Techboard is pleased to be releasing the Australian Startup and Young Technology Company Funding Report for FY 2018/19. The report and interactive charts are available for free below. Our commercial subscribers are able to access the full underlying data set.
Across the last two financial years that Techboard has been collecting funding data from across Australia we have collected 1564 funding events from 1194 companies, with 148 companies having funding events in both years. The Techboard team has been analysing this data to identify movements and trends. The Funding Report outlines the findings from that analysis.
Total funding captured by Techboard for 2018/19 was $6.862b by 710 companies from 836 events compared to $3.5b in 2017/18 by 633 companies from 728 events, an overall increase in funding of 96%. 2018/19 saw a maturing of the Startup and Tech sector in Australia with funding events generally getting larger as companies are maturing. The largest growth is seen in the number of funding events of $100m and above, increasing from 2017/18 levels by 166.7% in number and 235% in value from $1.237b to $4.147b. More funding events were captured overall across all funding size bands other than funding events in the $5m-<$10m range.
The slowing of the growth of funding levels which appeared to be emerging during our assessment after the end of the March Quarter has not eventuated. While the most active quarter for the financial year was March with $2.723b in funding (up $26m from what we captured for the quarter in our March Q funding report), the June quarter was very strong with $1.889b in funding, up from $635m in the June Q 2018.
Techboard Co-Founder and CEO Peter van Bruchem in talking about the report said:
“The growth in funding shown in our Report is overall very encouraging and shows the strength and growing maturity of Australia’s growing startup and tech ecosystem and in particular, a maturation of startup and tech investment. What I think we are seeing in Australia at the moment is similar to what is being reported in larger markets such as the US, if on a slightly smaller scale. As the VC investors mature, the size of the funds they can raise increases as does the cheque sizes they can and do write. At the same time the companies they are investing in are growing and needing larger investment rounds to stay on their growth trajectory.”
“With Techboard’s consistent and ongoing monitoring we are able to track the growth of the sector (with funding being somewhat of a proxy for growth) and identify if and when gaps may be emerging.”
Guest Commentator for the Report, Yasser El-Ansary, Chief Executive, Australian Investment Council said:
“Total fundraising into venture in Australia in 2018 grew to the highest level on record, topping A$1.3B in aggregate. The funding report shows that over the past year growth in funding events and size grew largely in-line with the changes that have been evident in capital flows into venture funds over recent years.
The one identified anomaly sits in the A$5M to A$10M funding band, where the data points to a fall in both funding events and overall value in that part of the ecosystem. Given the increase in the size of funds as more institutional-level capital helps to propel the growth of venture in Australia, it perhaps shouldn’t come as a surprise that some gaps in the market might emerge from time to time. How quickly the market responds to such gaps is the important question.
And to that end, at the time of writing there are around 15 venture funds in market, with a number of those funds targeting a range of A$75M to A$150M in capital raise. Funds at that level would typically be expected to participate in funding new ventures in the A$5M to A$10M range, which may be an early sign that the gap which has emerged in 2018/19 will soon be closed by existing and new funds – good news for entrepreneurs looking to secure equity and debt capital investment at that level.”
In December 2018 we opened up access to our funding data to commercial subscribers. Our funding data customers get access to details of all funding events captured by Techboard, Company name, Amount (where known), State, Category, Funding Type, Funder (wincluding here known), Link to Source and a link to the company profile in the Techboard Directory.
Techboard's Customers, Supporters, Sponsors and Partners for this Report include:
Here are a selection of the stories written about the Funding Report:
The most significant funding source at 33% of the funding mix was private investment including Australian and foreign venture capital, corporate and angel investment with $2.274b across 309 investments, this is more than double the private capital of the previous year, representing a 139% increase.
Largest private funding was into Judo Bank which announced in June it had closed on a $340m investment (which later increased to $400m in the 19/20FY). Other records were set in the year with Airwallex raising $100m USD(AUD $141m), Deputy raising $111m and Canva raising $100m.
Closely behind private investment was acquisitions accounting for 29.2% ($1.996b), with the largest acquisition yet to be reported by Techboard (and also the largest funding event captured for the period was for the Property Exchange Australia Ltd (PEXA) which was acquired for $1.604b.
There were another two acquisitions for over $100m for Spookfish ($136m) and Cresopharma ($122m).
Other significant funding sources for the year were public investment via the stock-market (IPOs and Placements) at 19.7% of total funding ($1288m) and Debt financing often described as Venture debt at 14.8% ($1.102b).
The amount raised in new listings via IPO or reverse takeover crept up by 4% to $177m. Listings were bigger but fewer in number, with an average value of just under $20m, compared to an average of 7.7 in 17/18. The biggest and by far the highest profile IPO was that by Prospa raising $109.6m.
There were 100 placements raising $1.176b. The largest placement was by Afterpay in the June quarter where it raised $317m, after raising $117m earlier in the year, bringing its total raised by placement in one year to $434m, a huge 36.6% of all eligible placements for the year.
The largest debt facilities of the year were for Judo Bank ($350m + ) and Moula ($250m).
In a big shift from 2017/18 Victoria has taken the lead from New South Wales with $4.452b representing 65.2% of all funding by value going to Victorian Companies leading New South Wales’ $1508m (22.1%) (in 17/18 NSW led Victoria 44% to 22.4%.)
Fintech as a category absolutely dominated the 2018/19 financial year in terms of reported funding events with 37.4% of all funding identified by Techboard representing $2.568 billion dollars across 94 funding events up from 64 funding events in 17/18 totalling $585m, almost a five fold increase in 12 months. Proptech came in a close second (25.4%/$1735m) (although mostly on the back of PEXA transaction ($1604m).
21 of the 32 fintech funding events of $10m and above was to companies involved in lending, representing 84% ($2.158b) of the value of fintech funding of $10m and above.
Judo Bank also takes the gong for most funded company overall, securing $930m in two private raisings and two debt rounds.
The largest ICO was for cryptocurrency exchange Nauticus, which raised $26.1m. ICOs dropped to 1% of the overall funding mix bringing in just $92m over the 18/19 year, down from 9% of the funding mix and $297m in 2017/18.
The largest equity crowdfunding campaign was for Ridesharing company Shebah who raised $3m on the Birchal Platform breaking the new record set by Xinja ($2.569m) earlier in the month of March.
Grants and awards increased by 34% to $85m with clean energy company Greensync securing the largest grant for the year at $10m.
Reward Crowdfunding was rather subdued with no substantial successful campaigns identified for Australian companies over the year and total funding at $299K across two campaigns (down from $19.48m in 2017/18 across three).