This Week in Australian Startups #41, 15th October 2023 - Atlassian acquires Loom

Today sees the start of SXSW Sydney , there’s A LOT of events (and unofficial events) on this week - if you’ll be attending I’ll be there most days as well drop me a message if you are too and you’d like to catch up. If you’re unsure which sessions to attend, Jessy Wu from AfterWork Ventures has put this guide together of their top picks.

The biggest news this week by far is Atlassian ’s $975M USD ($1.5B AUD) acquisition of Loom .

In the official announcement on the Atlassian website co-CEO’s Mike Cannon-Brookes and Scott Farquhar share plans on how the integration of Loom into Atlassian’s suite of products will help users;

visually log issues in Jira, leaders will use videos to connect with employees at scale, sales teams will send tailored video updates to clients, and HR teams will onboard new employees with personalized welcome videos

You can also read both the Loom and CEO and CTO share their thoughts on LinkedIn, all very positive as you’d expect on how Loom and Atlassian will be better together.

There’s definitely a lot for them to feel positive about, with Anand Sanwal CEO of CB Insights estimating each Loom founder made a cool $56M, but that any investor after the Series B round didn’t get their money’s worth. Here’s a great breakdown of returns through each round by EquityZen founder Phil Haslett;

• Seed 1: 64x
• Seed 2: 25x
• Series A: 12.5x
• Series B: 4.5x
• Series B+: 2.3x
• Series C: 1.0x

COVID was a great accelerator for many startups, most notably Hopin which ended up crashing and burning in spectacular style when they failed to adjust to life after the remote working boom.

Remote working is here to stay, but the reliance is no longer there and growth for startups like Loom who depended on it means they needed to think of new ways to grow. Just 2 years ago they raised a $130M Series C at a $1.5B USD valuation, to only sell to Atlassian at $975M USD, a $600M USD discount.

In the Atlassian announcement many of the use cases shared are around how teams and customers can benefit from Loom, which is a different use case to Loom’s original value proposition around asynchronous communication between team members working remotely - hitting a peak during COVID.

This is why the acquisition makes a lot of sense for Loom in particular, Atlassian and its tools become the perfect distribution channel, and in turn it will help Atlassian increase customer acquisition, growth, retention and allow them to increase their ARPU with the addition of AI functionality.

In today’s post Zero Interest Rate environment - this is a great deal for both Atlassian and Loom. Atlassian gets a market leader at a healthy discount that will add both strategic and commercial value, Loom gets a healthy exit for almost all investors and employees when another round of funding could have well led to a bigger discount and no guarantees of execution in a more competitive environment.

Top News

Australia

• Kelp Island Australia and Washbox have been selected among 10 others as finalists for this year’s Ocean Impact Pitchfest (Startup Daily)
• Western Australian VC Purpose Ventures adds $8 million to its fund, now worth $45M (Startup Daily)
• Inskin Cosmedics becomes first women-led venture backed by the Australian Business Growth Fund (SmartCompany)
• Aliavia closes $13.5 million fund for women-led startups in Australia and US (SmartCompany)
• Government releases draft legislation for Apple and Google Pay regulation (SmartCompany)
• Apple objects to Australia plan to regulate Apple Pay like credit cards (AppleInsider)
• Liven takes the fight to Square with launch of new Android POS solution for the Aussie market (SmartCompany)
• JET Charge to roll out EV fleet charging infrastructure for workplaces and homes (BNA)
• Airbnb says hotels should also be forced to pay Victoria’s short-stay tax (SmartCompany)
• Telstra agrees to acquire Versent for $267.5M (ARN)
• Selfwealth rejects $41M takeover offer from Stake (BNA)
• Australian VCs could be told to reveal gender, sexual orientation of their picks (AFR)
• Venture capitalists Queensland-bound after govt start-up funding initiative received a staggering amount of interest (AFR)
• Aussie start-ups face ‘much harsher’ terms from US investors (AFR)
• Australian media giants set for Meta standoff as $100M in deals expire (Capital Brief)
• Silentium Defence, a deep tech startup spun-out of the Defence department, has made the first sale of its passive radar system in the United States (InnovationAus)
• Max Marchione and Manning Blackall take Basis Health, a new healthy way to put your diet on autopilot, from launch to $533,520 ARR in 3 weeks (LinkedIn)
• Octopus Deploy surpasses US $50M in ARR (LinkedIn)
• German investment firm Patrizia and Japanese trading giant Mitsui has completed its maiden investment, committing at least $70M towards a solar and battery development program across Australia (The Australian)

Around the World

• California passes law mandating VC firms to release investments’ diversity information (TechCrunch)
• LocalGlobe tops list of most successful ‘unicorn backers’ in EMEA (Sifted)
• Google makes passkeys the default sign-in method for all users (TechCrunch)
• Consumer payments startup Braid, backed by Index and Accel, shuts down (TechCrunch)
• Amazon shuts down Amp live audio service (CNBC)
• John Riccitiello is out as Unity president, CEO, and chairman, effective immediately (The Verge)
• Amazon is set to do with logistics services what it did with cloud computing—and it may be a $100B idea (Fortune)
• Apple could be out $20 billion a year if Google loses antitrust case (AppleInsider)
• Microsoft’s Activision Blizzard deal approved by UK regulators (The Verge)
• Chipmaker Qualcomm to lay off over 1200 California workers (CNN)
• The IRS claims Microsoft owes $28.9 billion in back taxes (Quartz)
• Google tests a news-filled homepage, just like Bing and Yahoo (Ars Technica)

Australian Funding Rounds

• Phasio, a manufacturing design collaboration and quotation software, has raised a $3.8M Seed round led by AirTree Ventures (TechCrunch | The Australian)
• CLT Toolbox, a structural design software to enable simple design of timber structures, has raised a $1.5M Seed round backed by BlueScope Steel’s venture capital arm, BluescopeX, Aconex cofounder Rob Phillpot’s Gravel Road, and Archangel Ventures (AFR)
• Gridmo, a renewable energy startup which accelerates the connection of generation to the grid, has raised a $500K Seed round led by Grok Ventures (Startup Daily)
• X-Hemp, which grows, harvests and processes cannabis to produce a building material called hempcrete, has raised $1.5M through a Birchal crowdfunding campaign (SmartCompany)
• Humpday, a new offline dating app, has raised a $225K pre-Seed round from Antler (SmartCompany)
• Klean Technologies, a sustainability engagement platform for retailers and e-commerce operators, has raised a $750K pre-Seed round from Angel investors (AFR)
• Circular, a startup that offers consumers subscriptions to high-end electronics, has raised a $7.6M USD ($12M AUD) Seed round led by AirTree Ventures (TechCrunch)

International Funding Highlights

• Global HR Technology Leader Harri Raises $43M in Growth Equity Capital (Harri)
• Armed with $40M in fresh capital, fintech Stash says it’s moving toward an IPO (TechCrunch)
• Data transformation startup Prophecy lands $35M investment (TechCrunch)
• Elderly care marketplace Lottie raises £17M Series A (UKTN)