This year was a good one for start-up investment. Globally, early stage seed funding rose by 375% and the local industry welcomed some new funds, along with the rise of crowd funding and the coming wave of crowdsourced equity.
Here are some of the most notable investment stories of 2013:
State of the venture capital scene at the end of 2013
Over 60 venture capital industry leaders gathered for an event held by PricewaterhouseCoopers in October to explore the state of the sector and possible future directions. StartupSmart was there and reported on the event here.
Kar-Mei Tang, head of research at national venture capital industry association AVCAL, told the room the sector was set for significant changes in the coming years as the start-up ecosystem developed.
“The start-up sector has been an emerging force over the last three years and we’re starting to see more founder investors and super angel activity which will filter through to venture capital,” Tang said.
New major firm Square Peg Capital launches
Two investment groups merged to form Square Peg Capital, an initiative with Seek co-founder Paul Bassat. He told StartupSmart they were keen to fill the Series A and B gap in the local funding scene.
“We’ve got the capacity to invest several hundred million dollars over the next few years,” Bassat says. “We have a really good pipeline at the moment. Our investments so far give some indication of the opportunity; although it’s possible we’ll make slightly fewer investments but they’re likely to be a bit larger.”
The two funds prior to the merger had invested $20 million in 12 companies including Canva, NinjaBlocks, bellabox and Vend.
Investment insights
Global investment trends indicated the venture capital and games boom may be ending, with leading start-up investor Jonathan Teo visiting Australia in late 2013, and shared which metrics he cares about when assessing start-ups, and why he backed Instagram, Twitter and Snapchat.
Blue Sky Alternative investments launched a $10 million fund earlier in the year. Their venture director Dr Elaine Stead shared what they look for in the start-ups they back and how the venture capital industry is changing.
Blackbird Ventures also launched this year, and have made 11 investments so far. Managing director Rick Baker shared their insights and investment preferences here.
Crowdfunding and interest in crowdfunded equity skyrocketed
While crowdfunding continues to boom, interest and opportunities for start-ups to explore crowdfunded equity are also increasing, with a new platform launching in December, and visiting Israeli investment expert telling investors the world needed to brace itself for an “unstoppable wave” of crowdfunded equity.
Australian start-ups announcing investments almost weekly
As the start-up ecosystem matures, more and more Australian start-ups are announcing investment deals and expanding internationally.
There are too many deals to list them all here, but notable technology start-up deals include Zenogen, BugCrowd, Recruitloop, Design Crowd, Kickfolio (now called App.io), Kounta, BuyReply, Ingogo, Tiger Pistol, Paws for Life, CoinJar and LiquidState.
For those aspiring to raise investment in 2014, we spoke to one of the Kaggle founders about how they raised $11 million in a few weeks in Silicon Valley and from veteran start-up consultant and investor about his top five tips to genuinely prepare your start-up for investment.
Rose is the current head of growth at Rampersand Ventures. She was formerly a reporter at StartupSmart.
