💌 Aussie Startup & VC Summary | 18th January 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 🚀 .

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👀 Headlines 👀 

🦣 Vow trims its workforce amid funding quest and regulatory delays (SMH, AFR, Capital Brief, Startup Daily)

• Sydney-based cultivated meat startup Vow has reduced its staff by nearly 30%, laying off 25 employees, as it seeks additional investment to extend operations through 2027.

• The company, known for innovative products like the "woolly mammoth meatball," is still awaiting regulatory approval to serve its lab-grown meats in Australia, with current offerings available in select high-end restaurants in Asia.

• CEO George Peppou cited a challenging funding environment and longer-than-expected regulatory processes as factors necessitating the layoffs, emphasising that they will need to secure new capital to continue pioneering in the cultivated meat industry.

💰Rokt's valuation skyrockets during $510M secondary share sale (AFR, Capital Brief)

• The e-commerce marketing company Rokt has achieved a valuation of $5.6 billion following a $510 million secondary share sale, allowing employees and early investors to cash out.

• The secondary sale was managed by Barrenjoey, with participation from existing investors such as Square Peg and Wellington Management, reflecting strong confidence in Rokt's growth trajectory.

• Despite its success, Rokt's intense work culture has been described as "not for everyone," highlighting the company's particularly high-performance expectations.

🌍 Atlassian invests in London-based AI avatar startup Synthesia, now valued at $2.1 billion (AFR)

• London-based Synthesia, specialising in AI-generated video avatars for corporate communications, has secured $180 million in a Series D funding round, elevating its valuation to $2.1 billion.

• The funding round was led by New Enterprise Associates, with participation from investors including Atlassian, GV (formerly Google Ventures), and Accel Partners.

• Synthesia plans to use the investment to enhance the realism of its AI avatars and expand its global presence, including potentially building a footprint in Australia.

• The investment underscores Atlassian's commitment to integrating advanced AI technologies into its suite of collaboration tools.

🤝 Telstra bets $700M on AI in new Accenture joint venture (Startup Daily)

• Telstra is investing $700 million over seven years in a joint venture with Accenture to streamline operations, enhance customer experiences, and consolidate its AI and data capabilities.

• The deal reduces Telstra’s AI vendor partnerships from 18 to just two, with Accenture taking a 60% stake in the new venture, bringing global expertise to accelerate AI adoption.

👀 Disagreement on when quantum computing will be useful - Aussie startup Quantum Brilliance weighs in

• The timeline for practical quantum computing remains hotly debated, with Nvidia CEO Jensen Huang suggesting it's 15–30 years away, while Australian startup Quantum Brilliance argues its diamond-based quantum devices are already delivering real-world applications. (SmartCompany, Capital Brief)

• Quantum Brilliance contends that quantum sensing and computing can provide immediate benefits in fields like aerospace, navigation, and defence, challenging the notion that only large-scale, fault-tolerant quantum computers will be useful. (SmartCompany, Quartz)

⏱️ We’re keeping one eye on the TikTok drama, are you? (Capital Brief, Startup Daily)

• Facing a possible ban in the U.S. effective January 19, American users of the platform are flocking to the Chinese lifestyle and social media app RedNote (Xiaohongshu).

• With TikTok playing a key role in digital marketing, Australian startups that rely on it for customer acquisition may need to reconsider their social media strategies, particularly if the regulatory scrutiny in the US spreads globally.

• The rise of RedNote signals opportunities and risks - while it offers access to engaged Gen Z audiences, its ties to China raise similar data security concerns that have put TikTok under fire.

🤔 ICYMI - Payapps was sold for $600M last year (AFR)

• Geoff Tarrant, founder of construction software company Payapps, led the company to a $600 million acquisition, which wasn't widely publicised at the time.

🌐 The Australian ecosystem has started responding as big tech aligns with the incoming Trump presidency. Here are some of the discussions that kicked off!

• Globally, tech giants like Meta and Amazon are scaling back Diversity, Equity, and Inclusion (DE&I) initiatives, reflecting a shift in corporate priorities and responses to political pressures.

• Capital Brief contacted several startups, including Canva, Atlassian, Airwallex, CultureAmp, Employment Hero and Linktree, as well as Blackbird and Airtree, to understand where they stood on DEI. They only had Linktree go on record saying diversity and inclusion remained “fundamental to our company culture and the way we build our product”.

