Welcome to Ignition Lane’s Tech Wrap, where they cut through the noise to bring you their favorite insights from the technology and startup world.
Ignition Lane works with ambitious business leaders to apply the Startup Mindset to their technology, product and commercialization challenges.
This shawl is going out free for subscribers on Saturdays. Don’t forget that you can see Gavin Appel every two weeks on the Startup Daily show on Australia Monday at 2pm (because of Anzac Day it is on this Tuesday). If you miss it, you can view the shows of the week here†
Here’s their review of all the big tech news.
Mega Marketplaces and Quick Fails
Mega Marketplaces. envato Andreessen made Horowitz’s Marketplace 100 for the third year in a row. At #38, Envato is the only Australian company to be on the list of the largest private consumer marketplaces.
As a result of the “covid bounceback” Ticketing/Experience, Food & Beverage and Education saw the most newcomers on the A16Z list. It is also a trend that the Aussie homewares retail marketplace My deal spotted – recently launching a new market for activities and experiencesamazed.com.
NFTs were “a huge and important part of the consumer market story,” which exploded in 2021. Locally, the AFL wants to get in on that action and is partnering with Animoca Brands to launch a new NFT marketplace featuring historic football moments and exclusive player access.
Quick failure. Fastthe one-stop checkout startup valued at over $500 million last year, accelerated to collapse earlier this month† Founded by Aussie Domm Holland (now based in SF), Fast originally planned to raise a round with a valuation of over US$1 billion, but investors quickly declined the stats – Fast burned a whopping US$ 10 million per month and producing less than $100,000 in revenue per month. Here’s some more detail about what happened and first hand insight to life at Fast.
Hmm, we’ll just leave this TEDx Talk on leadership here (the tl;dr version†
Trouble in paradise. Global hotel booking site trivago has been fined $45 million for misleading customers into offering “the best price” for rooms. Rather than showing the best deal, Trivago promoted hotels that paid it the highest cost and often compared the price of a standard room with a deluxe room in the same hotel to show that a “discount” was being applied.
Sizzlin’ Bunnings took first place again Power Retail’s Annual Online Retail Awards† Bunnings was also the third most trusted brand in 2021 according to Roy Morgan.
Heads will roll. But things aren’t all rosy at Wesfarmers HQ. Despite the boom in online shopping, catch.comEBIT loss grew to $44 million in H1’22 and total sales fell 4.3% to $315 million. CEO Peter Sauerborn will step down and Wesfarmers’ data and digital head, Nicole Sheffield, will take over. Sauerborn had previously spent 10 years growing Amazon Marketplace – a place that had a very different culture to capture in its pre-Wesfarmers heyday. In other Catch news, it also launched its first NSW fulfillment center this week.
A first for Amazon. Amazon opened a robotics fulfillment center in Western Sydney. The first of its kind in the Southern Hemisphere, the warehouse is the size of approximately 24 rugby fields and can hold up to 20 million items. Meanwhile in the US, Amazon’s warehouse workers in New York dissatisfied with working conditions voted to form a union – the first in Amazon’s 27-year history.
Winners and losers in dareland
According to The latest from CB Insight State of Venture Report† the global VC market is cooling. The median deal size for all types of investors (except angels) fell in Q1’22, with mega-finance rounds declining by 30%. Digital health startups saw funding fall by a whopping 36% (a 6-quarter low), fintech fell 18% QoQ and retail tech 11%.
As illustrated by the collapse of Fast (see above), this market shift creates winners and losers in the corporate world.
Startups that burned inordinate amounts of cash and/or missed the target of investor expectations are now downsizing to save money† Others remain convinced that there is still plenty of dry powder available (provided your stats pile up) and continue to rent at the pace. For example, there are over 12,600 open positions on VC Andreessen Horowitz’s job site for its portfolio companies. The talent shortage arises.
Australia seems to be against the cooling trend for now. According to Cut through companyQ1’22 was another record-breaking quarter with local startups raising $3.6 billion.
And our local VCs continue to raise significant funds:
New funds: Rampersand has a new $40 million seed fund and added Helen Souness as venture partner (former CEO of RMIT Online and Etsy Australia MD). Side Stage VC launched a new $10 million early-stage syndicate and Access to Capital Ventures created a $10 million Emerging Tech fund. Atlassian increased the size of the initial CVC fund from US$50 million to US$110 million.
