worked at HospoPay, reports that Caresquare is already profitable, generating around $500,000 in annual recurring revenue (ARR). Since exiting private beta testing in May, Caresquare is now used by six plan management companies and is being trialled by two leading plan management firms in Australia. The startup estimates a total addressable market within the NDIS at $50 million and sees potential applications in adjacent sectors like aged care and private health insurance.

Due Diligence: AFR

Dash Technology Group secures $22M for financial planner platform

CEO: Andrew Whelan

Sydney-based fintech, Dash Technology Group, has secured $22 million in a funding round led by Bailador Technology Investments. The fresh capital will aid in expanding its software services for financial advisers and lowering the cost of financial planning advice. 

This funding boost brings Dash's total amount raised to $52 million, with an undisclosed but significantly higher valuation than its previous raise in December 2022.

Formed from the merger of Wealth02 and ROAR software in April 2022, Dash facilitates the entire financial advice process and manages over $4 billion in assets on its platform. The company has seen 63% revenue growth in the first half of the year. The new funds will support research and development and the hiring of 20 new staff, increasing the size of its current team of 84.

Due diligence: AFR Startup Daily

Sendle lands $16M at USD$60M valuation for small business shipping platform

CEO: James Chin Moody  

Delivery start-up Sendle, having previously raised nearly $90 million, secured $US11 million at a $US60 million valuation. The funding was led by Federation Asset Management who has set a 4x preference return on their investment for the round. 

While abnormal in Australia, round terms are more common in the US, where Sendle does the majority of its business. He emphasised the goal of simplifying the capital structure and extending investment opportunities to all shareholders. The raise aims to propel US operations towards profitability by mid-next year.

Sendle offers door-to-door package delivery for small businesses, leveraging big business delivery networks to provide affordable, reliable, and 100% carbon-neutral shipping services. With features like free pickup, easy drop-off, and powerful eCommerce integrations, Sendle simplifies logistics for small businesses, making shipping efficient and eco-friendly.

Due diligence: AFR

Marketboomer builds with $4.9M of growth capital for hotel procurement marketplace

CEO: Malcolm Jull

Sydney-based B2B hospitality supplies platform Marketboomer has raised $4.9 million, led by Salter Brothers Tech Fund. Marketboomer, founded in 1995, operates in 23 countries with over 10,000 monthly buyers and 20,000 suppliers, providing cloud-based procurement solutions for hotels and organisations like IHG, Accor, and Qantas. 

Marketboomer provides a cloud-based procurement platform for the hospitality industry, enabling hotels and organisations to manage and automate purchasing, inventory, and invoicing, leading to significant cost savings.

The funding will support Australian market resources, expansion in South East Asia and the UK, and liquidity for existing investors. Salter Brothers Tech Fund and co-investors will take a 20% stake, aiming to leverage collaborative synergies and expand across the Salter Brothers Hotel Group portfolio.

Due diligence: Startup Daily

Gelomics snags $2.2M pre-Seed for animal-free research 

Founders: Dr Christoph Meinert and Peter Levett

Brisbane-based biotech startup Gelomics has raised $2.2 million in a pre-Seed funding round to support its animal-free pharmaceutical research initiatives. The round was led by Jelix Ventures, along with QIC Enterprise Acceleration Fund and Angelloop. This funding will facilitate the creation of over 70 highly-skilled jobs over the next five years and drive the company's expansion into the US market.

Gelomics has developed a revolutionary 3D tissue culture system that enables the growth of human tissue models, from beating hearts to tumour tissues, in a lab setting. This technology offers a more ethical, reliable, and cost-effective alternative to traditional animal testing methods, significantly improving the accuracy of preclinical studies.

The funding follows strong market viability, boasting an impressive demo-to-sales conversion rate of over 80% and securing more than 250 returning customers across 22 international markets. The technology has the potential to reduce financial losses, shorten the time to market, and eliminate the need for animal testing. 

Over 200 million animals are euthanised annually for research, yet more than 90% of drug candidates that succeed in animal trials fail in human trials. Dr Meinert described Gelomics' technology as a paradigm shift in medical research, offering scalable human tissue models compatible with current automated systems. The new funding will be used to accelerate product development, expand the team with top-tier talent in Brisbane, and implement a strategic market penetration plan in the US.

Due diligence: Innovation Aus, Capital Brief, Business News Australia

Sable Rubber Technologies lands $2M for rubber recycling market

CEO: Reuben Hanson

Sable Rubber Technologies is gearing up for an IPO within the next year, buoyed by a $2 million capital raise and a $4 million ongoing raise. The Brisbane-based company, backed by Sequoia and other investors, is poised to revolutionise the rubber recycling market with its patented low-temperature recycling technology.

