Good tidings we bring: The 10 biggest capital raises of 2018
Monday, December 17, 2018/
It’s been a huge year for capital raising in Australia, with record-breaking raises galore and the creation of a new Aussie unicorn.
The past 12 months has seen three startups raise more than $100 million, and an additional five that have raised more than $50 million.
By comparison, the biggest capital raise on our list in 2017 was $64.7 million, going to online conveyancing company PEXA. That’s a decent amount of money, sure. But had that raise been closed in 2018, it would only have made fourth place on the list.
Average investment size in Australia is increasing. KPMG Enterprise’s Venture Pulse Q3 2018 report revealed an increase in investment into Australian startups, while the number of deals completed remained the same.
At the time, Benjamin Chong, partner at Right Click Capital, told StartupSmart while the increase in funding reflects a maturing of the market, “we’ve got to make sure we continue to look after the very early stage”.
These are the biggest capital raises of 2018.
1. Judo Capital: $140 million
The biggest capital raise of the year went to small-business lender and challenger bank Judo Capital, which secured $140 million in August from Credit Suisse Asset Management, Abu Dhabi Capital, Myer Family Investments and Ironbridge, Business Insider reports.
In November, the challenger bank secured a $350 million debt facility, which chief operating officer Tim Alexander told StartupSmart would help Judo to leverage earlier investment.
Although Judo is still patiently awaiting its full banking licence, expected to be granted early next year, it’s operating as an alternative lending institution for small businesses.
Meanwhile, competition is heating up in the challenger bank space, with Up launching Australia’s first digital bank, Volt Bank being named an authorised deposit-taking institution, and Xinja rolling out a pre-paid credit card and app.
2. Deputy: $111 million
Squeezing into second place towards the end of the year, HR startup Deputy raised $111 million in Series B funding at the end of November.
The investment round was led by Silicon Valley venture capital firm IVP, and included repeat investment from Open View, which led the startup’s $33 million Series A round in 2017.
Equity Venture Partners and Square Peg Capital also came in as new investors.
Ashik Ahmed, co-founder and chief executive of Deputy, told StartupSmart at the time that, since the Series A raise, the startup has grown from about 80 people to more than 200, tripled the size of its executive team and more than doubled its customer base.
“We’ve been really able to scale the business in terms of what value we’re delivering,” Ahmed said.
3. Airwallex: $109 million
An epic follow-up to its $17.4 million and $10.9 million raises, both of which were in 2017, fintech startup Airwallex raised $108.93 million in July this year.
The Series B raise was led by repeat investors Tencent and Sequoia China, while Square Peg Capital also contributed again. New investment came from China-based Hillhouse, Horizon Venture, the VC firm of Hong Kong billionaire Sir Ka-Shing Li, and Indonesian firm Central Capital Ventura.
The focus on Asian investors was intentional, Airwallex co-founder Lucy Liu told StartupSmart at the time. The startup was trying to build a profile with them.
However, repeat investment was also important.
“We’ve built a good relationship with existing investors, and it means they have a lot of confidence in what we’re doing,” Liu said.
“Our goals are quite ambitious, and they actually support that.”
4. Inflazome: $63 million
Perhaps an unusual contender, Queensland biotech startup Inflazome secured $63 million in funding to test and commercialise its product that slows the progress of inflammatory diseases such as Alzheimer’s and Parkinson’s.
The startup grew out of the University of Queensland’s commercialisation company, UniQuest, and this funding will allow for clinical development and significant growth.
Speaking to StartupSmart at the time of the raise, Inflazome chief executive Matt Cooper said he has big ambitions for the next 12 months.
“We are only just over two years old, and by the time we reach three years we will be a clinical-stage biotech with multiple assets in the field of inflammasome biology,” he said.
5. SafetyCulture: $60 million
Workplace safety startup SafetyCulture secured $60 million in Series C funding in May, although founder Luke Anear admitted he still had money in the bank from his $30 million Series B round in 2016.
