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M&A green shoots & scandal central

10 November, 2023
M&A green shoots & scandal central | News | Pause Awards
Ignition Lane Wrap monthly
Gavin Appel & Rebecca Eastwood
10 November, 2023
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Welcome to Ignition Lane’s Wrap, where they cut through the noise to bring you their favourite insights from the technology and startup world.

Big deals, big dollars

Green shoots in the M&A market

Huge. Atlassian will acquire video messaging platform Loom for nearly US$1bn ($US880m cash plus some equity earn out) – a price that’s 36% below Loom’s 2021 valuation of $1.5bn. Its biggest acquisition yet, Atlassian is betting big on remote work and distributed teams. Loom allows users to overlay video with screen recordings – a very handy tool for anyone working asynchronously. Atlassian’s existing collaboration and IT service management apps, including Jira, Confluence and Trello, have more than 260,000 customers globally.

Related data point: Salesforce CEO Marc Benioff on the 20 Minute VC podcast – Salesforce has two different policies on WFH for engineering (just 10 days per quarter) vs. sales and marketing (3 days per week) – “being in person with customers is critical.”
Goals. DevOps automation platform, Octopus Deploy surpassed US$50M in ARR. From the CEO:

Octopus Deploy

Can-do no wrong-va. Canva’s annualised revenue is now a whopping AU$2.7bn – up 21% from figures reported in March. It also unveiled a suite of generative AI tools (video, audio, imagery and text) alongside a $200m fund to pay creators royalties for using their content to train its AI engine.

Tiny $50m deal. Letterboxd, a beloved film reviews and social network platform that took off during the pandemic, has been acquired by Canadian investment firm, Tiny. The deal values NZ-founded Letterboxd at $50m+.

Blockheads. Fireblocks (backed by Sequoia and Coatue) has acquired BlockFold, a Melbourne-based startup that helps financial institutions build blockchain-based systems. BlockFold also happens to be one of our incredible clients!

On Cloud 9. Telstra acquired cloud services business Versent for $268m. Melbourne-based Versent reported $130m net revenue last year and employs more than 500 people. It also owns Stax, which provides a self-serve cloud management platform.
For sale. Grok and AirTree backed superannuation and investing startup Spaceship is reportedly shopping around for buyers.

Spill the tea: Scandal central

Sounds delightful. The AFR again exposed poor culture, substandard processes and bad behaviours at Airwallex (global payments and financial platform), as it prepares to list next year. Most of the revelations are nothing new. Although, it is surprising that Jack Zhang—“an abrasive and aggressive boss, driving staff attrition and a serious conflict with an early investor”—continues as CEO. As one former employee mused, “It’s a good product and company not because of [Zhang], but despite him.” Airwallex has raised more than $1bn to date and was last valued at over $8.6bn. Investors include Square Peg, ANZ’s 1835i, Hostplus, Skip Capital and Grok Ventures.

Get liquid. The Metigy mess continues to unfold (ICYMI: Metigy raised millions off the back of allegedly falsified accounts and product capability claims). It was revealed in Court that, a year before its collapse, investors foresaw a “big risk” and wanted to “get Metigy liquid ASAP,” i.e. reduce their risk by selling or floating the business.

More fraud. Andrew Waters, an Australian banker has been accused by authorities in the U.S. of defrauding wealthy investors, selling them “worthless” shares in an ecommerce company and fleeing to Bali. Tidal Venture’s managing partner Grant McCarthy has also been caught up in the drama.

Cutting the fat. The AFR seems to be on a bit of an investigative warpath against D2C healthcare brands startup Eucalyptus, which just raised a further $8m (in addition to its $50m raise earlier this year) at a $500m+ valuation:

Since the raise, Eucalyptus has ousted a group of about 10 people under the banner of intensified performance standards. The Financial Review revealed the exits, which dented morale. It has also come under scrutiny from the Therapeutic Drugs Administration, which polices rules forbidding advertising for prescription medication, over its marketing [of diabetes/weight-loss wunderdrugs].

After 12 years, Joe Aston wrote his final Rear Window column for The AFR this week. We hope Elaine Stead can sleep a bit easier now.