This innovative process significantly reduces environmental impact by cutting ash content and eliminating harmful emissions. Sable's technology transforms end-of-life tyres into valuable products like recycled carbon black (rCB) and activated carbon, offering sustainable alternatives to virgin materials. The company's CEO, Reuben Hanson, emphasised that Sable’s process is more efficient and environmentally friendly than traditional methods, positioning the company as a leader in sustainable rubber recycling.

The raised capital will be used to scale operations, expand plant capacity, and enter global markets. Sable plans to build two five-tonne plants in Australia and explore licensing opportunities in major cities worldwide. The company aims to process three tonnes of rubber per hour, producing high-quality rCB for various industries, including tyre manufacturing, agriculture, and construction.

Due diligence: The Australian, AFR

*Mixed team funding amount is understated due to the Profit Peak raise amount being undisclosed.

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

🤑 New Funds, Who’s This? 🤑 

♠️ Ace Venture Studio, backed by Gen Y investor Michael Frazis, launches VC fund/ venture studio (AFR)

• Frazis, who is the son of former Bank of Queensland CEO George Frazis, has invested around 75% of a total $10 million raised into 12 early-stage startups, including Caresquare, which this week announced a $300,000 Seed raise ☝️.

• Learn more about Ace Venture Studio here.

🥳️ Wins 🥳

🤖 Cicada Innovations announces the startups set to present at Tech23 2024

• Cicada x Tech23 is “Australia’s biggest deep tech event” where a range of companies solving complex problems will pitch their companies at an event on the 7th of August.

• Meet the 23 startups (selected from 143 applications) here.

📻 Airtasker takes to the airwaves with equity for advertising deals (Mumbrella)

• Last week, Airtasker signed $5M with oOh!media for outdoor advertising like billboards and screens.

• This week, the platform that connects ‘Taskers’ with people who need small jobs done announced a $5M deal with ARN Media which owns the KIIS and Pure Gold radio networks.

• After two years, Airtasker will either pay in cash (with a 5.8% interest) or convert the value into shares at a 10% discount to its 30-day VWAP.  

🥄 🐫 Early stage dating/friendship apps Spoony & Humpday get coverage in The Age & SMH

• Spoony is a community platform designed to help neurodivergent, chronically ill, and disabled people deal with social isolation.

• Humpday is an “anti-dating app that ONLY works on Humpday (Wednesday)”.

• It’s rare to see early stage companies get coverage from a major news publishers (especially when it’s not tied to a raise announcement), so the Spoony and Humday co-founders, Nicholas Carlton and Charlotte Vieira were understandably excited to share the news!

👀 Accelerator Watch 👀 

Antler has announced seven new pre-Seed investments; each investment is $225,000 at a $1.875 million post-money valuation for a 12% stake in the startup. Here they are 👇️ :

• Authentified connects brand purchases to marketplaces, handling resale for consumers and allowing brands to highlight new products.

• Enrola is a vocational education comparison platform offering personalised course recommendations and reducing administrative burdens for providers.

• Braiv is a video hosting, editing, and streaming platform that uses AI to customise, caption, translate, and dub videos.

• Dark Patterns Lab helps businesses audit and rectify deceptive design practices to ensure compliance with regulations.

• Communiti Labs provides an AI-powered community engagement platform for councils and large projects that offers actionable insights from data across multiple channels.

• Pactify streamlines contract creation and workflow management for social media talent managers.

• Enaxiom aims to decarbonise water treatment and reduce environmental impact with its Hydrocool solution.

🧠 KaaS (Knowledge as a Service)

Gem’s Pick 💁‍♀️ Robots Guide 

• Picture a robot…what comes to mind? OK, now click on the website above and have your mind blown as to how many different forms robots can take that you probably wouldn’t have imagined.

• Robots Guide is a directory of over 250 robots, of all types, from around the world - from the most creepy to the surprisingly furry and everything in between.

• WARNING ⚠️ Going on this website may result in you going down a serious rabbit hole of looking at all the weird and wonderful robots that exist around the world.

Will’s Pick 💁‍♂️  What you should know about SAFE notes

• SAFE notes are now more common than ever. Spun out of Y-Combinator, SAFE notes are designed to facilitate quick capital infusions while deferring additional variables for a later date. This was a handy write-up for anyone looking to better understand SAFE notes!

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‘Til next time,

👋 Will & Gem