Cut Through Venture

Who writes the best long form essays or posts on Australian startups, entrepreneurship, and VC/angel investing?

Cut Through Quarterly Q3 2024 is here, delivering data on the challenges and opportunities in the current funding landscape. While total funding dropped significantly, some positive trends still give us reason for optimism. 📈📉 Total funding tumbled to $695M, a multi-quarter low, as mega-deals over $100M vanished. But there's a silver lining—the number of deals surged to a five-quarter high, driven by an uptick in Accelerator rounds. ⭐️ This month, we welcomed Phil Morle from Main Sequence for a guest contribution covering the Australian opportunity in Deep Tech, as well as two very different perspectives on exits from David Moss from SecondQuarter Ventures and Blake Hutchison from Flippa.com. Thank you for your contributions. 🥇🔮 Seed-stage investments were busy, representing a third of all non-accelerator deals, while Enterprise Software, AI, and Climate Tech kept their spots as the most exciting sectors. Climate Tech led in deal volume, though ten of its 23 deals were Accelerator rounds. Fintech, meanwhile, led funding with four of the ten $20M+ deals. 🦅👩💻 Female-led startups saw increased representation at the Pre-Seed stage, with 50% participation, while 54% of Accelerator deals included female founders. Despite better participation at early stages, funding share remains lower—just 20% went to female founders overall. 🚀💰 Investor sentiment continues to climb: 49% describe the market as more favourable, and 58% rate deal flow quality as good or excellent. Yet, portfolio health isn't as strong—layoffs and closures are reportedly on the rise. Thanks to our supporters, HSBC, Corrs Chambers Westgarth, Vanta, and GXE, for helping us bring another report to life.

We recently hosted our "State of Venture Debt" webinar, bringing together leaders from three of the most prominent venture debt funds in Australia: Melissa Widner, CEO of Lighter Capital Australia, Matt Allen, Co-Founder of Tractor Ventures, and Nick Gainsley, Partner at OneVentures. Moderated by Chris Gillings of Five V Capital & Cut Through, the discussion delved into the evolving venture debt landscape, its role as a critical funding alternative, and its growing importance in today's market. The conversation was packed with valuable insights, including how founders can leverage venture debt to navigate the shifting tides of today's market, the unique strategies different funds use to support businesses at various stages, and why smart founders might choose debt over equity to maintain control and maximize growth. This is a must-watch if you're a founder or startup finance exec looking to deepen your understanding of venture debt. Tune in to gain practical insights from the experts shaping this growing sector. https://lnkd.in/gxZuh-mr

Each quarter, Cut Through Venture breaks down the venture capital funding flowing to Australian startups. But we don't dig into the increasingly important startup funding source, venture debt. Join Five V Capital's Chris Gillings with his VC moderator hat on for a conversation with three of the most active venture debt professionals in the Australian market: Melissa Widner of Lighter Capital, Matt Allen of Tractor Ventures and Nick Gainsley of OneVentures. They'll discuss everything that they're seeing in the market, and the evolving role of venture debt for Australian startups. Sign up in the comments.

Cut Through Quarterly Q2 2024 is out, and things are looking up. Except for one big problem… 💰💰Funding to Australian startups hit a six-quarter high, with the return of $100M+ mega deals pushing total funding to $1.5B. 🤖🖊️Artificial intelligence deals topped the sector deal count table for the first time after sitting on top of the list of sectors investors are most excited about for a year. 🧔🏻♂️🌲Guest contributor Airtree's Craig Blair has high hopes for the decade ahead, envisioning the ecosystem as a job and wealth creation engine for the Australian economy. 👨🏻💼🧑💼 Investor sentiment continues to improve, with 46% of investors describing the funding market as more favourable compared to last quarter. Additionally, 42% reported assessing more deals, and 30% rated the quality of deal flow as good or excellent. 👩💻🚫 The share of capital flowing to female founders plummeted to a level not seen since 2019. While deal share at the Pre-seed stage hit a high, female-led startups were noticeably absent from large later-stage funding announcements. Thank you to our supporters, HSBC, Corrs Chambers Westgarth, Vanta, GXE, and Deckmatch, for enabling us to deliver another quarterly report. Download in the comments.

OnePitch VC is turning the tables on investors, and having them pitch to Australian founders! Join the OnePitch VC investing panel as they pitch their funds, and tell you why they think they are the best partner to help your startup succeed. Fully virtual live on on May 10. See you there! Signup in comments. Square Peg Alberts Sprint Ventures Aura Ventures Giant Leap Five V Capital Black Nova Venture Capital Investible Carthona Capital OIF Ventures OneVentures Rampersand Tidal Ventures Black Sheep Capital Side Stage Ventures Archangel Ventures

The start of 2024 saw a decline in deals to a five-year low, totalling 66. However, there were a handful of silver linings buried in the data… 💰 Q1 2024 marginally outpaced the first quarter of last year, reaching $703M; 🏋♀️ The quarter also celebrated a standout period for all-female founding teams, who achieved an all-time high in funding share and absolute dollars received in a quarter, and 🌽 The Australian unicorn gang welcomed two new members, Bugcrowd and Deputy. A dig into the data from Q1 2024 underscored a period of adaptation and selective local investment. Much like what's being seen in VC markets globally, the Australian venture funding landscape continues to evolve in real-time, with no two quarters seeming the same. 🙊 Investor sentiment: The Cut Through Quarterly Investor Sentiment Survey depicted a nuanced view. On one hand, the overall perception of portfolio and market health has improved, but on the other, there's been a noticeable rise in layoffs and company closures. Clearly, the period did not show an uptick in transactions, pointing towards cautious optimism among investors. 🤖 Sector highlights: AI/Big Data and Enterprise Software retained their positions on the excitable sector index. The quarter didn't significantly favour any sector in terms of funding volume, but Climate Tech and Healthtech maintained their recent activity, securing a high number of smaller deals. The weaving of "AI" into company descriptions is increasing, which is starting to give .com-era vibes. 📐 Deal size dynamics: There was a notable decline in smaller deals, but at all stages from Seed onward, those deals that did get done were markedly larger than those at the same stage a year ago. This raises the question of whether the "haves and have-nots" market dynamic has kicked in -- where a focus on quality and potential over quantity, means many startups are missing out while others bask in investor demand.. We thank our sponsors, HSBC, Corrs Chambers Westgarth, and GXE, as well as the long list of investors who provide insights via our Investor Sentiment Survey. We hope you enjoy the report.

The team at NextGen Ventures are firing on all cylinders as they continue to make moves towards being Australia’s first student led venture capital fund. Today’s launch of the Student Startup Funding Report is a huge step towards their vision. Dig into the report to learn more about the alpha opportunity that exists in investing in student led ventures, and the enormous opportunity that exists for the Australian ecosystem to back them.

Cut Through Angels, our angel syndicate just went live with our first deal of 2023. If you're an angel, and not already part of the syndicate, sign up at https://lnkd.in/gRNvTbJH -- its free to join, and we only invest alongside Australia's top VCs

That's a wrap! Over the past three weeks, we have welcomed 450+ founders, investors, and startup enthusiasts from across New South Wales, Queensland, and Victoria to celebrate the State of Australian Startup Funding with us. Although the headline figures were down last year, the energy of those who attended our events suggests there is a tremendous amount to be excited about for all Australian innovators and their supporters this year and beyond. Letsgo!