Arrow

Panic! at the SVB & metrics that matter

16 March, 2023
Panic! at the SVB & metrics that matter | News | Pause Awards
Ignition Lane Wrap monthly
Gavin Appel & Rebecca Eastwood
16 March, 2023
Share

Welcome to Ignition Lane’s Wrap, where they cut through the noise to bring you their favourite insights from the technology and startup world.

Panic! at the SVB
We bring you some breaking news…

Silicon Valley Bank—a banking innovator and stalwart for VCs and startups operating in the U.S. (including many ANZ startups) for the last 40 years—has been shut down by regulators after a shocking 48 hour bank run.

The move comes after SVB announced on Wednesday that it lost $1.8 billion in the sale of U.S. treasuries and mortgage-backed securities that it had invested in, owing to rising interest rates. The bank also said that it was raising more capital and investing into higher-yield products. Panic ensued

Regulators are now in control of the bank. It will reopen on Monday, when insured depositors will be able to access up to $250k in deposits. It may take weeks before remaining deposits can be accessed.

SVB was one of the top 20 U.S. commercial banks, with US$209 billion in total assets at the end of last year. This is the biggest U.S. bank collapse since 2008.


Goings on in Aussie venture land
No more cheap money = fire sales, company collapse and mass redundancies. Yet it might still be a great time to startup – early-stage funding is on the rise, new VC funds continue to sprout, and the war for talent has ended.

Startup State. LaunchVic released its 2022 Ecosystem Mapping Report, finding that Victoria has an early-stage ecosystem valuation of $23.6bn and is home to more than 2,650 startups. “Larger” startups are on the rise, with 32% now having 10 or more employees compared to just 21% in 2018.

State of startups. Cut Through Venture released the State of Australian Startup Funding report. Startups raised $7.4bn across 712 deals in 2022, down from more than $10bn in 2021. Valuations fell by an average of 29%. Later stage deals dived off a cliff in the second half of the year, but early-stage deals continued to climb – deals under $5m up 13% to 428, and deals between $5-$20m remained steady at 158 deals.

Going once, going twice, sold? 34% of investors reported to Cut Through Venture that at least one portfolio company collapsed in 2022. Capital intensive companies have been hit hard, in particular. In December YourGrocer (grocery delivery) collapsed. In January so did Brosa (furniture ecommerce). And in February Openpay (BNPL) called in the administrators.

Sadly, we’ve no doubt there’s more to come. Milkrun (instant grocery delivery) recently laid off 20% of its workforce and shut down its delivery hubs, and is reportedly looking for buyers. Baraja (LiDAR for self-driving vehicles) made around 75% of its workforce redundant.

When billionaires disagree. Sun Cable is also up for sale, after its billionaire shareholders Mike Cannon-Brookes and Andrew Forrest clashed over its direction. Sun Cable plans to link the NT with Southeast Asia, which will make it the biggest solar generation and transmission link in the world.

VC news quickies:

  • University of Melbourne’s new fund Tin Alley Ventures raised $100m. Important given LaunchVic’s report found that only 6% of Vic startups currently commercialise tech developed at a university. We need to get better at this.
  • EVP closed $100m for its fourth fund.
  • Salus Ventures launched a new $40m fund for fields such as defence, robotics and advanced manufacturing.
  • Xero founder and former CEO Rod Drury and investor Atlanta Daniel announced the official launch of Radar Ventures, which has already invested in Psylo, Cortical Labs, Eden Brew, Fable Foods and others.
  • Blackbird promoted Phoebe Harrop, Tom Humphrey and Michael Tolo to GPs.
  • Salesforce cut the local operation of its VC arm.
  • Bailador wants everyone to know it doesn’t suffer from FOMO, confirming it did not invest in any new startups in 2022, “seeing no deals in the hundreds it reviewed that met its quality threshold.”


Doing deals faster than Tiger Global in 2021. It’s been a busy start to 2023 for mining magnates Andrew “Twiggy” and Nicola Forrest. Their investment vehicles have become one of the largest backers of Startmate (startup Accelerator and Fellowship programs), and participated in rounds for SpeeDx’s (molecular diagnostics – $26m raise), Rumin8 (livestock emissions reduction – $17m top up), CurveBeam AI (bone fragility imaging – $25m raise) and Fabrum (green hydrogen solutions – NZ$23m raise).

