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. 🇦🇺 🚀 

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👀 Headlines 👀 

🎨 Canva announces acquisition of generative AI image startup Leonardo.Ai for “more than $320 million”

• Leonardo.Ai, founded in 2023, has been on a monster growth journey since it was founded, and now reportedly has 19 million users

• The startup first raised a Seed round from Side Stage and Blackbird in August 2023. A $47 million Series A followed in December 2023 with participation from the original investors and Smash Capital, TIRTA Ventures, Gaorong Capital and Samsung Next.

• The move will allow Canva access to high-quality AI editing software, while the Leonardo team will see their products distributed across Canvas' 190 million-strong user base. 

• While the deal details are not clear yet, reports are investors were given the option to take a small return on their investment or convert their equity to shares in a scrip transaction.

• Tune into this week’s episode of The Startup Retro (out Monday!) for an interview with Elli Hanson, Principal Investor at Side Stage Ventures, where we take an inside look at the deal.

❌  The Federal Government's Boosting Female Founders (BFF) grant program has been killed off, with only $35.2 million of the allocated $52.2 million allocated

• The suspension follows an internal review by the Department of Industry, Science, and Resources (DISR), which cited a "lack of measurable impact."

• BFF was launched in 2020 by the Coalition government, aimed to support female-founded startups but faced operational issues, including delays and errors in the grant process.

• In 2021, ~1,000 female founders were sent an email telling them they had advanced in the grant process, only for it to be retracted just hours later.

• Despite high demand, with nearly 700 applications in round 3, the grant program was terminated as part of May budget, but the decision was only made public following an FOI request from journos at InnovationAus.

• This follows the NSW government's shelving of a $10 million venture fund for female-founded startups, but is contrasted by the success of Victoria's $10 million Alice Anderson Fund, which has backed 36 female-founded startups (and currently tops our ‘Funding The Balance’ Investor Leaderboard!).

🦘 A tax-payer funded report on the $50M South Australian Venture Capital Fund, which was set up six years ago may not be made public (The Australian)

• The report evaluates the performance of the fund's investments, impact on the startup community, potential extension of the investment period, and necessary changes.

• SAVCF has invested $27.02 million in 10 companies, including Fivecast, Fleet Space, Val.ai, Pearler.ai Lumary, Biome Bank, Kindship, Myriota, Ferronova and Kid Sense.

• The fund was originally managed by Blue Sky Alternative Investments, but the fund's management shifted to Artesian Venture Partners after Blue Sky's collapse in 2019.

  • Artesian retained one investment manager from Blue Sky and now oversees the fund with David Rohrsheim, former head of Uber Australia and New Zealand.

• The report is currently under government review but due to its detailed financial content, no decision has yet been made on its public release.

• SAVCF portco Fivecast, a digital intelligence company, has shown significant growth, achieving 163% average revenue growth over three years and recognition in BDO's Fast Movers list.

 ⚡️ Startup Retro ⚡️

Slice snags $7.5M Seed and $10M debt for funding advances on travel

Founders: Yannick Darmalingam and Farouk Ismail

Slice, a Sydney-based fintech co-founded by Farouk Ismail and Yannick Darmalingam, has secured $7.5 million in a Seed round led by Peak XV Partners (formerly Sequoia Capital India & SEA), alongside a $10 million debt facility from Roadnight Capital. This marks their first external funding after six years of bootstrapping. Slice addresses the challenge of funding advance travel bookings, helping over 70,000 customers afford flights without incurring unsustainable debt.

Ismail and Darmalingam, who previously worked in CBA’s collections and hardship department, founded Slice to provide a financially sustainable alternative to credit cards for travel expenses. Initially self-funded through personal credit cards, the company faced near collapse during the pandemic but cleverly pivoted to the US market, achieving a 350% revenue increase in 2023.

Slice offers two products. The first is Pay Later Travel, which is a buy now pay later product specifically for travel. The second is called Slice Pay which enables travel agents to offer a lay-by at the point of sale, allowing their customers to break up the cost of travel into weekly or fortnightly instalments, all before travel.

Slice's business model includes airline commissions and a markup on bookings, as well as commissions from Slice Pay, their B2B solution for travel agents. The new funds will fuel US expansion and product enhancement. Slice positions itself not as a BNPL service but as a smart savings tool, akin to traditional lay-by, ensuring customers receive their boarding passes only after completing payments.

Investment Notes: AFR, Startup Daily

SeenCulture raises $1M pre-Seed for business team design

Founders: Nikki Tugano

SeenCulture, a Melbourne based workplace talent management platform founded by psychologist Nikki Tugano, has secured $1 million in a pre-Seed round led by LaunchVic’s Alice Anderson Fund for female founders. Notable investors include Techstars’ Kirstin Hunter, NiceTo’s Preethi Mohan, and strategic angels from Atlassian, Canva, and Culture Amp. Additional support came from M8 Ventures, InterValley Ventures, and Queensland-based Torus, which focuses on diverse and female-led startups.