• In the same week, it was reported that Linktree, the link-in-bio unicorn, had seen a previous employee claim in the federal court that another employee was given preferential treatment due to their relationship with the founder, Alex Zaccaria. (AFR)

• There were also some worthwhile op-eds written on the topic, including TechDiversity director and Best Case Scenario founder Luli Adeyemo in InnovationAus, who offers a sobering look at how diversity, equity, and inclusion (DEI) programmes risk becoming sidelined as just another corporate fad. Adeyemo wrote the piece to highlight how fear-driven backlash and superficial commitments can undermine genuine progress.

• We also had Jessy Wu in the AFR arguing that DEI matters, but that it’s lost its way by flattening people into demographic caricatures and demonising “masculine energy”. She argues the real fix is a more nuanced, human-centred approach that honours individual complexity and creates genuinely inclusive cultures.

• It was only a few short months ago when the Tech Council of Australia in November launched a set of new industry standards to underscore the nation's effort to bolster diversity in tech, aiming to add 600,000 tech workers over the next five years.

⚡️ Startup Retro ⚡️

Convergence Medical secures $5M to revolutionise arthroscopic surgery

Founder: Dr Chris Jeffery

Brisbane-based medtech startup Convergence Medical has raised $5 million in a Series A funding round led by US investor Avicella Capital, elevating the company's valuation to over $30 million.

Founded three years ago by orthopaedic surgeon Dr Chris Jeffery, Convergence Medical is developing the world's first arthroscopic surgical robot, the V01.

The Convergence Ortho V01 is a compact orthopaedic surgical robot designed to assist surgeons in performing precise, consistently accurate procedures. It integrates advanced imaging and navigation tools, enabling real-time guidance and exact alignment of implants. Streamlining preoperative planning and intraoperative execution, it helps minimise errors, improve patient outcomes, and reduce overall surgical times by alleviating the physical and cognitive demands on surgeons while enhancing precision and dexterity.

What sets the V01 apart in the surgical robot market is its emphasis on compactness and ease of use. While many orthopaedic robots require large operating suites and complex set-up protocols, the V01’s smaller footprint and intuitive interface allow it to fit into more surgical settings with fewer disruptions to workflow. Its software-driven guidance system also provides highly detailed data and analytics, enabling surgeons to make immediate adjustments as needed. Altogether, these features distinguish the V01 from other robotic platforms by making advanced robotic precision more accessible, adaptable, and efficient within orthopaedic surgery.

The recent funding will facilitate the commercialisation of the V01 robot and support the company's expansion into the US market, targeting the $6.1 billion global arthroscopic sector. Notably, the V01 was accepted into the US Food and Drug Administration’s Breakthrough Devices Program in December 2023, expediting its path to market.

Due Diligence: AFR, Startup Daily, Business News Australia

ElectraLith secures $27.5 million to advance sustainable lithium extraction

CEO: Charlie McGill

Melbourne-based startup ElectraLith has raised $27.5 million in a Series A funding round led by Main Sequence, with participation from Breakthrough Victoria, Rio Tinto, Chevron Technology Ventures, IP Group, and Monash University.

Founded in 2021 as a spinout from Monash University, ElectraLith is pioneering a Direct Lithium Extraction and Refining (DLE-R) technology that eliminates the need for water and harmful chemicals. This innovative process uses a patented electro-membrane system to extract and refine battery-grade lithium hydroxide in a single, modular step, significantly reducing environmental impact compared to traditional methods.

The newly secured funds will support the development and deployment of ElectraLith's first field-deployed pilot plant, bringing the company closer to commercialising its sustainable lithium extraction technology.

This investment positions ElectraLith to contribute significantly to the global shift towards cleaner energy solutions, addressing the growing demand for lithium in a more environmentally responsible manner.

Due Diligence: Startup Daily, Smart Company, InnovationAus, Business News Australia

Coposit secures $14 million to expand property deposit platform

Founders: Chris Ferris and Dan Ferris

Sydney-based proptech startup Coposit has raised $14 million in an oversubscribed funding round, surpassing its initial $10 million target. The round attracted both international investors and local industry groups.

Founded in 2021 by brothers Chris and Dan Ferris, Coposit addresses housing affordability by enabling buyers to secure off-the-plan properties with a minimum deposit of $10,000. Coposit provides a win-win scenario for both developers and buyers by completely rethinking how property deposits are managed. For developers, the platform opens up a broader pool of qualified leads by lowering the barriers to entry, while buyers no longer need the typical lump-sum deposit, which can be a massive blocker to closing deals.