Climate tech continues to trend. Loam Bio (storing carbon in agricultural soil) raised $105m, Fable Foods (alt meat) raised $12m, MGA Thermal (renewable energy storage) received a $560k grant from Shell, and Sumday (carbon accounting) raised $2m.

Metrics that matter (to VCs)
5 metrics to nail if you are chasing the VC dollar bill y’all (according to Salesforce Ventures investor Jessica Bartos):

  1. Growth: you’ll need to show phenomenal growth, particularly at the early stage. At the earliest stages, investors typically like to see you go from launch to $1m ARR in 12 months or less. From there, remember the acronym of T2D3 – tripling for 2 years and doubling for 3 years.
  2. Net Dollar Retention: greater than 100%
  3. Gross Margin: 70-80%
  4. Growth rate + profit margin: greater than 40%
  5. Burn Multiples: for companies with less than US$25M ARR, less than .5x is best, and for those with $10-25M ARR, less than .8x is better.


Around the world
Making sense of the times. Analyst Benedict Evans released his annual presentation, explaining everything that’s been happening in big tech recently.

The future

ChatGPT everywhere. Microsoft reentered the search wars launching a new Bing, with ChatGPT built in (post by Microsoft’s Head of Bing about the engineering behind it). Github’s Copilot is now live, prompting coding suggestions (Microsoft owns Github). Snapchat added ChatGPT to its chat service. Allen & Overy is using a ChatGPT-based legal drafting assistant. Instacart plans to add a recipe robot.


Meta’s copycat machine is back in action. ANZ is the test ground for Meta’s new new subscription service, à la Twitter. For $20+ a month, Instagram and Facebook users will get a blue “verified” mark, access to better security features, more visibility in search, and prioritised comments.

Amazon on steroids. In just four months, Temu, a new shopping app grew from zero to 44.5 million unique visitors. The Pinduoduo-owned app has now overtaken TikTok, YouTube, and Amazon to become the most downloaded free app in both the Apple App and Google Play stores in the U.S.. What’s more, its spend retention is far higher than similar consumer shopping apps. Customers are hooked. A16z breaks down how and why.

Consumer spend retention


Before we go, a quick note for IWD. Two easy actions you can take to improve gender equality at work:

Consider whether the next roles you hire could be part-time. You’ll be able to attract a wider pool of talent and afford more experienced people with a limited budget.

Take 2 minutes to advocate for better pay (via Georgie Dent) for early childhood educators. There’s a massive shortage of educators. They’re extremely underpaid, despite childcare costing a fortune. Without these people, many parents can’t return to paid work… or talk live on tv:

https://twitter.com/Tweet_Dec/status/1633995657454264320


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.


Let Pause Awards tell your story
Entering first-timers
Check 2023 Pause Awards winners
Winners
Pause Awards Night: the community of champs
Pause Awards Night
2023 Years Summary page is here
Summary Page

Related posts


See who won in 2023


Read more

Category tracks



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.

Awarded to a single entry in a category, Grand Prix is the top accolade in that category. To win the Grand Prix, the entire Judging Board must unanimously agree that the entry deserves the accolade of being the best in that category.

The Growth track is about showcasing how businesses have enhanced productivity and execution to make a significant impact in their market. Entries should highlight innovative strategies that have optimised the customer journey, leading to increased engagement and commercial success. This track is for those who have effectively used their understanding of the market and customer needs to scale their business and achieve notable growth.

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.


Categories


  • Always Evolving New

    Acknowledges a culture of continuous learning and improvement within a company, encourages employee development, and always looks for ways to optimise and innovate operations.


  • Big & Mighty Culture New

    Recognises companies (51-1000 employees) for their exceptional efforts in cultivating a culture that champions innovation.


  • Diverse Co.

    Celebrates workplaces dedicated to fostering innovation through a vibrant tapestry of diverse talents and perspectives.


  • Small & Mighty Culture New

    Applauds small teams of fewer than 50 employees for their remarkable ability to foster innovation and set new benchmarks in their domain.