Launched in 2023, SeenCulture helps businesses make smarter, fairer, and faster decisions on promotions, performance reviews, and team design, leveraging data and behavioural science to highlight overlooked talent. Serving over 1,500 users, including Atlassian and Culture Amp, SeenCulture aims to reduce employee turnover and recruitment costs.

Tugano likens SeenCulture to "Moneyball for teams", helping leaders stabilise and optimise their workforce. The new capital will enhance product development and expand customer reach. Previously, SeenCulture participated in the NSW government-backed Techstars accelerator and received initial funding from Cut Through Angels.

Due Diligence: Startup Daily

Monty Compost raises $1M Seed to scale IoT compost device for industrial use

Founders: Ashley Baxter

Brisbane startup Monty Compost has secured $1 million to transition from its consumer-focused composting technology to industrial applications. Founded by Ashley Baxter, the company has developed a “Fitbit for your waste”, leveraging years of R&D to effectively integrate electronics with waste management. The funding round, led by Skalata and supported by Antler and others, will enable Monty to expand its operations into industrial composting facilities.

Monty Compost's technology provides real-time data on compost conditions, such as moisture, temperature, and gas levels, helping to improve efficiency for both novice and experienced composters. It’s new foray into B2B solutions comes in the form of MontyOHM, which offers the hardware and software solution to organisations involve din organics recycling operations.

Despite early challenges, including a 100% failure rate for their first prototype, Monty’s persistence has paid off. The startup’s first commercial project is now underway, targeting agricultural composters, councils, and businesses involved in organic material like biogas.

Due Diligence: Business News Australia

Sindy Labs lands $305K for educational check-in app powered by AI

Founders: Benjamin Arya, Taha Ansar and Oliver Cucanic

Melbourne-based edtech startup Sindy Labs, founded by Benjamin Arya, Taha Ansari, and Oliver Cucanic, has secured $305,000 (US$200k) as part of its acceptance into UC Berkeley's SkyDeck accelerator. Sindy Labs, launched in 2023, addresses student engagement in the era of generative AI. Their AI-driven platform, Sindy, provides tailored “check-ins” on coursework, helping educators track progress and provide personalised feedback, while also ensuring academic integrity by flagging unfamiliar content.

Arya, Sindy's CEO, emphasises the platform's role in improving learning experiences and supporting educators amidst rapid AI advancements. Sindy Labs emerged from the University of Melbourne's startup competition and has since developed a functional enterprise software stack, securing paid trials in the US, New Zealand, and Australia.

SkyDeck Fund managing partner Chon Tang praised Sindy's potential, highlighting its practical functionality and promising future. The startup plans to leverage this accelerator opportunity to expand pilots at major universities, including UC Berkeley, and aims to partner with top employers like Apple and JP Morgan to streamline graduate hiring.

Preparing to set up a base in San Francisco, Sindy Labs envisions enhancing educational outcomes and creating efficient talent pipelines for large enterprises.

Due Diligence: Business News Australia

Pactify raises undisclosed pre-Seed for talent management system for influencers and creators

Founders: Rahul Moudgil and Nagendra Yadav

Pactify, founded in February by Rahul Moudgil and Nagendra Yadav, aims to revolutionise talent management within the booming creator economy. The startup addresses inefficiencies in managing creators through a SaaS platform that reduces administrative burdens and legal costs. This allows talent managers to focus on nurturing talent and enables creators to maximise their potential.

The creator economy, currently valued at $250 billion and projected to reach $500 billion by 2027, faces significant challenges in effective and efficient management. Pactify’s solution tackles these issues by providing a cohesive, standardised platform that streamlines deal creation, management, and execution.

Since launching its MVP, Pactify landed three paying users within weeks and received substantial feedback from talent managers and content creators. The platform has also obtained 20 Letters of Intent from major talent agencies and plans to release a Beta version in November.

Pactify’s funds will be used to enhance the product with advanced features like AI-driven analytics and integration capabilities. The company also plans to expand its team in areas such as product development, marketing, and customer success to accelerate user acquisition and market penetration.

Due Diligence: Startup Daily

InvestorHub secures an additional $4M to their now $9M Series A to help listed companies engage with shareholders 

Founders: Ben Williamson and Rhys Davies

Retail shareholder communications platform InvestorHub has augmented its Series A with an additional $4 million, bringing the total to $9 million. The round was led by EVP, with continued support from Archangel Ventures and Flying Fox Ventures. Initially, the company raised $4 million in May 2023, following a rebrand from Fresh Equities.