Major funds on the collection circuit: Blackbird raises approximately $1 billion across three funds. square pin raises US$550 million to focus on SaaS, consumer internet, fintech, health education and the future of work, plus web3 or crypto-enabled business models. OIF Ventures raises $100 million for its third fund and OneVentures raises $150 million for its second venture capital fund.
Super funds flow in cash: Hostplus dedicated $100 million to Carthonas new fund and $75 million to IP Group Australia‘s Innovation Fundwhich will help commercialize leading research from IP Group’s Australian university partners. UniSuper $75 million pledged in UniSeed – the shared investment arm of the CSIRO and four major Australian universities.
Founded in Canberra instaclustr has been acquired by NASDAQ-listed NetApp in a deal reportedly worth more than $500 million. Instaclustr provides NetApp customers with a way to install popular open source databases without having to use the raw open source.
French multinational Schneider Electric acquired Brisbane startup aurtrawhich uses remote industrial sensors to monitor the condition of power transformers, spotting insulation problems, damage and potential failure opportunities ahead of time.
SafetyCulture acquired Australian start-up SHEQSY, an app for single workers, for $6 million. SHEQSY enables employers to monitor employee movements and safety as they perform tasks and sound the alarm if an employee is deemed to be at risk.
Logistical technical upscaling ship pit has come into possession of Premonition in a deal worth $20.5 million. Premonition helps companies’ logistics fleets to optimize and operate their transport network.
News from all over the world
Didi downer. At its IPO last June, Chinese ride-hailing Didi’s shares raised $14. Today they sell for $2. Very soon there may be no public market for the shares at all – it plans to hold a shareholder vote on May 23 to approve the deletion from the NYSE, under pressure from the Chinese government (who “warned” it not to be on the list in the first place).
AI maze. OpenAI announced DALL E 2 – a generative AI system that can create new images based on natural language requests. Pretty amazing:
Fake news. The British Communications Regulator Ofcom has released a study revealing that, shock horrorpeople are bad at spotting fake news and kids are adept at hiding their online lives from parents:
- more than a third of the 14.5 million UK adults who go online are unaware that content online can be inaccurate or biased.
- 69% of adults said they were confident in identifying misinformation, but only 22% were able to correctly identify the tell-tale signs of a genuine post. The statistics are even worse for children aged 12-17: 74% confident, but only 11% competent.
- 64% of 8-11 year olds had multiple social accounts or profiles – half of these have an account just for their family to see.
- More than a third of children (35%) said they had taken steps to prevent a parent or guardian from properly monitoring their online use, such as surfing in incognito mode (21%) or deleting their browsing history (19%) .
Is the NFT mania over or is Jack Dorsey just not cool? Last week, Iranian crypto enthusiast Sina Estavi attempted to sell an NFT of Jack Dorsey’s first-ever tweet for $48 million (he bought it for $2.9 million last year). The top offer was only 0.09 ETH or about US$280.
Billionaire fights. Seemingly out of the blue, Elon Musk bought 9.2% of Twitter, negotiated a board seat, declined that seat and now plans to buy the entire company for $43.4 billion. He is right secured bank loans and bonds to fund most of the acquisition.
oh hello lol
— Elon Musk (@elonmusk) Apr 4, 2022
All the way Elon, ROFL. Anyway, elsewhere in billionaire country, the battle for space supremacy between Bezos and Musk continues. This month Amazon signed a deal to take on SpaceX’s internet satellite constellation, Starlink. So now the pair are competing on missiles, satellite internet and who has the biggest… bank balance.
From the community
Calling all founders in Vic. Help tell the growth story of the Victorian Startup Ecosystem – complete the Startup Genome Ecosystem Survey with LaunchVic to help Victoria grow her talent and capital.
New Pod. Yaniv Bernstein (founder, ex-Airtasker COO, ex-Google) & Chris Saad (product, early Uber, angel investor) launched The Startup Podcast† The duo talks about what makes venture-funded startups different, execution, ideas and fundraising.
Win free office space in Melbourne! Pitch for 12 months free with Creative cubes†
It’s a wrap! We hope you enjoyed it.
Bex, Gavin and the team at Ignition Lane
Watch Gav chatting about all things tech with Startup Daily Tuesday at 2 p.m.!