💌 Aussie Start-up & Venture Capital Summary! 29th of October

G'day and welcome to Overnight Success, the newsletter that satisfies your Australian start-up needs. A big hello to the 47 new subscribers that have joined since last week! You've just joined 625 other legends learning about Aussie start-ups.

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Headlines: 

• Square Peg close $860M of capital to invest in new and existing portfolio companies. (Business News Australia)

  • Square Peg have now raised $2.6B in the last decade. 

  • The capital will go into two funds, Fund 4 and the Opportunies Fund 2.

• The Federal Budget was released with minimal changes to the tech sector. (ABC)

  • There are no changes to the R&D Tax Incentive.

  • No announcements made on other innovation-related incentives.

  • There was a positive commitment to clean energy, with $800M earmarked for a range of projects. 

• The AFR published an insightful piece on the so-called ‘Tech Wreck’. (AFR)

1. Start-up Retro: Australia's start-up raises with a smidge of context.

2. Aussie Raisins: Companies looking to raise.

3. New Fund, Who's this? New VC money.

4. Notice Board: Signposting key events and opportunities.

5. Accredited Tweeters: Snippets from Twitter.

6. Vibe Check: A few interesting discussions from the ecosystem you may have missed.

7. (KaaS) Knowledge as a Service: Articles to make you smarter. Or to share with co-workers to make them think you’re smart.

Start-up Retro 

BioTech / Psychedelics

🍄 Psychedelic start-up, Psylo, raises a $5M seed round

Psylo, a start-up that utilises computational chemistry to help design and create psychedelics, has raised a $5M seed round. The round included Main Sequence Ventures, Cali-based Lionheart Ventures, Negev Capital, Empath Ventures and CaraMed Capital (NZ). Psylo hopes to treat mental illness through the development of custom-manufactured psychedelics. In short, Psylo will remove the hallucinogenic effects of their compounds and try to identify new therapeutics. The start-up is still in the pre-clinical phase and will use the capital to determine which of its drugs to take to clinical trials. The process will take time, with Psylo still roughly 18 months away from human trials. The company focuses on three psychedelic families: shorter-acting, longer-acting and non-hallucinogenic. Psylo is targeting the growing TAM of mental illness and will be one to watch over the next few years as Big Pharma looks to consolidate its psychedelic investment without taking on much front-end risk. 

Due Diligence: (AFR)

Pets

🐶 Lyka fetches a $30M Series B

The premium dog food brand, Lyka, has closed a $30M Series B. Israeli entrepreneur Itai Tsiddon led the round with assistance from Afterwork Ventures, Wattle Hill Captial and Point King Capital. Of the $30M, 30% came from debt financing. Lyka has spawned from the demand for better quality pet food, an industry with minimal regulation. Lyka produces fresh meals which are rich in protein, whole foods and vitamins. On top of this, they've expanded into supplements and doggy treats. Lyka has prepared 10M meals since starting in 2018. Customers feel their puppy is getting a custom meal plan with the breed and age of the dog as part of the joyful sign-up sequence. With the fresh capital, Lyka can look to expand into international markets and expand into different pets like cats. The pet care sector is forecasted to grow to $500B by 2027. Do dogs now go wacko for Lyka? Investors do!

Due Diligence: (Smart Company)

Electricity / Power

🔋 Amber lands a $13.4M Series B Extension

The wholesale electricity provider, Amber, has extended their Series B from 18 months ago. The original Series B closed in May 2021 when Amber raised $20M led by Commonwealth Bank. This time, CBA and Square Peg led the round, with NRMA joining. RNMA, the motoring association and insurance company, has invested strategically to support the EV uptake. Amber enables customers to monitor the wholesale price of electricity, allowing them to participate in the market in real-time and utilise energy when it is cheapest due to a high percentage of renewable energy in the grid. Amber's customers can buy electricity from the grid when needed and sell their excess electricity back into the market. An example would be a large house battery or car battery used to store power generated during the day via solar panels and then sold back into the market in the evening. This financing round will be used to further develop SmartShift, technology that automates devices around the home to utilise cheap, renewable power when it's available.

Due Diligence: (AFR)

Climate Tech

🌱 Greener gets a $4M Series A 

Greener, the start-up that arms consumers and business decision-makers with data around emission offset and reduction, has raised a $4M Series A. NAB Ventures led the round with support from RealVC. For consumers, Greener presents sustainable options during your online shopping experience. Users are given the opportunity to offset emissions (at no additional cost) and a greater understanding of their carbon footprint. According to Greener's website, the average Australian has a carbon footprint of 19 tonnes but can reduce that to 2. Businesses already focusing on the green economy can list themselves on the platform and be presented to climate-conscious buyers immediately. Current brands on the platform include Microsoft, T2 Tea, Scoop Wholefoods and Brew Dog, with these businesses experiencing a 10% growth in new customers.

