Funding Bulletin Sept Q 2020

In our recent Annual Report for FY20 we revealed that startup and tech funding in Australia remained generally strong despite COVID 19. Techboard data for the September quarter 2020 reveals a much less positive picture with funding levels generally lower across the board, with funding down 47% from the June quarter 2020. Overall funding levels however remained ahead of funding levels for the same period in 2019, up 25%.

Our full data set for the September quarter 2020 is available to our commercial subscribers to be accessed either in the ‘old’ format in a dataset for the quarter or as part of our combined dataset via the all new funding event search engine.

Some key insights from the quarter are as follows:

  • Private funding was down 72% from the June Q. As private investment levels had been increasing during the year, the drop from the Sept Q 2019 was less dramatic, dropping 34%, a lower drop than reported elsewhere, but this is in part due to how Techboard has reported the Judo Bank $400m raise over two funding periods.
  • Techboard captured 78 investments in the September quarter, with an average value for deals of a disclosed value of $6.4m (21 investments were captured that did not have a disclosed amount). This compares an average value for deals of disclosed value of $6.5m Sept Q 2019, but a massive drop from the $18.8m reported deal value average from the June Q 2020.
  • The apparent severity of the drop in funding levels is due largely to a lack of mega raises in the quarter, with the largest private investment being a $57m top-up (of a $250m round by Airwallex which was reported in the June Quarter).
  • The drop in private investments was not apparent in all deal value bands with investments sub $1m being up in number and value from June 20 up 55% by value and 33% by number from 9 to 12. Deals of $1-5m in value were also up in number from 19 to 23, but down 18% in average deal size (dropping $2.73m to $2.25). Investments in the $5-10m range saw a big drop in number from 16 to 9 but maintaining a similar average deal size. Deals in the $10m to $20m range remained relatively static.
  • Despite stark differences between states in terms of  COVID lockdowns, the drop in private investment levels did not appear to discriminate between states, with all states showing a significant drop in overall investment levels. This drop was due mostly to a reduction in the number of larger investments rather than number of deals, with all states only experiencing a small drop in overall numbers of investments.
  • July was the weakest month for the quarter for private investment with $93.8m raised from 23 deals. The number of deals and average value steadily increasing over the quarter to $160m from 30 deals in September and nearing the monthly average number of deals from 2019/20 of 31.25 but well behind the monthly average total raise from 19/20 of $324m.
  • One area that showed strong growth was investments into listed companies, with the number of listings up from 2 in the June Q to 3 in the September with the average raise jumping from $16.4m to $42m. The trend towards listing appears to be increasing with many more developed startups planning to list in coming months, most notably in the fintech space.

We are currently processing our October data but can indicate that overall funding levels will be higher than the monthly average in the September quarter, with an increase in the number of mega rounds with Rokt and V2 Foods raising $112m and $77m respectively.