This effectively accelerates a project’s sales cycle, as more prospective homeowners can sign on with a series of smaller payments rather than one hefty upfront figure. Meanwhile, buyers benefit from an easier path to homeownership; instead of scraping together a sizeable deposit, they commit to modest weekly instalments—often as low as $100—that begin to build their equity. And perhaps the biggest kicker: these instalments can even earn interest, providing an incentive that goes beyond mere affordability. By marrying fintech prowess with property acquisition, Coposit reduces risk and boosts accessibility on both sides of the transaction.

The platform has facilitated access to over 100 projects across Australia's eastern states, with a combined end value of $9 billion. The newly raised funds will support Coposit's expansion plans, allowing the company to enhance its services and reach more prospective homeowners.

Due Diligence: Smart Company, Business News Australia

Vaxxas secures $3.2 million prize to advance patch-based mRNA COVID-19 vaccine

Founder: Mark Kendall | CEO: Dan Devine

Brisbane-based biotechnology company Vaxxas, in partnership with The University of Queensland's BASE facility, has been awarded US$2 million (A$3.2 million) as part of the Biomedical Advanced Research and Development Authority (BARDA) Patch Forward Prize.

Founded in 2011 as a spinout from The University of Queensland, Vaxxas is developing a high-density microarray patch (HD-MAP) technology designed to deliver vaccines directly into the skin via thousands of micro-projections. This approach aims to enhance vaccine efficacy, reduce reliance on cold-chain storage, and facilitate self-administration.

The awarded funds will support the development of a patch-based mRNA COVID-19 vaccine, leveraging Vaxxas' HD-MAP technology and mRNA vaccines manufactured at UQ's BASE facility. This collaboration seeks to improve the thermostability of mRNA vaccines, potentially broadening access to immunisation, particularly in regions with limited cold-chain infrastructure.

This recognition from BARDA highlights the potential of Vaxxas' innovative vaccine delivery platform to contribute significantly to global health initiatives.

Due Diligence: InnovationAus, Business News Australia

Quantum Brilliance finalises Series A at $20 million with new investors

Founders: Dr. Andrew Horsley, Dr. Marcus Doherty and Mark Luo

Quantum Brilliance has completed its Series A funding round, increasing the total raised to $20 million. This finalisation builds on the company's previous December 2024 announcement, when it secured $13 million from the National Reconstruction Fund Corporation (NRFC). The additional funding brings new investors, including In-Q-Tel, to the cap table.

The Australian-German startup is developing diamond-based quantum accelerators that operate at room temperature, aiming to make quantum computing more accessible. The newly secured capital will further support its commercialisation efforts.

Due Diligence: InnovationAus

🤑 New Fund, Who’s This? 🤑 

🎾 Tennis Australia's AO Ventures serves up $49M for sports tech startups (Startup Daily, Business News Australia)

• AO Ventures, the venture capital arm of Tennis Australia, has secured nearly $49 million in its first funding round, attracting prominent investors such as Mark Nelson of Caledonia, John Wylie of Tanarra, and international VC Brad Feld.

• The fund aims to invest in approximately 20 startups focusing on sport, entertainment, media, and health, building upon Tennis Australia's existing initiatives like the AO Startups program and its partnership with Techstars.

🎉 Wins 🎉 

🫱 🫲 Hyphen Health and Hey Fella Merge to expand online sexual health services (Smart Company, Business News Australia)

• Hyphen Health, Australia's largest online sexual health clinic group, has merged with Hey Fella, a digital medical health service specialising in sexual health for gay men.

• The merger brings together Hyphen Health's extensive service offerings and Hey Fella's expertise in providing tailored healthcare solutions for the LGBTQ+ community, aiming to enhance accessibility and inclusivity in sexual health services across Australia.