  • Work Sweet Work

    Acknowledges companies that have achieved extraordinary employee engagement, satisfaction, and retention, creating an exemplary workplace culture.


  • Company of the Year

    Honours an outstanding company that not only showcases exemplary leadership and resilience but also demonstrates a clear, quantifiable impact over the past year.


  • Customer Obsessed New

    Applauds prioritisation, understanding and meeting the needs and expectations of their customers, including feedback, personalised services and ensuring high satisfaction.


  • Defiant Ones

    Recognises firms that lead technological innovation, setting new standards and defining the future of their industries.


  • Hammer

    Celebrates companies that have not only defined success on their own terms but have also concretely demonstrated their triumphs over the past year.


  • I Wish I'd Done That

    Applauds ingenious, simple solutions in niche markets that spark a universal sentiment of admiration.


  • On the Rise

    Celebrates early-stage startups, under 4 years, that have shown remarkable progress and success in their initial years.


  • Prodigy

    Recognises young visionaries under 30 with outstanding talents and achievements, setting them apart in their fields.


  • Singularity

    Highlights AI-driven companies that are pioneering new services or integrating AI to create innovative products.


  • Women in Business

    Celebrates female entrepreneurs and leaders who are forging paths for future generations by creating more equitable opportunities.


  • B-Good

    Recognises businesses that redefine commercial success by positively transforming our economic system for the benefit of all stakeholders.


  • Circular Pioneer

    Celebrates companies at the forefront of circular economy practices, making substantial and sustainable differences.


  • Ethical Leadership New

    Commends companies exemplifying leadership in environmental and social governance, setting standards in corporate responsibility and ethical practices.


  • Going Green

    Acknowledges companies leading large-scale sustainable initiatives, addressing critical areas like clean energy and environmental justice.


  • Collab New

    Honours strategic partnerships and alliances with other businesses to leverage complementary strengths, access new markets, and share resources for synergistic growth and innovation.


  • Design First

    Celebrates companies where design is the heartbeat of innovation, engaging the whole team in crafting groundbreaking products.


  • Going Global New

    Applauds companies that have expanded their reach globally, showcasing exceptional growth and international success.


  • Great Pivot

    Acknowledges companies that adeptly navigate change, leveraging insights to pivot towards delivering outstanding products.


  • Movement

    Recognises unforgettable event experiences that resonate emotionally, drive social change, or achieve viral status.


  • New Model

    Honours businesses revolutionising markets with elegant and disruptive business models.


  • Next Level New

    Applauds companies which had successful strategic acquisition and integration of another entity, staff or an asset that allowed them to further grow and scale their services.


  • Wildfire

    Celebrates companies that have rapidly and significantly impacted their marketplace, online and offline, setting new standards for success.


  • Angel

    Honours visionary angel investors who've significantly contributed to early-stage startups, guiding them toward success.


  • C-Suite

    Recognises exceptional leadership qualities in high-ranking executives, showcasing their management and interpersonal excellence.


  • Creative Maverick New

    Honours unconventional thinkers with exceptional abilities to execute typically unimaginable initiatives, expertly coordinate teams, secure funding or successfully launch multiple ventures.


  • Ecosystem Star

    Celebrates individuals who energise and nurture their communities, fostering engagement and advocacy.


  • Future Builder

    Recognises the determination and resilience of founders who've embarked on the challenging journey of starting their own ventures.


  • Quiet Achiever New

    Applauds the unsung heroes whose behind-the-scenes efforts have led to flawless project executions and exceeded expectations.


  • Splash Down Under New

    Acknowledges international companies making a noteworthy entrance into the Australian market, enriching the local business ecosystem.


  • TopCoder

    Recognises developers for their outstanding technical skills, clean code, and collaborative spirit.


  • Venture Cap

    Salutes venture capital firms with a track record of backing transformative businesses, contributing significantly to Australia's economic growth.


  • Visionary New

    Recognises effective leadership by setting a clear vision, motivating the team, and making strategic decisions that guide their business towards its goals.

Early Entries end on:
00d : 00h : 00m : 00s
Enter now