Due Diligence: (SMH)

Consumer / FoodTech

🍔 ReciMe closes $500K a pre-seed

ReciMe, a recipe-sharing and discovery application, has closed its $500K pre-seed round from various Angels and the Alice Anderson Fund. Notable investors include Jodie Imam (Tractor Ventures) and NZ-based Even Capital. The round is an excellent example of LaunchVic's female-focused Alison Anderson Fund in action, which co-invests in start-ups with a majority of female founders. ReciMe has grown 50% month-on-month since its November launch, with the user base growing to 15,000. When Overnight Success interviewed the team in early June, the application had just ticked over 2,000 cooks. The app allows anyone to publish their recipes and share them with the world, from Michelin-starred chefs to tech-savvy Nonnas. Users can follow their favourite creators and 'remake' recipes with their own twist. The business model is full of possibilities. ReciMe could follow a Substack route and take a revenue share of content creators' subscriber revenue, or they could partner with local supermarkets for ingredient suggestions. The capital will be used to further develop and market the application to new users.

Due Diligence: (Startup Daily)

Fitness

🏋️ Steppen lands $1.65M to build a fitness marketplace 

Steppen, the Melbourne-based fitness marketplace for creators and users with guided workout videos, has raised $1.65M led by Galileo VC. Other investors included Flying Fox, The Jagen Group and Startmate. Steppen rolled through the Summer 2022 accelerator program after originally failing to get selected for the Winter 2021 cohort. The app has gone from strength to strength, with over 10K searchable fitness videos now available on the platform. Users love the application as it finds workouts specific to their goals, plus provides a healthy dose of habit-building through endorphin-releasing rewards and reminders. Earlier this year, Steppen released the Steppen Creator app to generate more content for over 300,000 users. The Creator app gives fitness influencers the ability to interact with their community.   

Due Diligence: (The Australian)

Dating

Urban Swan secures a $2M Seed round

Urban Swan, a date planning site, has raised $2M led by Antler. The capital is a follow on investment from Antler, who is investing for the third time. Urban Swan helps digital natives plan experience-based dates like axe throwing and plate smashing. The typical customer for Urban Swan is aged between 18-35. Like OpenTable, users can browse various date options and sort by type and style. Daters love it, with recent month-on-month repeat purchases growing to 250% in 2022. The dates are quite costly - with an average spend of around $150 an experience. Although Urban Swan is a website for now, this round of capital will help contribute to developing a mobile app. On top of this, Urban Swan will expand into new geographies across Australia, branching out from the dating stronghold of Sydney.

Due Diligence: (Smart Company)

If you're a founder or investor who has just closed a round, please reach out!

Aussie Raisins: Companies looking to raise

• Songtradr, the music licensing group, is looking to raise $52M at a 17% discount to its last round.(AFR)

  • The capital will be used to expand into Latin America and the Middle East.

  • Investors are being told there is a clear path to profitability with an IPO on the cards.

New Fund, Who's This?

• Square Peg raised a massive $860M which will be deployed into two funds.(Tech Crunch)

  • The two funds include; Fund 4 which will chase early-stage equity, and the Opportunities Fund supporting high perming port-co's on their growth journey.

• LaunchVic supported three new accelerators. (LaunchVic Website)

  • The Climate Salad Incubator

    • The 12 month incubator will run four cohorts over two years supporting 20 Vic start-ups each.

  • Antler Pre-Seed Accelerator Program

  • ANDHealth

    • Focusing on challenges in the commercialisation and scale-up of digital medical technologies.

• Fundabl lands $16M of Debt and Equity to provide start-ups with non-dilutive funding (AFR)

  • Fundable offers companies equal to up to 12 months of recurring revenue and can connect to accounting platforms to assess cashflows very quickly.

Notice Board

• The Startmate Accelerator closes tomorrow. Apply here.

• Sunrise Festival (November 10th & 11th) still has tickets available here.

• My Start-Up Gig: Over 3,000 Australian Start-up jobs are currently listed here.

• Venture Capital Careers lists all the Australian Venture Capital Jobs available here.

  • Square Peg is looking for portfolio analysts, Antler would like some scouting analysts, Giant Leap is looking for an investment manager, and Archangel is looking for a VC Associate to join their team!

Accredited Tweeters

Vibe Check

• Jessy Wu (Afterwork Ventures), for those playing along, posted last week on LinkedIn that the Australian start-up ecosystem was a little too nice. It was picked up by the SMH following a very lively discussion here.

• Square Peg co-founder Paul Basset started a dialogue around their early-stage investing perception. It's worth checking out, especially for a few hot takes in the comments.

  • Post one here which kicked off the discussion.

  • Follow-up post two here.

(KaaS) Knowledge as a Service

• Time to Get Fit — an Open Letter from Altimeter to Mark Zuckerberg by Brad Gerstner.

• Toy Markets by Aaron Harris on why some of the largest companies in the world started in very small markets.

• How to negociate with VCs by the Deepak Malhotra from the Harvard Business Review. (PDF)

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