The latest round was led by New York investment firm Tiger Global Management, with previous investors also contributing, including Blackbird Ventures, Index Ventures, Morpheus Ventures and Atlassian co-founder Scott Farquhar.
The funding was pegged for developing the technology, growing the team and “taking our products to the rest of the world”, Anear told StartupSmart at the time.
“The best kind of raise is when you don’t need it,” Anear said.
“But it’s also a case of thinking bigger.”
6. CultureAmp: $53.4 million
In July, Aussie employee feedback software startup Culture Amp secured $54.3 million in Series D funding, led by Blackbird Ventures.
The round brought total funding for the startup to more than $100 million since it was founded in 2009, and included big-hitting investors. Both founders of Aussie success story Atlassian got on board, with Scott Farquhar and wife Kim Jackson investing via Skip Capital, and Mike Cannon-Brookes investing through Grok Ventures.
Speaking to StartupSmart at the time, co-founder and chief Didier Elzinga said the funding was a significant validation for the startup, but also adds “more pressure”.
However, he added the real satisfaction comes from seeing your business grow; Culture Amp now has some 230 employees.
“When I see all the amazing people working on the problem we’re trying to solve, you just pinch yourself,” he said.
7. Canva: $50.9 million
In January, design startup Canva raised almost $51 million, valuing it at $1 billion and propelling it into the super-exclusive Aussie unicorn club.
The round, led by Blackbird Ventures, was intended to fuel further growth for the startup, which planned to double its 250-strong workforce.
Co-founder Melanie Perkins told StartupSmart at the time the raise was a vote of confidence, but stressed it’s important not to let a valuation “become a goal unto itself”.
“As a team, we’re all very focused on delivering value to our users and making their lives easier and better. But each raise is an opportunity to pause and reflect on how far we’ve come,” she said.
8. Havven: $39 million
Blockchain startup Havven takes the crown for the biggest ICO of 2018, raising $38.6 million through sales of its HAV tokens in March.
The raise followed Havven’s announcement that $31 million had already been pledged to the raise, and when the sale went live at 7am, it was over in just 90 minutes.
Speaking to StartupSmart at the time, Havven founder Kain Warwick called the sale “really exciting”.
He acknowledged the volatility of cryptocurrencies — a truth that is now more evident than ever — and said there was enthusiasm for a product to mitigate that risk.
“People really see the potential in the project, and we’ve had so much support over the last two or three months,” he said.
9. Athena: $25 million
Home loan fintech startup Athena just makes the list for its $25 million raise at the end of November, however, this is in addition to $15 million raised just six months earlier in May.
The latest raise was led by repeat investor Square Peg Capital, and also included investment from Hostplus and Airtree Ventures.
Athena has now raised about $45 million in total, all before having a full product in the market.
Co-founder Nathan Walsh told StartupSmart it’s been running in “friends and family mode” for the past six months, but that it’s gearing up for a full launch in early-2019, with a goal to lend $1 billion in its first 12 months.
10. Ansarada: $24 million
Sydney-based virtual data startup Ansarada locked in a $24 million raise in March, led by Ellerston Capital and contributed to by Tempus Partners and Belay Capital, the AFR reports.
Co-founder and chief executive Sam Riley said at the time the business would use the funds to plan for a public listing in the next two years.
11. DataRepublic: $22 million
In early-December, secure data-sharing startup Data Republic closed a $22 million Series B round, led by Singtel Innov8, the corporate venture capital fund of communications group Singtel.
Speaking to StartupSmart at the time, Data Republic co-founder Danny Gilligan said the startup’s $10.5 million Series A raise was used to bring the first companies on board.
The Series B is about reaching more partners, and increasing activity between existing ones, he said. The founders are also planning to expand overseas.
“We have been toeing the water in North America for the last year,” Gilligan said.
“We’re hoping to bring on our first customers in those markets.”