Taking a breath — what happened in startupaus in 2018?

The newest members of the AirTree family!

As another year comes to pass, we like to use this time to stop, take a breath and look back on 2018.

Backing world-class founders

We invested $71m and partnered with 13 new companies at AirTree this year — Brighte, MetaOptima, Joyous, Transcelestial, DroneDeploy, Secure Code Warrior, Nura, Inventia, Athena, Huddle, Whispli, +2 unannounced.

This is broadly in line with last year ($67m, 11 companies) and means the AirTree family has now grown to 43 companies in just over 4 years!

What got us excited in 2018?

Each investment has its own investment thesis (links above), but it may help to show how the sectors and tech drivers overlapped in 2018:

Our recent investments

Investing in big ideas, early

We’re seeing more and more bold and ambitious ideas from incredibly talented founders with deep tech or rich product expertise.

Not only is this inspiring, but it also enables us to develop the conviction to invest earlier in a start-up’s journey… this year, a third of our investments were made pre-revenue.

We’re working hard to demonstrate our partnership credentials and earn the right to be the first port of call when founders need capital.

Some recent examples of our pre-revenue partnerships:

  • Rohit and Danesh @ Transcelestial had a combined 20 years experience in engineering, prototyping, undersea cable infrastructure and photonics systems — insane smarts!
  • Majid and Maryam @ MetaOptima both had PhDs in dermatology, image recognition, and statistical machine translation. And Maryam had won a gold medal in the World Congress of Dermatology for creating a computer program that uses images to detect signs of skin cancer
  • Nathan and Michael @ Athena had a combined 50 years of experience, primarily in the banking sector. Michael was also one of the early founders at iSelect
  • Julio @ Inventia completed his PhD 25 years ago and has since been involved in several paradigm shifts in biomedical research

Supporting our portfolio

A large fund enables us to support our founders over many financing rounds. We’re extremely proud of the achievements of the teams in our family which led us to invest $33m into our portfolio companies in 2018.

Talent

Apart from capital, the #1 issue confronting start-ups we’ve partnered with is hiring great people.

Since Andrew Donald joined the team in January he’s:

  • Worked with our founders to place 32 roles — 1/3 were VP-level positions, and another 12 were those hard to find engineering/product talent positions; and
  • Saved our founders ~$1 million in recruitment fees

It was awesome to note that the biggest selling point for most candidates wasn’t flexible working hours, or a ping-pong table…. but a higher purpose. Startups with a real mission-driven culture = best recruiting hack!

Platform

One of the best benefits of a larger portfolio is the opportunity to learn from others at the same stage or slightly ahead — that’s why we launched:

  • AirTime — 100+ founders and exec teams attended expert-led workshops from product management to comms to engineering leadership to data science
  • Functional forums — quarterly meet-ups for groups of execs facing similar challenges in scaling a function
  • Monthly dinners — 150+ founders attended across Aus, NZ, UK, and US — the myriad of conversations with founders was striking both for its diversity but also for its consistency… culture building, talent management and international GTM challenges (particularly in the US) always came up in conversation!

We also launched a program of support services funded by AirTree to support our founders in what can be a tough journey at times. Founder mental health is a massive issue, and we don’t talk about it enough. Sadly investors can sometimes add to the pressure on founders, but a good investor should be a pressure relief valve. That’s our aim.

If you’re a founder and need a recommendation for a someone to help with your mental wellbeing — please let us know. We’ve put together a panel of trusted health and wellbeing experts that have worked with startup founders in the past and would be happy to share this with you.

Another technique to consider is building your own personal board — James talks about how helpful it can be to have a group of people you talk to on a regular basis who are thinking about you, not just your company.

Building a team that’s on a bigger mission

The AirTree team (L to R and T to bottom) — Adam, Emily, Jess, Helen, Eliza, James, Craig, Elicia, Andrew, Justin, John, Jackie, Daniel, Anil

Our founders have bold ambitions, and so do we.

We aspire to build a team with the right investing and operating experience to ensure we can work hard for our founders to help them achieve their mission. This year we:

  • Recruited 4 new hires — Emily, Eliza and Jackie Vullinghs — all with international VC or startup experience, and Andrew with a technical recruiting background that is second to none!
  • Promoted Helen to Partner — Helen brings experience from Accel in the UK, and has been with team since the beginning when it was 4 of us crammed in a tiny office. She has stewarded us through the largest fundraise in Australia, and already has the most direct reports in the AirTree team!
Baby swag!
  • Had 3 new parents in the team — a huge congratulations to John, Elicia and Jess. We’re looking forward to welcoming Elicia and Jess back in the new year, and kitting the little ones out in proper AirTree swag!

A stronger innovation ecosystem in Aus

It’s been a monumental 12 months for the Australian tech industry and it’s becoming a larger, richer and a more collaborative ecosystem.

  • 2018 is the first year $1bn was invested into Aussie tech companies, almost doubling from 4 years ago
  • We saw 3 mega-rounds of $80m+ (Airwallex, Deputy, Judo) and $170m raised in the last week of November — shout-out to Deputy, Huddle, Athena, and RedEye!
  • There are now 79 institutional VC funds and 26 corporate VCs active in Australia
  • International funds continued to pour capital into Aussie success stories — Sequoia, Point Nine Capital, Horizons Ventures and IVP to name a few
  • 3 new venture debt funds are launching in market — Omega, OneVentures and WTI — in addition to PfG who is already active in Australia

This is what really drives us at AirTree — we all know we’ve got a short window of opportunity to help shift Australia from an economy based on pulling rocks out of the ground, to one where our kids can find fulfilling and innovative jobs without having to leave our shores.

The opportunity for Australia

We have an opportunity to create a much more prosperous and creative economy in Australia… but we don’t want to sit back and wait.

We know we need more:

  • Graduates to be joining startups over the big banks — shout-out to Hatch who are helping students find meaningful work in our portfolio;
  • Resources out there to help break-down barriers to starting up; and
  • Platforms for the community to learn from the best and the brightest

A few ways we tried to help achieve this in 2018:

Looking ahead…

We think a lot about where the world is going and we’re privileged to have the chance to discuss and debate the future with some of the best brains in the world.

We expect to see founders continue to tackle more profound, and complex societal problems and we’re particularly excited about the areas where Australia really punches above its weight:

  • Health — Australia has a large centralised database and leading expertise in several fields that will lead to really interesting models in discovery, diagnosis, and delivery
  • Energy — we’re leading the way in renewables, particularly in solar (shout-out to Mike Cannon-Brookes for being a warrior with Government on this issue — #fairdinkum)
  • Education — it doesn’t get more profound than education and we are beginning to see the second wave of tools and models emerge using data and AI to transform outcomes. Watch out for our announcement in the space coming soon!
We were lucky enough to have Michelle speak at our annual investor dinner — our team and LPs were in absolute awe of this incredible woman!
  • Quantum — Australian is home to 4–5 of the top quantum teams in the world including the Australian of the year, Michelle Simmons. We are watching this space carefully and excited about what will emerge over the coming years

We feel lucky that it’s our job to find and work for these companies that are changing our future and we’re looking forward to seeing the new success stories that emerge from Australia and New Zealand in 2019!

Wishing you all a Happy Christmas and relaxing break over summer.

The AirTree team


PS. Struggling for stocking fillers? AirTree’s summer reading recommendations have got you covered (some ideas for the little ones too!)