Techboard is pleased to present this Funding Bulletin for the calendar year to 31 December 2021 covering the period of greatest funding growth the Australian Startup Ecosystem has seen. This funding is enabling the growth of rapidly growing startups taking on international startups coming into Australia as well as the growth of companies taking their products and services to the world.
Back in September 2021 Techboard published very detailed analysis of both FY21 and the four years to 30 June 2021 in two reports, our Annual Report for FY21 and the Female Founder Funding Report. The analysis in this Bulletin is an update of how things have been progressing since our last reports over the six months to 31 December 2021 and considers only venture capital and private investment and considers overall funding levels, analysis by deal size, state and team gender. For a much more detailed analysis of the state of startup funding in Australia including analysis by other factors such as round label, category and investor refer to our Annual Funding Reports covering the financial years and also to our Female Founder Funding Report.
Techboard Data Capture - How you can help.
Techboard has been collecting funding data on Australian Startups since 2017, with a focus on startup funding and investments. Techboard also collects data on who is funding the companies. Most of our data has come from semi-automatic algorithmic collection, supplemented with manual research. We have also recently been starting to supplement this with data from regulatory filings. Techboard has also been supplementing its data with information obtained from Investors and Companies who can report deals directly.
Techboard has recently partnered with the Tech Council of Australia and is its data provider for information on Startups and Startup Funding. Techboard also supplies its data to Australian Governments. To ensure that we are providing the best and most up to date funding data to inform policies and strategies to support the growth of startups in Australia Techboard is now actively reaching out to Startup and Tech investors to validate, verify and supplement the info we have on their investments.
We will be reaching out but you can also contact us to claim your investor profile on Techboard and check the deals we have collected for you.
Overall Funding Levels
2021 saw six individual months where over $1b was raised by Australian Startups so our top end analysis of 2021 will come as little surprise to regular readers. Venture Capital and Private investment levels in 2021 started strongly then went through the roof to the extent that the private funding for the calendar year 2021 exceeded what Techboard captured for the entire previous three years, $9b to $7.5b. What was raised in the September quarter alone was 112% of what was raised in 2020.
Analysis by Deal Size
In our previous reports we had highlighted a concern that our data demonstrated that while larger size investments were growing in size and number, smaller scale, earlier stage investments seemed to be lagging, suggesting that Australia's startup sector could have been facing pipeline issues, with insufficient earlier stage companies getting funded. On analysis of our deal data for H1FY22 and comparing that data to the previous financial years (after adjusting the amounts to account for the period only being 6 months) we were quite surprised to see that there was growth in reported deals across all but the sub $1m size band.
We have yet to fully investigate the the drop in deals in the sub $1m size band but this could be due to a number of factors that are not necessarily an indication of a problem. We have previously anticipated that with the number and scale of investments growing so rapidly the extent to which smaller investments get press coverage may drop, whether due to the perceptions of founders as to how newsworthy a raise might be or journalists' interest in running stories on smaller raises. the drop might also be attributable to the growth in size of early stage investments which Techboard has also previously reported on. This is an issue that we will explore in more detail in our Annual Report for FY22 unless we get to it earlier.
Analysis by State
On Techboard's analysis of VC and private investment by state while all states saw significant growth in investment levels we identified a measurable shift in the proportions of capital flowing into startups by state with a jump from 48% of national investment to 56% flowing to New South Wales startups. The represented a more than three fold increase in investment levels in NSW by value since 2020 and a 32% increase in investments by number of deals.
Analysis by Team Gender
Techboard has continued to identify company founders and analyse our data by the gender of startup founding teams. The analysis of the full 2021 calendar year does not bring any particularly good news for female founders. The year saw a decline across the board of the number of deals (12% to 8%) and amount raised by solely female founded companies (8% to 5%). To some extent the year could be seen as a return to normal for solely female founded companies, with fewer standout large-scale raises by the likes of Brighte or SpeeDX, Teams with at least one female founder also saw a reduction in the share of deals from 36% to 31% but a massive reduction in the share of funds which dropped from 45% to 26%.
Apart from the absolute top raising mixed team startups of Canva, Airwallex, Mable which each raised over $100m and collectively raised over 3/4 billion only two other female founded companies raised over $50m, namely Intelligence Bank and Mr Yum. The largest event captured for a solely female founded company during the year was the partial exit by Zoe Foster-Blake who sold a controlling stake of Go-To Skincare to BWX for $89m valuing Go-To at $177 million.