Good Morning 

Tomorrow morning we welcome 20 VC's to the stage for our first ever Demo Day FLIPPED, where we'll feature some of the best Pre-Seed and Seed specialist investors in the market. 

They'll each pitch their funds in 2 minutes, so you'll know exactly what they want, how they help, and how founders can reach them. 

Cut Through Angels is also officially live and investing. Whether you're an angel-in-waiting or you have a pile of unicorn stock certificates stuffed under your mattress, we welcome you with wings wide open to join the CTA syndicate. Sophisticated investors can invest with us for as little as $2000. Join the waitlist here.

We'll invest up to $400K in Pre-seed and Seed software startups, and Series-A by special exception. Aside from the software bit, we're sector agnostic; but we need to see a technical co-founder or senior team member already in place. Apply for funding here.

Enough about investors, onto the startups...

September is a notoriously hot month for birthdays (thank you, NYE+9mths) and startup funding announcements. While last month was a long way off the $1.8B funding record set in September 2021, at $463M, it was the strongest month since March this year.

Funding slowdown over? Unlikely. 

Last month we mentioned the current bridge round dynamic playing out in venture land, and we received a ton of feedback from both founders and investors. Fundraising founders say they're just doing as their investor base has directed them: take a small round, at a flat valuation, to hold you out until next year.  Meanwhile, investors are split: some claim that they've had enough of these miniature rounds, while others told us they think founders would be wise to ride out the remainder of the year before swinging for a massive injection.

Big Series B energy returned in September, with Japanese semiconductor behemoth MegaChips, as well as Blackbird, Skip and Mrs & Mr Lucy Turnbull piling into a party round for Morse Micro. In layman's terms, Morse makes itty-bitty WiFi chips that can sit on essentially anything to power said thing's connectivity to the web. The Morse team’s WiFi creds are pretty hilarious if we’re honest… they essentially invented it. God bless them. Along with the investment, Morse has also signed a strategic deal with MegaChips that will accelerate its Asian growth strategy.

Fellow powerful computing power player Liquid Instruments also announced a large Series B round led by Acorn Capital, with support from locals MA Growth, Significant Early Venture Capital, and Powerhouse Ventures, along with the venture arm of Lockheed Martin. 

Workplace wellness technology start-up Sonder, which helps the likes of Woolworths, CBA, Toll and Allianz look after the health and wellbeing of their teams, closed its Series B. Sonder started serving international students in Australia but quickly started winning corporate clients.

Embedded finance start-up Shaype scored a Series C top-up from Regal. Shaype's API first solution allows other financial services and technology companies to embed a full suite of microservices for payments, including KYC, data, insights and real-time transaction monitoring.

Married couple founded vertical-take-off and landing aircraft (aka super future air taxi) startup AMSL Aero raised a chunky Series A round to help edge its emissions-free aircraft closer to production. Last week, my wife and I hung a TV together. 

If we need to work, let's make it work. Property automation platform CIM raised from local investors to scale its solution into Asia and North America. Using CIM property operation teams can generate significant operational efficiencies; improving financial performance, reducing climate impact, and meeting tenant expectations. To scale its voice-activated enterprise virtual assistant platform for non-deskbound workers, ybot raised a chunky Seed round. A broad set of global and local VCs invested in Reejig's workforce optimization and intelligence platform. With Rejig, large organizations can better understand who their people are, what skills they have, and how busy they are.

Plant coverage. Magic plastic startup Lleaf raised a bridging round to support the production of its light-emitting plastic roofing for indoor agriculture – after selling out of product just four months after its first shipment. And for plants forced to go it alone out in the field, Hilldridge Technology raised a Seed round to scale its weather and crop yield insurance solution. Meanwhile, Optomni raised an early round to scale its AI-driven whole trading platform for food farmers selling into the fresh food supply chain. Can someone please fix the entire global supply chain?

Testing times. Deloitte Tech Fast 50 star Evrima, which helps pharmaceutical companies run clinical trials for new drugs, raised fresh funding. Clinical trial automation platform HealthMatch got full throttle support from its prior backers, closing out its Series C. The cash injection will allow the company to rebuild its team, following layoffs this year, and to expand its US presence. Meanwhile, Biotech startup OccuRx announced a cash injection to tip its oral therapy for inflammation and fibrosis into clinical trials.

Business connections. Exiting out of beta mode with a waitlist of 11K+ small businesses, Thriday raised its pre-Series A for its small business finance management platform. The business, which also took the opportunity to switch its name from Thrive, will offer a business account with several bolt-on perks like expense management, invoicing, tax forecasting, and BAS lodgement. Also in the business banking game, Pay.com.au enables businesses to clock up credit card reward points by paying business expenses where credit cards aren’t accepted. Their recent raise will accelerate platform development and customer acquisition strategies. Open data enabler Adatree closed its second funding round, with a long line-up of new and existing investors jumping in on the round. And Datamesh, which helps banks spruce up their aging core payments architecture with flexible, multi-channel payment gateways and terminals, raised a strategic round.

Hardware/IoT topped the funding charts for the first time since we've been publishing. The segment benefitted from a few heavy-hitting mega deals -- some of the largest we've seen since Q1. Usual podium loiterers Healthtech and Fintech took out silver and bronze.

The eastern seaboard states accounted for all but one of the announced deals, and more than 99% of deal volume. We sense that the South and Western Australians may just be being a tad shy right now -- we know of a handful of great startups to have funded but have not announced. All four Eastern states represented in the top ten largest deals.

Median deal sizes at the Angel/Pre-Seed and Crowdfunding dipped well below the levels witnessed in 2021 and 2022 YTD.

Seed and Series A stage maintained their strength, albeit with an absence of outlier larger transactions. It’s important to note that significantly smaller Seed and Series A deals are occurring, but founders and investors are keeping zip-lipped about them.

The median-to-average spread returned to Series B and later deals. This was driven by the return of the outlier-sized deals from Morse Micro and Liquid Instruments. Averages are influenced by outlier deals, while medians are not.

Large deals just aint getting done. Not much more to say about it! 

Funding to 100% female founding teams continues to trend mildly above the long-term average, while the stats teams with at least a mix of genders remain tightly bound to long-term levels.

As rounds progress, the share of participation from non-all-male deals slips, in perfect lockstep. The rose colour take on this could be that female founders are just better at scaling with less capital (thus don't raise)... but I think we all know better than that.

We shall see you at Demo Demo FLIPPED.

– Chris + Sharon.