Welcome abroad: Australian founders shed light on raising overseas capital during the pandemic

raising overseas capital

Australian startups Sajari, Zoomo and Aiculus have all successfully completed investment rounds raising overseas capital in the challenging COVID-19 environment.

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With networking events and investor pitches moving online, Sajari CEO Hamish Ogilvy said it’s easier than ever before for startups from around the world to compete with those based in venture capital hubs.

Ogilvy moved to San Francisco from Sydney over a year ago and participated in Austrade’s Landing Pad program to help propel Sajari, which provides customers with artificial intelligence driven site search.

He planned on attending 15 meetups per month to maximise networking opportunities which became much more difficult as the city imposed strict lockdown measures.

“I think it’s actually an advantage to everybody who’s elsewhere, during this time. It’s kind of levelled the playing field.”

Ogilvy said the “serendipity” of living in San Francisco had disappeared as events were put on hold due to the pandemic.

“If you’re going through an investment process, and you want to see a whole heap of funds, the organisation side of that is difficult when they’re all in different places,” Ogilvy said. 

“If you can do them all online, then you have a massive advantage because you’re just Zoom-ing from your house or wherever.”

Despite the challenges, Sajari raised overseas capital in a recent fundraising round that included Pivotal chairman and former Microsoft chief technology officer Paul Maritz. The company also received $3 million in seed capital locally from Tidal. The San Francisco Landing Pad’s advisers and entrepreneur-in-residence were a sounding board for Sajari’s fundraising strategies.

Learn how Austrade helps founders grow their businesses in international markets.

Ogilvy said Sajari was able to remain an attractive prospect because the pandemic resulted in its e-commerce and government clients scaling their platforms. 

“We were lucky that we have a business where COVID has actually boosted us more than anything else.”

 Act fast but always know your worth 

Headquartered from Sydney, e-bike supplier Zoomo (formerly Bolt Bikes) recently raised $16 million as part of its Series A round, raising overseas capital from the US, Israel and Korea. 

Mina Nada, Zoomo’s co-founder and CEO, said the pandemic provided a silver lining for the company, with home delivery trends accelerating.

Zoomo was able to meet investor expectations with the company demonstrating the value of e-bikes for not only delivery riders but also as an alternative to public transport for commuters.

While Zoomo laid the foundations for its fundraising in the year before the pandemic, the company still needed to finalise terms with funds once the economic impacts hit home. Another San Francisco Landing Pad alumnus, Nada was able to access advisory support for Zoomo’s raise throughout the three month program and beyond.

The company was forced to act fast with the investment window closing rapidly. Nada said they accepted term sheets without negotiating as hard as they might’ve otherwise.

“I think if it hadn’t been for uncertainty driven by coronavirus, we might have taken a more assertive approach to negotiating terms.”

Remain bold in the cautious environment 

Aiculus CEO Omaru Maruatona believes it’s important to emphasise the value of your business but also be realistic about raising overseas capital in the current environment.

 “We were very bold in our initial fundraising. We wanted to do really big things.”

The Melbourne-based cybersecurity company successfully raised close to $1 million in seed investment from Singapore’s Cocoon Capital, an impressive result as investors began acting more cautiously once the gravity of the pandemic was realised. 

Omaru said holding onto his vision throughout the process was a key to its success, along with allowing for compromise once the market started to tighten. 

Albeit compromising on the offer, Aiculus still secured enough capital to carry the business through the next stage of growth and potentially unlock a new region in South East Asia.

Singapore has long been regarded as a top city for startups and offers multiple schemes and grants to boost innovation within the country.

Omaru recalls arriving back in Melbourne from meetings in Singapore in March, shortly before Australia announced its initial restrictions on international travel.

“A day after we arrived home the Prime Minister announced that anybody coming from overseas was going to have to start quarantining,” he said. “That’s when I knew things were going to get crazy.”

Being unable to travel to Singapore made it more difficult to access growth opportunities in the region. 

However, Omaru was still able to participate in online conferences, such as a virtual founder showcase arranged by Austrade’s Singapore Landing Pad, providing an opportunity to network with potential investors and customers.

NOW READ: Australian health tech companies in the fight against COVID-19

Australian Landing Pads

The Landing Pads program provides market-ready Australian startups and scaleups the opportunity to land and expand into major global innovation and startup ecosystems, including San Francisco, Tel Aviv, Shanghai, Berlin and Singapore.

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