Shower thoughts: All of this leaves us questioning, morally, should VCs have greater accountability to not fund certain personality types? Or, at the very least, to keep them in check?

Financially, we know that a strong culture is better for business. We only need to look to companies like Canva, Octopus Deploy and Atlassian to see that it’s possible to achieve staggering, sustainable growth without alienating and depleting your team.

But then again, society has us idolising the overinflated egos of the “visionary stereotype,” à la Elon Musk, Mark Zucks, Jeff Bezos.

VC land

Speaking of dicks. California passed a law requiring VC firms to disclose the gender, race, disability status and sexual orientation of the founders they back. The sponsor of the California bill was Australian-based fund, F5, who wants to see the same reporting requirements introduced here in Australia. F5 has made seven APAC investments under its $5m proof of concept fund over the past year, and plans to raise another fund next year.

Like the U.S., Australia has a terrible gender balance when it comes to the distribution of VC funding. Cut Through Ventures Q3 data found that 5% of VC funding went to solely women-founded startups, and 23% went to startups with at least one woman founder. Another study by SBE and Deloitte found that just 0.7% of VC funding goes to businesses that are 100% women-founded and led.

Also trying to help solve this problem, ALIAVIA closed its first fund, totalling $13.5m. ALIAVIA invests in women-led startups, especially those that want to bridge the gap between Australia and the U.S..

Shifting sentiments. Cut Through Quarterly released the Q3 edition of its Australian Venture 

Funding Report. $739m was raised in the three months to the end of September – down 42% on the same period in last year. However investor sentiment is on the up:

  • 57% of investors think that market conditions are better than last quarter, up from 29% in Q2
  • 29% are advising their portfolio companies to fundraise as usual (up from 9%)
  • There are also fewer portfolio companies cutting staff. This aligns to trends out of the U.S. – TechCrunch reported that, after peaking in January, the number of people laid off has declined by more than 90% by September. Some tech companies are hiring again to refill some of the previously axed roles.

Meanwhile, some founders are also reporting that international VC investment terms are much harsher now, e.g. higher liquidation preferences, ongoing dividend payments.

Benchmark. Our friends at Point Nine Capital in Berlin released the 2023 SaaS Funding Napkin, benchmarking startup valuations and what it takes to raise capital at each round of fundraising.

benchmarking startup valuations

Balancing growth and efficiency is more important than ever. The median valuation and round size of a seed or Series A round hasn’t changed much compared to 2021. However a subset of the data is indicating that most companies are somewhat further ahead when they raise their seed or Series A (ARR of $2.5–3m+, compared to previous years expectations of $1–2m).

Good governance

OnBoard released the inaugural State of Startup Governance in NZ, finding that: startup boards have different needs to established ones, the quality and effectiveness of startup boards varies massively, and most founders have not been deliberate or empowered to get the most out of their boards. Packed with loads of practical tips, this is a must-read for founders and directors.

What are the traits of great boards?

  1. Willingness to put in the time and energy, and are engaged outside of board time.
  2. Able to bring out the best out of the CEO and management team, by not only being a guide and a support but also challenging them when appropriate.
  3. Diverse skills and expertise, suitable for what the business needs at the time.
  4. Focused on the key issues and strategy, rather than just compliance, risk and box ticking.
  5. The board includes independent directors and an experienced chair.

If you’d like to chat about how to improve your board or leadership team’s effectiveness, book in for our free Office Hours.

Movement on the ASX

No deal. The board of ASX-listed share brokerage group SelfWealth rejected a $41.2m takeover offer (a premium of 25% of the previous day’s close price) from its competitor Stake on Friday.

No growth. Redbubble was underlying cash flow positive last quarter. However the company is prioritising cost-cutting over sales growth – marketplace revenue dropped 6% from the previous corresponding quarter.

IPO Biggie. Data centre giant AirTrunk is preparing for a $10bn+ listing. If successful, this will be the biggest IPO since Medibank Private’s $5.7bn listing in 2014. Current contracted EBITDA is around $600m.

AirTrunk was founded in 2015 by [Robin] Khuda, who formerly worked as the chief financial officer for Bevan Slattery and Steve Baxter’s PIPE Networks and then managed NextDC’s float in 2010.

