G’day, and welcome to this week’s edition of Overnight Success! A special welcome to the 34 new subs who joined since last week. 👋 Here’s your weekly download on all the important things that happened in the Aussie startup ecosystem.

This week our feeds were filled with FOMO-inducing pics from these ecosystem events 👯:

• West Tech Fest (Perth/ Fremantle)

• The Pause Awards (Melbourne)

• Startup to Scaleup Summit (Sydney)

If you missed out on heading along, now is a good time to bookmark them in your calendar for next year…! 👀

Housekeeping: Does your OS newsletter get cut off by Gmail’s pesky mobile app? You can read the full version without interruption here.

Headlines

🥶 Australia’s “tech winter” in cold, hard data (AFR)

• According to data provided by Cut Through Venture, Australia's tech sector is facing a ~$4 billion reduction in funding (compared to last year) as investors become more cautious and selective in their investments.

💄 The ACCC is cracking down on influencers (Business News Australia)

• The consumer watchdog is raising concerns about the authenticity and transparency of influencer endorsements and online reviews, warning that deceptive practices could mislead consumers.

• TL;DR - if you’re thinking of using influencers as part of your marketing strategy, tread carefully!

✂️ Tall poppy syndrome? Blackbird feels the heat (again)

• There are (according to the media), growing tensions in the VC sector, with some debate regarding the particularly bullish investment approach of the country’s largest firm, Blackbird, compared to it’s smaller counterparts. (Startup Daily & AFR)

• At the same time, the AFR published this highly critical piece on Blackbird’s approach to investing in women-founded startups. Commenting on the piece, AfterWork’s Jessy Wu suggested people who live in glass houses shouldn't throw stones, in this well articled LinkedIn post.

✊🏻 Senator Pocock is championing Aussie innovation in the Senate (Innovation Aus)

• Instigated by the football-star-turned-politician keen to see the Australian tech industry thrive, the Australian Senate is launching an inquiry to examine the sovereign capability of our tech sector, focusing on its resilience, self-sufficiency and ability to meet national security and economic needs.

🤖 The Federal government is considering how to balance copyright concerns with enabling innovation in AI (Innovation Aus)

• And we’re not the only ones grappling with what to do about the rise of AI, with the EU Parliament also continuing to debate the details of its AI Act. (Capital Brief)

⚡️Startup Retro⚡️

Leonardo AI generates a massive $47M raise to differentiate AI image generation offerings from competitive market

Founders: J.J. Fiasson, Peter Runham, Jachin Bhasme

North Sydney-based AI startup Leonardo AI, specialising in image generation, has successfully secured $47 million in funding through the closing of two investment rounds. Leonardo AI is rapidly distinguishing itself in the artificial intelligence arena. With over 7 million users, Leonardo offers unique features like real-time image editing using simple drawings, enabling users to train its software on new visual styles.

The recent investment, including a $7.5M Seed round and a $23.5M Series A, saw contributions from Blackbird, Side Stage Ventures, US-based Smash Capital, ex-Disney executives, Beijing’s Gaorong Capital, and others. Although Leonardo AI hasn’t disclosed its valuation, estimates suggest it’s around $80 million post-investment. This funding will support the company’s rapid hiring, including key female executives and the development of new tools in the B2B space.

Leonardo AI is focusing on enhancing its AI efficiency, reducing computing demands and expanding into 3D images and videos. While covering its operational costs through revenue, the platform aims to reduce its reliance on cloud services like Amazon’s web services.

Due Diligence: AFR, Side Stage Investment Notes

Everlab closes $3M pre-Seed to make high-end longevity healthcare more accessible

Founders: Marc Hermann, Sam Kothari, Anshul Jain

Everlab, a boutique healthcare startup focusing on longevity, has secured $3M in pre-seed funding to make its high-end health services more accessible to the general public. Everlab is in good hands, having been founded by a team that includes a doctor, a former Airwallex growth expert and a nutrition entrepreneur. The initially offered services range from $3,000 to $15,000. With this new funding, Everlab plans to introduce a more affordable product, around $1,000, targeting a broader audience.

