The 10 biggest capital raises from Aussie startups so far this year

From PEXA to Power Ledger, the Australian startup scene has had some serious money flow in over the course of 2017 from both high-profile venture capitalists and emerging funding methods.

While the amounts raised vary from company to company, what these innovative startups want to do with their newfound funds is similar: expand internationally, hire great staff, and develop their products.

So while hundreds of fantastic early-stage startups have also raised smaller amounts over 2017, here are the 10 of the biggest capital raises in Australia, where they came from, and where the money’s going.

1. PEXA

How much: $64.7 million

Who from: Link Group

How the funds will be used: Prepare to list and develop new services

Topping the list for capital raises so far this year is one in online conveyancing company PEXA, with existing shareholder Link Group boosting its stake in the fast-growing company through a $64 million cash injection, reports Fairfax.

The company, which was founded in 2010, will use the significant raise to prepare to list on the Australian Securities Exchange between September 2017 to September 2018, with chief executive Marcus Price telling Fairfax there are “three windows” for listing in that time frame.

“We’re looking to create new channels, pathways to PEXA and looking to more deeply integrate ourselves into the property ecosystem,” Price said.

2. Saluda Medical

How much: $53 million

Who from: Led by Action Potential Venture Capital

How the funds will be used: To support clinical trials and further commercialise products

Medical device designer and manufacturer Saluda Medical raised $53 million from investors in May this year. The company was founded in 2010 and its current flagship product is a spinal cord stimulation system for patients with chronic back pain.

“We are encouraged by the international clinical results to date, and believe Saluda’s technology can potentially provide various clinical benefits to patients. We are very pleased to have Saluda among our portfolio of innovative bioelectronic companies,” said Action Potential Venture Capital partner Juan-Pablo Mas in a statement.

3. ZipMoney

How much: $40 million

Who from: Westpac

How the funds will be used: Expand reach and hire staff

When buy-now-pay-later fintech startup zipMoney raised $40 million from big four bank Westpac, founder Larry Diamond said it was a “coming of age for fintech here in Australia”, signalling that big banks are now on board with investing in smaller financial players.

“Banks are sitting on wonderful infrastructure that fintech companies can use to turbo charge their growth. For Westpac to do this is a huge statement from them to say, ‘we are happy to back fintech [in Australia]’,” Diamond told StartupSmart at the time.

The founder also said the funds will be used to “triple down” on hiring staff in the data analytics and processing space, with the company currently focused on the Australian and New Zealand markets.

ZipMoney co-founder Larry Diamond. Source: Supplied

4. ROKT

How much: $34.5 million

Who from: Moelis Australia, Square Peg

How the funds will be used: Expand to Europe, and then Asia

Marketing tech startup ROKT first raised a $19.4 million Series B funding round in February this year, but then revealed in June it had raised an additional $15.1 million, bringing the total amount raised in the Series B up to just shy of $35 million.

Speaking to StartupSmart at the time of the initial raise, ROKT co-founder Ben Voltz provided his best tips for aspiring entrepreneurs, which he learnt from building ROKT out of a small marketing company started in his co-founders house in Sydney.

“I’ve seen too many of these entrepreneurs go out [to meet investors] and not give equity away … ultimately, you’re freezing up your ability to move forward with great people,” Voltz said.

“A small piece of larger pie is much more valuable than a large piece of a small pie.”

5. Power Ledger

How much: $34 million

Who from: Initial coin offering

How the funds will be used: Deploy successful trials in India, expand staff

Power Ledger made waves this year after effortlessly raising $34 million through one of the hottest new fundraising methods: initial coin offerings or ICOs. The energy trading startup was one of the first Australian companies to embrace the new cryptocurrency focused crowdfunding method, and has been one of the most successful.

The price of the company’s POWR token has tripled in price since it was listed on global crypto markets, and Power Ledger co-founder Jemma Green told StartupSmart the company will be using the funds to “successfully deploy” its product in a series of trials.

“We want to focus on the democratisation of power and really using our resources efficiently to demonstrate leadership in that area,” she said.

6. Airtasker

How much: $33 million

Who from: Existing major shareholders

How the funds will be used: Launching into London, expanding customer support, hiring more development staff

Airtasker’s $33 million Series C raise is a cool $10 million more than the company’s $22 million Series B raise in 2016, and brings the total amount of venture capital poured into the freelance jobs marketplace up to more than $50 million.

The team didn’t set to raise as much as it did, but after significant interest and support from its investors, founder Tim Fung said it was “good to take on the extra fuel to fuel our mission”.

The money was used to launch the startup’s offerings in London, which Fung said was “a really large and exciting market” with “nothing similar to Airtasker” already available.

“What we achieved in three-and-a-half years in Australia we are trying to do in nine months [in London],” he said.

Airtasker co-founder Tim Fung (right) with Airtasker’s UK country manager Lucas London. Source: Supplied

7. Deputy

How much: $33 million

Who from: OpenView

How the funds will be used: Grow into the United States, United Kingdom and Philippines.

Team management and employee scheduling software startup Deputy snuck into 2017’s top raises with a $33 million Series A round in January, with co-founder Steve Shelley telling StartupSmart the business had been self-funded for the past eight years prior.

Boston-based venture capital firm OpenView led the funding round, and Shelley said it was daunting dealing with a VC who sees “6000 different companies a year”, but the experience provided a great deal of validation for the company.

“Validation is very important [and] it comes from believing in yourself and what your product can do, and having customer examples [to demonstrate] what a difference it has made,” he said.

8. Unlockd

How much: $30.8 million

Who from: Axiata Digital

How the funds will be used: Expansion into Malaysia, India and Singapore

Unlockd’s simple premise of providing targeted ads on user’s mobile phone lockscreens has resonated with investors, with the company locking in a massive $30 million Series B in May this year, despite co-founder Matt Berriman telling StartupSmart raising funding past seed and A rounds is “hard”.

“Many never make it past a seed or Series A so it’s a huge testament to the team who continually deliver day in, day out,” he said

Berriman believes startup founders should focus on “allowing enough time to raise the funds”, saying it will always take longer than you anticipate. The company’s funds will be used for increasing its international team, and growing into Asian markets.

9. HealthEngine

How much: $26.7 million

Who from: Sequoia India

How the funds will be used: Fund acquisitions, develop new products

“With the money comes greater ambition and greater expectation,” HealthEngine co-founder and chief executive Dr Marcus Tan told StartupSmart in April.

Healthcare marketplace HealthEngine raised $26.7 million earlier this year and plans to use that cash to develop new products and hire “smart, capable” talent, even though Tan said there’s a temptation to spend it “really quickly”.

“We’ll be looking at basically trying to embed all those hires [while] looking at things like acquisitions … [and] extending the product suite,” he said.

10. CultureAmp

How much: $26.4 million

Who from: Led by Sapphire Ventures

How the funds will be used: Doubling the number of employees

After first raising $8 million in Series A funding in 2015, and $US10 million in 2016, people analytics startup CultureAmp landed a further $26.4 million in funding this year. The round was led by Silicon Valley giant Sapphire Ventures, with the fund’s principal Kevin Diestel also joining the company’s board of directors.

At the time of the raise, CultureAmp co-founder and chief executive Didier Elzinga told StartupSmart raising funds is a “balancing act” of maintaining investor relations and building out your business simultaneously.

“The challenge is that fundraising is time-consuming. If you don’t watch your time, you end up telling everyone what you’re doing and you don’t have time for your business,” he said.

Along with using the funds to double the number of CultureAmp employees, up to 240, Elzinga is aiming to reach 10,000 customers in the next three to four years.

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