Overnight Successes

G'day and welcome to Overnight Successes. Your portfolio may be entirely red but OS remains pink as ever. Our LinkedIn page got a revamp this week - chuck a follow here to get Aussie Venture & start-up content right in your feed. 

A quote to summarise the tech and start-up landscape this week. “Growth at any price is just not enough anymore". There have been significant sell-offs across markets this week and tech stocks have been hit hardest. Your crypto wallet might be feeling a little thinner too. 

Weekly Recap

Aussie Venture Capital is in an interesting but 'ok' place at the moment. There's an argument that Aussie VCs were relatively conservative with their valuations even before this sell-off (which is a good thing). Conservative valuations before this sell-off will reduce the likelihood of valuations being downgraded. Plus reassurance was dished out from the top with Blackbird Ventures co-founder Rick Baker saying they don't "mark investments up or down as public markets rise and fall". 

Baker went on to say “What matters more than growth is the fundamentals of the business. How sustainable is the growth? Are unit economics best in class? What’s the quality of the team and culture? These will trump top-line growth any day.” In other words, cash is king.

So if you're a founder, don't be like Robbo from Eric Bana 2000's classic Chopper.

Start-up Retro

Consumer

• 🌱 Carma, a platform to buy quality used cars, has raised $75M from Tiger Global. Tiger also led the Series A in March 2021 when they pumped in $28M into Carma's seed round. Carma isn't a Carsales clone, instead, Carma will take on used car inventory and refurbish and repair those vehicles. Carma allows users to find a car, reserve it and sort out financing and payments within the platform. Each car comes with a warranty and a 7-day money-back promise. Carma plans on using this funding to expand its warehousing to other states around Australia. (Start-up Daily)

Business

• 🌱 Yellow Canary, a platform to combat wage theft and ensure compliance, raises $11M from Parc Capital. Built after the 2015 scandals of wage theft in hospitality and 7-11, Yellow Canary automates payroll to ensure there is compliance with legislation, awards and enterprise agreements. Apparently not needing extra funding, Yellow Canary felt taking on the funds would enable accelerated product development. The software is currently focused on Australian compliance and will look to expand internationally to countries like Germany, Vietnam and New Zealand where compliance is a challenge. George Calombaris has not invested. (AFR)

LegalTech

• 🌱LawAdvisor Ventures, a Melbourne based start-up looking to revolutionise how the law is practised and delivered has raised $7.18M from a series of Angels. This raise brings the total funding amount to $9.3M and includes Google Maps founder Lars Rasmussen. LawAdvisor is most well known for its SaaS products LegalEye and Fibonacci. Both services look to remove administrative tasks from workflows to allow lawyers more time to spend on casework. LawAdvisor has roughly $2M of ARR and will use raised capital to grow headcount and develop its technology. (Business News Australia)

Web3

• 🌱 Layer, a gaming start-up that enables games to utilise IP, has raised a $4M seed round. The marketplace is seen as a win-win for developers and IP owners. Developers are able to easily add assets to the platform while IP owners can collect royalties. The last round was led by Carthona Capital and other investors including a series of angels, Startmate, TEN13 and Flying Fox. (AFR)

Infrastructure

• Earth AI, a Californian & Sydney based start-up that uses AI to find resource deposits has partnered with Aussie small-cap Legacy Minerals. Legacy Minerals will use the tech to search for minerals essential for modern batteries Copper, nickel, cobalt & tin. Interestingly, if Earth AI finds anything juicy they'll receive a 3% royalty on the sales. Earth AI uses a mix of satellite data and old mining reports to locate potential sites. From there, a low disturbance drill rig is used to sample high potential sites. Earth AI raised a $1.1M seed round from Blackbird in 2018 and last raised $5.5M in August 2021. (AFR)

Space

• 🤝 Gilmour Space Technologies, a Queensland based space company looking to develop low-cost hybrid rocket engines, has partnered with the Australian Department of Defence for a $15M partnership. (Australian Defence)

Crowdfunding

• 🌱 Hero Packaging, the global eco-packaging start-up, secured $1.5M in crowdfunding using the Equitise platform. The raise was funded by 745 individual investors. Hero Packaging is known for its compostable mailers and has already shipped to 40,000 customers worldwide. HP opened a North American warehouse in late 2021 and will look to continue to expand in the mature US e-commerce market. (Business News Australia)

Venture Wrap

• 🚀 EGX, a property incubator is looking to raise another $100M to invest at Seed and Series A into the PropTech sector. EGX has previously backed Willow, Reveal & FlNT. (Start-up daily)

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Notice Board

Emoji Language Guide

• 🌱 Start-up raise

• 🚀 Venture Fund Raise

• 🧩 Acquisition

• 🤝 Partnership

• 🏦 IPO

• LaunchVic, Victoria's startup agency, is looking for founders to tackle healthy eating problems. Apply here for $10K in equity-free funding.

• Startmate has opened applications for their Winter 22 accelerator. Applications close on the 29th of May. Apply here.

• TDM Growth Partners is looking to build out it's investment team through its Residency Program. More info can be found here. (twitter link).

Accredited Tweeters

Knowledge as a Service (KaaS)

Alt Startup Capital in Australia by Warwick Donaldson is a very digestible summary of alternative sources of funding other than selling precious equity. Warwick highlights the popular forms of alt financing and runs through the pros and cons. A full list of Funding options is available here. Alternative funding is something to keep in mind when valuations are lowered. 

Podcasting to be a $4B industry by 2024 by Ariel Sharpio (The Verge). Podcasting continues to grow rapidly - both in listeners and products accommodating creators. Dynamic advertising is slowly improving and can now target listeners based on location, age & gender. Time for Overnight Successes to pick up a mic? We think not. 

Venture Q1 Analysis

Credit to CB INSIGHTS for the above. You can find the full report here. 

AirTree ventures are currently winning the race for most investments in 2022. For the full report dissection of Q1 investment trends - hit up our LinkedIn page.