The funding round was led by European VC fund b2venture, alongside Ten13, AfterWork and Flying Fox. The company, co-founded by Sam Kothari, aims to democratise preventive healthcare services traditionally reserved for the ultra-wealthy. Everlab’s service includes rigorous testing and health advice from doctors, dieticians and nutritionists, focusing on potential future health issues rather than immediate concerns. The platform starts with tests and consultations to understand your needs and devise a personalised plan. This is then followed by an ongoing health review and interventions when needed.

The goal is to create an “operating system for human health,” bringing personalised, data-driven healthcare to a wider audience at a fraction of the cost. Everlab’s approach includes assessing various health aspects like mobility, stability, flexibility and cardiac fitness to predict and improve clients’ future fitness levels.

Due Diligence: The Australian, Afterwork Ventures Investment Notes

Omni Biotech raises $300K to focus on hydration monitoring software

Founders: Will Poot, Zac Farrow

Perth-based Omni Biotech, co-founded by Curtin University alumni Will Poot and Zac, has announced an investment round from Skalata Ventures. Omni capitalises on the widespread use of wearables, focusing on a critical yet overlooked aspect of health: hydration. Using photoplethysmography sensors (definition below) in most smartphones and wearables, Omni’s technology non-invasively correlates blood flow characteristics to hydration levels. This innovation operates through their Omni Cloud and Omni Pulse products and offers real-time hydration monitoring every 90 seconds.

The journey of Omni began in the Silicon Valley Innovation Academy at Stanford University, where Poot and Zac initially explored real-time mental health management. Their pivot to hydration tracking aligns with their mission to transform major health indicators from occasional lab tests to continuous, on-demand metrics. According to Skalata’s investment notes, 75% of Aussies spend their whole day in a state of dehydration.

Omni aims to have wearable manufacturers as customers rather than compete with massive innovative wearable brands like Apple, Samsung and Garmin. They’ve already seen great traction in Western Australian mining sites where hydration is a KPI for mines.

Photoplethysmography: (PPG) is a simple optical technique used to detect volumetric changes in blood in peripheral circulation.

Due Diligence: Skalata Investment Notes

Andisor lands $1M pre-Seed to revolutionise warehouse stock information

Founders: Vandana Chaudhry, Katie Fletcher

Melbourne-based startup Andisor, spearheaded by former Crocs sales head in India, Vandana Chaudhry, has secured $1 million in pre-Seed funding. Andisor, a company driven to transform retail at the wholesale level, streamlines the typically lengthy process of onboarding new stock, reducing it from months to just a day. This efficiency, achieved through data-led insights and real-time stock numbers, gives Andisor a unique position as a critical intermediary between businesses and warehouse brands.

Andisor’s innovative solution addresses a persistent problem in retail logistics that Chaudhry has found frustrating since 2014. By cutting down the onboarding time from 14 weeks to a single day, Andisor significantly enhances business operational efficiency.

The company, which already collaborates with about 120 brands and 600 retailers, plans to use the investment to expand its team and refine its product. Andisor operates a SaaS-enabled marketplace that connects brands to a larger channel of retailers and optimises B2B communications that often rely on outdated methods like Excel files and emails. Andisor aims to redirect this time into strategic business development and stronger relationships, revolutionising retail administration and decision-making processes.

Due Diligence: Startup Daily

SourseAI secures $3M Series A round to revolutionise telecom user acquisition strategies

Founders: Tanya Hyams-Young

SourseAI, a telecommunications platform that hopes to utilise data to help telcos acquire new customers, has secured $3 million in a Series A funding round led by Centerstone Capital. Under the leadership of CEO Tanya Hyams-Young, SourseAI focuses on identifying ‘good customers’ for telcos, characterised by long-term value, high upsell potential and a low churn rate.

