Ignition Lane’s Weekly Wrap: The Great Reengagement, backing Web3, riding the markets & the big local raises

Back to work

Ping pong tables and beer kegs are so 2010. According to LinkedIn’s new Global Talent Trends Report, ‘the Great Resignation’ has morphed into ‘the Great Reshuffle.’ And one of the most influential factors when someone considers whether to reshuffle is culture. The ‘culture’ people seek in 2022 is flexibility and work-life balance. Many even value this more than compensation.

Tech companies battling for talent have taken note. Linktree, for example, says it is putting flexibility at the core of its culture, allowing people to work from wherever they like and providing a $6,000/yr allowance to spend on almost anything they choose – personal wellness, growth, lifestyle or impact.

If you’re yet to come to the flexi party, you’re not completely alone:

Interesting that Meta, which is investing billions into our future being virtual, still wants people to come into the office.

Considering a nose job? Turn your camera off. A new study found that people who don’t like the look of their face on video are more likely to suffer from Zoom fatigue. That probably explains the rise in post-lockdown cosmetic surgery rates around the world.

Collab frenzy. The shift to flexible working has also spawned an investor feeding frenzy in collaboration tech. In January Miro, a visual collab platform used by companies like Cisco, Dell and Deloitte, raised US$400 million at a US$17.5bn valuation. Miro, which is profitable, was last valued at $725m post-money in April 2020 and has grown its user base from 5 million to 30 million in that time. Other notable collab-related raises include Airtable’s $735m round in December ($11bn valuation) and Clickup’s $400m raise in October ($4bn valuation).

Procrastination station. Wordle took the world by storm. On Nov 1 it was played by 90 people. Just three months later, the game, where players attempt to work out a mystery word, is played by millions. Now it’s being snapped up by The New York Times ‘for the low seven figures’.

Aussie VCs & Web3

AirTree’s deeper pockets. Kicking off what’s likely to be a massive year for Aussie VC funds, Sydney VC AirTree announced it has raised $700m for three new funds. Founded in 2014, AirTree currently has around $1.3bn in funds under management and more than 80 investments. The new funds are split: $200m for seed, $450m for growth and $50m for Web3, crypto and DAO structures.

Speaking of Web3 and VC… Over the break Twitter and Block founder Jack Dorsey started a very public feud with Marc Andreessen – the cofounder of mega VC Andreessen Horowitz, which has poured over US$3bn into the crypto and Web3 space to date. Far from being decentralised and owned by the people, Dorsey argues the VCs own Web3:

You don’t own “web3.”

The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label.

Know what you’re getting into…

— jack⚡️ (@jack) December 21, 2021

Relatedly, a16z just closed another US$9bn for its Venture, Growth, and Bio Funds.

GameStop is partnering with Sydney’s Immutable to create the world’s biggest gaming NFT marketplace. As part of the deal, the two companies are looking to launch a fund worth up to US$100m for NFT gaming projects. Further ammunition for Dorsey’s argument above, Immutable is an AirTree portfolio company.

Main Sequence Ventures received $150m under the federal government’s new $2bn commercialisation package. Main Sequence’s funding forms part of Australia’s Economic Accelerator, a three-stage $1.6bn program aiming to help researchers bridge the “valley of death” from research to viable business.

On the investor hunt:

• Blackbird is understood to be planning a $1 billion-plus fifth fund
• Square Peg announced it is in the process of raising US$550m across 2 funds
• Future Now Capital is raising $150m

Wonky public markets

It’s been a wild month of earnings and share price volatility.

Still soaring:

• Microsoft achieved three quarters of 20%+ YoY revenue growth. The last time it saw this kind of growth was in 1999, when its revenue was just $19.7bn. That solid growth is likely prompting the tech giant to make some bullish acquisition moves, including its biggest to date – gaming company Activision Blizzard for US$68.7bn.
• Alphabet reported a strong fourth quarter. Revenue for the full year was up 41% YoY to $257bn – its fastest growth since 2007, when revenue was a measly $16.6bn.
• Amazon unveiled its ad earnings (which it has kept secret for years) were more than $31bn last year – more than Snapchat, Twitter and Microsoft’s ad revenue combined. Revenue climbed 9% in 4Q21, which isn’t spectacular, but investors seem excited by the company’s announcement it will increase the price of Amazon Prime by nearly 17%.
• Snap shares rollercoasted this week, diving 24% on Thursday (thanks to Meta’s weak performance) but then rocketing more than 64% on Friday after releasing its own impressive results. Revenue increased 42% to $1.3bn and it saw its first-ever quarterly net profit.