🌐 Labor commits to a $3B NBN upgrade in pre-election policy announcement

• The government’s $3 billion NBN upgrade will transition 622,000 premises—many in regional Australia—from Fibre to the Node (FTTN) to Fibre to the Premises (FTTP), dramatically improving internet speeds and reliability. (SBS, InnovationAus)

• For startups, particularly those in SaaS, AI, gaming, and remote work sectors, faster internet means improved product development, better global collaboration, and stronger remote hiring opportunities—especially in regional hubs like Launceston, where the local tech industry is expected to benefit. (Examiner, SmartCompany)

🌱 Government injects additional $20M into On-Farm Connectivity Program (Department for Infrastructure, InnovationAus)

• The Australian Government has announced a $20 million boost to the On-Farm Connectivity Program (OFCP), bringing the total investment to $53 million.

• This funding aims to assist primary producers in adopting connected machinery and sensor technology, enhancing productivity and sustainability in the agriculture sector.

🔋Adelaide startup VAWT-X Energy to trial innovative vertical wind turbine prototype

• South Australian startup VAWT-X Energy, in collaboration with Flinders University, is set to trial a next-generation vertical-axis wind turbine (VAWT) south of Adelaide. (Mirage News)

• The 6kW prototype aims to enhance sustainability and reduce energy costs for residential, agricultural, and light industrial operations, with potential applications in large-scale offshore wind farms. (Energy Source & Distribution)

👀 Vibe Check 👀 

A wave of “zombie VCs” emerges that includes both the big and small end of town. (Capital Brief)

• According to this Capital Brief article, The Australian venture capital scene is undergoing a refresh. Both large and small funds are reportedly becoming “zombie VCs”, which means they’re unable to raise future funds and continue the team's growth. 

• Major players, like Titanium Ventures, which has $1.52 billion under management aren’t immune either. Titanium recently saw Telstra exit its LP position and announced that General Partner Albert Bielinko would transition to a part-time Venture Partner role.

• Many small funds are reportedly heading into hibernation mode, focusing on portfolio companies rather than assessing new investments. 

• In positive news, fresh fund registrations for new Early Stage Venture Capital Limited Partnerships are being set up at a rate matching the industry’s highs in 2020. However, many warn that simply registering a fund is no guarantee of raising actual capital. 

Mark Woodland, the founder of Kismet and the exited founder of Xplor, has come out strongly in a LinkedIn video against over-regulation in Australian business. 

• Mark’s work has typically focused on high-compliance industries - he previously tackled the childcare industry and is now focusing on the NDIS.

• Daniel Petre, Partner Emeritus and Co-Founder of Airtree venture capital (who invested in both Xplor and Kismet), replied in the comments and warned against joining the “Musk regulation train”.

📆 Notice Board 📆 

Antler is getting read for their next cohort: If starting a company is on your New Year’s to-do list, don’t miss your last chance submit an application to work with Antler—applications close this Wednesday! Express your interest here!

Applications are now open for Macquarie University Incubator’s Cohort 1 2025—offering founders (no need to be an alumnus) a vibrant community, versatile workspaces, personalised mentoring, expert-led workshops, and access to cutting-edge research networks. Want to learn more? Join our online info session on 29 January (5:30–6:30pm) to ask questions before you apply.

CSIRO’s GAP BLITZ Accelerator Programme is now open for applications—helping startups and SMEs identify and tackle blind spots through cohort-based learning and tailored business coaching. Commencing February 2025 and running for 12 weeks, this free initiative is delivered by the CSIRO Lindfield Collaboration Hub in partnership with Investment NSW’s Boosting Business Innovation Programme. Apply here by Sunday, 2 February.

Halcyon is accepting applications for two exciting fellowships for impact-driven founders (details below!). Learn more and apply here before the 16 February.

• Climate Fellowship: An 8-week residential program in Washington, D.C., open to founders in the U.S. and the globe who are building for-profit ventures addressing climate mitigation, adaptation, and resilience.

• Future Builders Fellowship: A hybrid program (virtual and 2 in-person residency weeks) for U.S.-based founders creating for-profit ventures in Climate, Health, or EquityTech.

The startup events calendar is just beginning to ramp up again for 2025…!

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 💁‍♂️ The Erosion of Taste in the Age of Mass Production by Abhi

• I haven’t been engaging a heap in startup and tech content over the break, but this piece by Abhi caught my eye, and I thoroughly enjoyed the read. Especially the linked breakdown of ReelShort on X. This piece argues innovation and real understanding transcend surface-level patterns. Taste won’t erode in a world of AI clones. Real innovation thrives on deep, genuine understanding—no shortcuts.

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‘Til next time,

👋 Will & Gem

🔨 Tool Box 🔧 

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