Hyams-Young points out a critical gap in the current telecom industry: many companies need help to utilise their data effectively but often get bogged down in costly endeavours to develop in-house AI solutions. SourseAI addresses this challenge by offering efficient and specialised AI-driven services, capable of filtering, analysing and modelling data to inform strategic decisions. This process enables telcos to rapidly test and implement strategies for acquiring new customers, all within a 90-day timeframe.

SourseAI currently offers Data and Information Consulting Services to help telcos understand their data, while their platform, Atlas, uses AI to optimise decisions made within a subscription business. SourseAI currently counts Amasyim, Vodafone, Kogan Mobile, skyNZ and Boost Mobile as customers.

Due Diligence: The Australian

Arkeus opens eyes with $4.45M to build advanced optical technology

Founders: Simon Olsen, Jonathan Nebauer

Melbourne-based startup Arkeus, specialising in advanced automated optical technology, has successfully completed a $4.45 million funding round. The round was predominantly led by the CSIRO-backed Main Sequence Ventures, who contributed nearly $3 million and investments from VC firms like Beaten Zone Ventures and Salus Ventures. Arkeus, co-founded by Simon Olsen and Jonathan Nebauer and key figures David Willems and Thomas Albrecht, is revolutionising observation capabilities ‘beyond human limits’.

Arkeus’ technology integrates cutting-edge optical tools with artificial intelligence, allowing users to see through multiple light spectrums simultaneously. This approach provides a comprehensive perspective of the environment, akin to hundreds of operators viewing through different lenses simultaneously. Their AI engine, ARK, rapidly processes the data, which adds crucial context for users. This technology has significant potential in various fields, including border security, search and rescue and early bushfire detection.

Currently utilised in aircraft and drones, Arkeus’s tech monitors large areas, such as oceans, for illegal fishing activities. With the new funding, Arkeus plans to scale up for commercial expansion and further R&D. The cameras and tech can be used on drones, at sea, in fixed positions on land and via satellites in space.

The technology’s real-time detection of anomalies offers a transformative edge in numerous domains, from defence to commercial monitoring tasks. Investors are especially interested in how Arkeus is poised to capitalise on the commercial opportunities arising from the AUKUS treaty and defence contracts in the European Union.

Due Diligence: Arkeus Announcement, AFR

Vantari VR raises $7M Series A for virtual reality medical training

Founders: Dr Vijay Paul and Dr Nishanth Krishnananthan

Sydney-based medtech, Vantari VR, which specialises in virtual reality medical training, has raised $7 million in a pre-Series A round led by Co:Act Capital. The round was supported by Acova Capital, Significant Early Venture Capital, Sirius Capital, and others. Experiencing 400% revenue growth in FY23, Vantari VR has established significant partnerships in the US, Italy, and the UAE. The company has developed an innovative ‘flight simulator for healthcare’ technology that enables clinicians to safely practice procedures in VR before treating real patients, proven to decrease medical errors by 40% and improve performance by 32%.

The platform includes a Vantari Simulation headset, which offers procedural training for clinicians, nurses, and students to mimic real-life scenarios and complications. The AI trainer is a virtual guide that is up to date with end-to-end best practices. Holding all this together is Vantari Connect, which is a hub for community and progress dashboards.

Already making a mark in Australian hospitals like Royal Prince Alfred and Westmead, the technology’s integration into training programs demonstrates its effectiveness in enhancing medical education. The funding round will fuel Vantari’s expansion into North America and grow its technology and operational teams.

Due Diligence: Business News Australia

Dataweavers lands $5.5M round for WebOps platform to better manage cloud data operations.

Founders: Ben Shapiro

Dataweavers, a Queensland cloud data operations platform, secured a $5.5 million raise, bolstered by a key investment from the Queensland Government’s $100 million Business Investment Fund. This investment was facilitated through QIC and led by prominent investors Five V Capital and OIF Ventures.