Crashing back to earth:

• Facebook parent Meta’s stock dropped 26% on Thursday, wiping out more than $200m in market cap, after it reported weaker than expected earnings, flat monthly active and slightly negative daily active user growth in 4Q21.
• Netflix’s user growth is slowing, despite releasing new high-performing content “Emily in Paris,” “Don’t Look Up,” and “You.” It expects to add 2.5 million subscribers during Q1, a far cry from the 3.98 million it added in 1Q21. Its share price is down more than 30% this year.
• On Feb 10 Twitter is expected to report a decline in earnings on higher revenues YoY. Its shares have plummeted around 50% in the past six months.

Local raise round up

As the public markets roll with the punches, startup fundraising is still in full swing. However there are reports that the big international guns such as Tiger Global (which is rumoured to have secured US$11bn of its latest $12bn raise) have scaled back offers and lowered valuations – even after founders have signed term sheets.

Local growth rounds led by international VCs:

Cyara made Aussie venture history, raising $499m (US$350m)—equaling the largest Australian round on record—led by K1. Cyara helps companies like NAB, eBay, Oracle, and Vodafone design, test and monitor digital and voice customer experience systems.

Dovetail raised A$87m (US$63m) led by Accel at a valuation “north” of US$700m. Dovetail is building a productivity tool for user researchers:

Dovetail’s product is software that allows customers to collect user feedback data from NPS (net promoter score) surveys, audio, video and text answers, which are then tagged by teams, machine-analyzed and shared across an organization. The goal, Humphrey said, is to build a relational database for companies to store their institutional knowledge about customers so that they can make faster decisions.

Milkrun, which delivers groceries in 10 minutes, raised $75m led by Tiger Global.

Order some popcorn. This means instant groceries is heating up. You might recall Voly, which delivers groceries in Sydney within 15 minutes, raised $18m led by Sequoia in December and Send raised $3m for a similar service in August.

Internationally, grocery startups—Gopuff, DoorDash, Gorillas, Jokr, Fridge No More, Getir, and Buyk—are losing loads of money with terrible unit economics as they try to win the market (fuelled by US$5.5B+ in VC money since 2020). Last year, Fridge No More was losing US$3+ per order, plus US$70 to acquire each customer. Others admit grocery delivery isn’t the end goal – Gopuff told investors it plans to make advertising “a core tenet of what we do,” a la Amazon marketplace.

Eucalyptus raised $60m led by Mary Meeker’s BOND. Eucalyptus is building a house of brands – think P&G but purely online. Its 5 brands saw the group achieve 400% revenue growth in 2021: Pilot (men’s health), Kin (women’s fertility and telehealth service), Software (skincare), Normal (sexual wellness), and the latest addition – Juniper (menopause service). What’s next? “Obesity management” aka weight loss and expansion into the UK.

Construction/property: HappyCo (tools and data for property lenders, investors and asset managers) raised $72m. EstimateOne (tender workflow software and construction marketplace) raised $35m led by Potentia and Leigh Jasper. OwnHome (rent-to-buy) raised $31m from Square Peg and Commonwealth Bank. Buildxact raised $18.5m led by Regal. RentBetter (property management) secured $1.9m in funding.

Education: Vivi (wireless screen mirroring and digital signage for schools) raised $26.5m (US$20m). Continu (corporate learning) raised $19m from Five Elms. saasguru (Salesforce, ServiceNow, AWS training) raised $1.3m led by Square Peg.

Logistics & supply chain: CartonCloud (3PL WMS) raised $12m. Liftango (helps to plan, launch and scale shared transport projects) raised $10.4m. Explorate (freight booking platform made for importers) raised $7.5m led by EVP. Binary Tech (supply chain IoT devices) raised $1.8m.