Founded by Ben Williamson and Rhys Davies in 2017, InvestorHub focuses on enhancing shareholder engagement for ASX-listed companies. The platform has seen significant growth, tripling its revenue since the first Series A investment. Currently, 4% of ASX companies utilise InvestorHub's services.

The latest funding will be used to expand market share in Australia and internationally, with the UK being a primary target, holding 10% of their client base. Additionally, the company plans to enter Canadian and North American markets.

The InvestorHub platform includes a CRM to better understand the registry and identify key investors. Moreover, the platform will also identify who are key influencers on your share price or capital raise outcomes. The platform also creates a investor centre that increases engagement with shareholders. For many companies, the main value proposition is in the shareholder registry, which integrates campaign tools that allow companies to communicate with shareholders easily. 

InvestorHub aims to develop new features leveraging artificial intelligence and machine learning to improve product efficiency, predictive modelling, and provide quicker insights. Retail investors can drive a significant portion of daily trading volume and can substantially impact share prices when effectively engaged.

Due Diligence: Startup Daily

Funding the Balance | Weekly Edition

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

🥳️ Wins 🥳

Stone & Chalk and KPMG Australia have unveiled the five startups selected for the fourth cohort of the Future Technology Program, focused on creating solutions in intelligent performance.

🔥 Heatseeker:  A market research and experimentation platform that helps businesses understand customer needs and build the right technology. It offers Growth-Hacking-as-a-Service, enabling scale-ups to test market strategies, refine messaging, and discover growth opportunities.

🤖 Bluesheets:  An AI automation company serving clients globally, which builds AI-driven workflows for real-time financial automation. Its technology enables businesses to achieve autonomous operations and develop accurate, complete data sets for a data-driven future.

📊 Klaro: An intuitive workspace that makes it easier for people with a non-technical or non-financial background to work with numbers and perform anything from simple calculations to advanced forecasting without an analytical background.

🌏 Swyvl: A web-based platform that simplifies spatial data integration and visualisation without requiring GIS specialists. This no-code solution merges satellite imagery, IoT inputs, and live data into an interactive 3D mapping environment, facilitating real-time analysis and collaboration.

 🔎 Insightech: Provides digital product owners, martech, and analytics teams with clear user experience insights to prioritise and optimise A/B testing, enhancing website conversion funnels.

🤑 M&A 🤑 

Melbourne-based MarTech, IntelligenceBank, led by CEO Tessa Court, has acquired AI compliance software firm Red Marker from Kaplan (the education giant) (AFR)

• The acquisition, funded by IntelligenceBank's US private equity backer Five Elms Capital, aims to expand product offerings and geographic footprint. 

• IntelligenceBank uses AI to help teams manage digital assets, brand guidelines, approvals and compliance. Customers include TAB, Medibank, Suncorp and KFC. 

• Red Marker, originally founded by Matt Symons, automates compliance reviews for marketing materials, aiding large corporations in avoiding regulatory fines and reputational damage. 

• The deal adds 20 employees to IntelligenceBank's 100 staff, bringing their annual recurring revenue to $20 million. 

• The acquisition value remains disclosed, however Court commented that the combined entities would have a paper valuation of almost $120M.

📣 Notice Board 📣 

🧠 The Department of Industry, Science and Resources, and the Australian Taxation Office are hosting a session on the R&D Tax Offset

• Did you know… 13,000 companies registered in FY 2021-22 and the R&D Tax Offset provided approximately $5 billion in tax offsets for eligible R&D activities?

• The free information session: "Introduction to the R&D Tax Incentive" will run on the 8th of August, 1-2pm. Register here.

🚀 Overnight Success is co-hosting a meet-up & panel in Melbourne!

Click on the image below to find out more & register 👇️ 

🧠 KaaS (Knowledge as a Service)

Gem’s Pick 💁‍♀️ Alexa is in Millions of Homes and Amazon is Losing Billions, The Journal Podcast

• Spoiler alert… despite there being 500 million devices enabled with Amazon’s voice assistant around the world, Amazon lost ~$25B from 2016 to 2021 on the products. Yes, billion.

• This fascinating podcast episode deep dives into how on earth this happened in the first place (clue: Bezos’ love of Stark Trek may have given him rose tinted glasses), and what Amazon’s plan is to turn it around, without turning Alexa off for good!

• It seems even the biggest companies in the world make the rookie error of launching before having a monetisation strategy 🤦‍♀️.

Will’s Pick 💁‍♂️ The Big Guide to Fusion by Ben James, shared by Niki Scevak (Blackbird)

• Nuclear fusion is clearly becoming part of local and global discourse, with Peter Dutton making noise about it due to the constant growth in power demand. Humanity needs an uplift in power availability as we transition away from fossil fuels and EVs, and AI's power requirement continues to grow.

• This blog post is a fantastic introduction to how fusion power works and where humanity is in developing real solutions from theorised solutions.

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‘Til next time,

👋 Will & Gem