It cut the ribbon on its first hyperscale data centres in western Sydney and Melbourne in 2017, and has since grown to be one of the largest data centre players in tier one markets in Asia-Pacific… AirTrunk is planning to build a $1 billion-plus hyperscale data centre in Tokyo dubbed TOK2.

Big Tech

Fact check. Mis- and disinformation about conflict between Hamas and Israel has been rampant on social media this week. The European Commission announced an investigation into X on Thursday over allegations that it spread disinformation. The EC has also sent letters to TikTok and Meta to remind them of their obligation to protect children and teenagers from violent content and terrorist propaganda, and to adopt misinformation mitigation measures.

Anti-competitive? Who, me? The U.S. Justice Department’s antitrust lawsuit against Google is underway. Google is defending claims it used monopoly power in internet search to limit competition, stifle innovation and violate users’ privacy.

Documents used during the trial have been also released, and one email chain in particular has got the internet talking. In it, the Google Ads team puts significant pressure on the Chrome team to roll back a feature that was great for users, but led to reduced search. That meant less revenue for the Ads team, missed sales quotas, missed quarterly earnings, and, the Ads team threatened, lower compensation for everyone at Google.

Meanwhile, Google has been paying Apple billions to be its default search engine. Wild numbers:

So… if Google is a mega monopoly, what does that make Apple?

This comes as Australian founder Matt Berriman battles in Court to prove that Google acted in an anti-competitive manner when it banned Unlockd’s app from its platforms, leading to its collapse.

The State of AI Report 2023 is out. 2023 was of course the year of the LLM, which continues to drive real-world breakthroughs, including meaningful steps forward in both molecular biology, drug discovery and health. One example in Australia is Annalise.ai, which scans chest X-rays and brain scans.

The expert AI predictions this year:

Ai prediction next 12 months

rich.ai. The British territory of Anguilla now estimates it will generate as much as US$30m in domain-registration fees for 2023. With a population of less than 20,000, that figure represents 10% of the territory’s GDP.

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

Bex, Gavin and the team at Ignition Lane

Gavin and Bex make it their business to know everything going on in technology, startups and venture capital.

Gavin is the Founder and CEO of Ignition Lane. He has 25 years of experience in the technology industry across startups, corporates and venture capital. Gavin was a founding Partner at venture capital firm Square Peg, an SVP of Product and Technology at Experian, and was one of the first employees and CTO at Hitwise – a venture-backed startup that was acquired for US$240m in 2007.

Bex is a founding Partner at Ignition Lane. Driven by curiosity, her career is the epitome of unconventional – spanning technology commercialisation and operations, corporate law, IT delivery and more. Applying this unique mix of skills and experience, she now works with CEOs and their teams to solve problems, drive growth and move beyond the status quo.


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The Culture track seeks entries that exemplify the development of an inclusive and collaborative workplace culture, crucial for organisational success and growth. Submissions should illustrate transformative strategies implemented across core business functions, reflecting expertise, leadership, and a clear vision. These strategies should demonstrate a positive impact on the business, its employees, stakeholders, and customers, showcasing how a nurturing culture contributes to overall growth and innovation.

The Excellence track celebrates businesses that have demonstrated remarkable success and impact within their industry, regardless of their size. Entries for this category should illustrate how the business's strategic execution, guided by visionary leadership and exceptional expertise, has significantly influenced the industry. The focus will be on the tangible outcomes of these strategies, highlighting the company's ability to innovate, lead, and leave a lasting impression in its field.

The Good track is focused on recognising companies dedicated to their mission of creating a positive societal impact. Entries should highlight innovative solutions aimed at addressing global challenges such as environmental sustainability, social equity, and community well-being. Successful submissions will demonstrate how their initiatives contribute to significant changes, tackling issues like gender inequality, social imbalance, and injustice, thereby setting a precedent for responsible and impactful business practices.

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The Operators track seeks entries that showcase leadership in fostering innovation within their ecosystems. Ideal submissions will highlight how your initiatives have catalysed the creation of new products or services, bolstered by a culture that uplifts internal teams and the wider community. This track celebrates those who drive progress by empowering voices and forging transformative connections in their industry.


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