Renowned for tools that optimise and measure user experiences on websites, Dataweavers has already attracted major clients like Toyota and Rio Tinto. The platform plans to utilise the funds to expand its operations, including hiring 20 new team members in Queensland. This expansion is geared towards enhancing its product offerings and extending its reach to a broader client pool, particularly in the United States. According to LinkedIn, the headcount has grown by 36% in the last 6 months alone.

Due Diligence: AFR

Planet Protector Packaging raises $12M to eliminate polystyrene waste

Founders: Joanne Howarth

Sydney-based Planet Protector Packaging is on a mission to eliminate polystyrene waste and has raised $12 million in a funding round led by Andrew and Nicola Forrest’s Minderoo Foundation, with a $3 million contribution. The eco-friendly packaging startup, founded in 2016 by CEO Joanne Howarth, is still considering an additional $2 million from aligned investors.

Howarth, inspired by her experience in a meal kit company using massive quantities of polystyrene, developed Woolpack, an innovative alternative made from the underbelly wool of sheep – a material once discarded as waste. This sustainable packaging solution, encased in recyclable plastic or compostable sleeves, offers an environmentally friendly option for insulating food and medical supplies. Customers can repurpose the insulation for home compost or other uses, like plant bedding or pet beds. The woolpack product does not use any harsh chemicals and has natural insulation, meaning less refrigeration is needed.

With its commitment to sustainability, Planet Protector Packaging has made notable strides, winning the Ocean Impact Pitch Fest in 2020. By 2021, the company was processing 20 tonnes of wool waste weekly and had successfully diverted 2,600 tonnes of polystyrene from landfills, equivalent to 44 Olympic-sized swimming pools. Clients include the likes of Mt Cook Alpine Salmon, Bondi Meal Prep and My Food Bag.

Due Diligence: Smart Company

M&A Action

• Kate Pounder (Tech Council CEO) shared some strong thoughts about the government’s proposed changes to M&A laws this week, saying “If we start introducing rules that make it harder or less certain to undertake mergers and acquisitions in Australia, from a starting point where that is already rarer and already harder to raise funds, then you can send a signal to the market that it will be a harder path in Australia.”

• Crionet bought a majority stake in “Canva for sports broadcasts” scale-up LIGR (Business News Australia)

• Childbirth education platform Birth Beat exited to Device Technologies for an undisclosed sum (Startup Daily)

Wins

• Crowdfunding platform Banana launched to bridge the gap between designers, producers and consumers (Smart Company)

• 12 new startups were announced as the next cohort of the CSIRO’s ON Accelerate program (Startup Daily)

• Jessy Wu has been appointed partner at Afterwork Ventures (Afterwork)

• Side Stage Ventures was featured ‘centre stage’ in a glossy Forbes feature (Forbes)

• Advanced Navigation is on track to become Australia’s first mass producer of photonic chips, thanks to a new government grant (Innovation Aus)

📆 Overnight Success now co-hosts the Aussie & NZ Startup Events calendar, created by Startmate and supported by The Community Collective.

KaaS (Knowledge as a Service)

Gemma’s Pick 💁‍♀️ Pitch opportunities for Aussie founders in 2024

• I spoke to an awesome female founder this week about what she could do to set her startup for success ahead of starting a fundraising drive in 2024. My top tip - get practice pitching! But it made me realise, it can be hard for those new or less connected in the ecosystem to find these opportunities. I’m crowdsourcing the top pitch events planned for 2024 and would love your input in the comments of this post, or directly via email!

Will’s Pick 💁‍♂️  The Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger 

• This book is also available for purchase here but above is a free version available online. Obviously, goes without saying that this is full of pearls of wisdom and something I'll be reading over the summer break.

• “Poor Charlie’s Almanack is a testament to the power of thinking across disciplines. It’s not just a book about investing; it’s a guide to learning how to think for yourself to understand the world around you.” - John Collison

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‘Til next time,

👋 Will & Gemma