Finance: Hnry (automatically pays and files all taxes for self-employed people) secured NZ$16m led by Left Lane Capital at a valuation of more than $100m. Send Payments (FX transfers & payments) raised $5m. Instant (online checkout platform – “we want to be the Amazon Marketplace of ecommerce”) raised $2.2m in Australia’s largest pre-seed round from Blackbird and others.

Health: HeathEngine (health booking system) raised $30m. Mosh (men’s health services) raised $25m led by Parc Capital Corp. Formus Labs (transforming orthopaedic surgery) raised US$5m. Samphire Neuroscience (wearable neurotech for menstrual-cycle related challenges) raised from AfterWork and HAX.

Sports: iNSPIRETEK (wellness app aimed at addressing mental health issues faced by young athletes) raised $2.5m. Lumin Group (analyses athlete’s health data to help better understand their recovery patterns and readiness for team selection) raised $1.15m. VALD Performance (human measurement to help health and performance professionals make better decisions) raised from the Queensland Investment Corporation.

Agriculture: Geora (traces crop data using NFTs to create better lending outcomes for farmers) raised $1.5m from NAB Ventures. Cropsy Technologies (visioning system for crops) raised NZ$1.5m. Protag (IoT device for cows to monitor the animal’s health, location, grazing and breeding habits) raised NZ$1m.

Other: AskNicely (NPS tools) raised $45m (US$32m) led by Five Elms. Lifelenz (workforce management) raised $32m led by Tidal Ventures and Ellerston. TradeSquare (wholesale marketplace) raised $28m led by Tiger Global. Alta (virtual reality game studio behind ‘A Township Tale’, which spent seven weeks at number one on the Oculus charts) raised US$12.4m co-led by Makers Fund and Andreessen Horowitz. Checkbox (no code app workflow and automation platform) raised $6.3m. CredShare (credential management eg university degrees, vax certs) raised $2.7m. Gathered Here (end-of-life services – wills, probate etc) raised $1m from Common Sense Ventures.

Exits & empire building

Great to see Aussie tech increasingly make plays to gobble up other startups around the world. And on the other side of the deal table, as more local founders get their exits, more smart money should flow into the startup flywheel. Wins.

Texas-based IDERA acquired Yellowfin BI. Founded in 2003, Yellowfin was initially focused on data analyst-centric tools, but evolved to add user-centric analytics and embedded business intelligence tech, enabling developers to add BI functionality into their own apps. IDERA has a suite of productivity tools for technical teams who manage complex data environments.

Octopus Deploy popped its acquisition cherry, buying Sydney-based Dist, a cloud-based container registry and artifact repository, for an undisclosed amount. The two companies will combine their technology and expertise to streamline the software deployment process.

Atlassian acquired Percept.AI, which offers an automated virtual agent support solution (think chatbot) based on a proprietary AI engine for natural language understanding.

Canva made its fifth acquisition, snapping up data visualisation tool, Flourish. UK-based Flourish lets users can create engaging interactive charts. Canva just hit 75m users!

The world’s biggest beauty and wellness bookings service, Fresha is acquiring Australian booking tool Bookwell “in an all-scrip transaction that puts an eight-figure value on the Australian business.”

Uber acquired peer-to-peer car sharing startup Car Next Door for an undisclosed amount. Attitudes towards car ownership and mobility have shifted dramatically since founder Will Davies first pitched Car Next Door on Shark Tank in 2016. To date, the platform has facilitated almost 1 million trips, with about 5,000 cars and 137,000 active borrowers.

UK-based HungryPanda acquired Melbourne-based, Asian-focused food delivery business EASI for around $50m. EASI was founded in 2014 and has 1.5m users, about 20,000 merchant partners and about 25,000 delivery partners in 30 cities across ANZ, Japan, the UK, US and Canada.

Marley Spoon acquired Chefgood, which targets the health-conscious consumer, for $21m.

Block (fka Square) completed its acquisition of Afterpay. The deal was first announced as an $39bn all stock acquisition. However in the six months it’s taken to settle the deal, Block’s shares have dropped around 55%, resulting in Afterpay shareholders receiving just $20bn worth of Block shares.

That’s a wrap! We hope you enjoyed it.

Bex, Gavin and the team at Ignition Lane