Ignition Lane’s Weekly Wrap: Xero turns 15, local space race takes off, Hotmail turns 25


Story by: Simon Thomsen Startup Daily

Welcome to Ignition Lane's Weekly Wrap, where they break through the noise to bring you their favorite insights from the world of technology and startup. Ignition Lane works with ambitious business leaders to apply the startup mindset to their technology, product and commercialization problems.

This wrap is sent to subscribers for free every Saturday. Don't forget to watch Gavin Appel talk about the week every Monday at 2:00 p.m. on the Startup Daily show on AufbauBiz. If you miss it, check out the shows of the week here.

Here is your weekly review.

Happy Birthday to a New Zealand tech hero, Xero

This week in 2006, Xero was registered as a company. Fifteen years later, Xero is one of New Zealand's greatest success stories, valued at over NZ $ 21 billion.

To celebrate his birthday, let's look at some of the # 8 wire mentalities (for all non-Kiwis, that means ingenuity and ingenuity) that helped make Xero…

The Domain Name : In a previous life, Xero.com was a fan site for Linkin Park (formerly known as Xero). Instead of just throwing cash at the domain owner, Xero founder Rod Drury flew him to New Zealand for a break. Here, Drury wooed the owner with some good old-fashioned Kiwi hospitality while sweetly persuading him to sell the domain for the fair amount of $ 20,000.

Capital : Around 2006 there was little to no VC money in New Zealand. So Drury and the founding team decided to go public and raise NZ $ 15 million on an IPO in 2007. With just 100 payouts customers ("Xero, named for their revenue," analysts would troll), the listing valued the company at $ 55 million.

It took many years for the broader market to understand the SaaS business model and the potential of Xero. For fiscal year 21 (ended March 31), Xero had sales of NZ $ 848.8 million, profits of $ 19.8 million and revenue per FTE of $ 233,000. Solid. Who is laughing now?

Customers : SMEs are a VERY difficult customer segment to crack. Xero gradually infiltrated the market with a sophisticated sales channel strategy – with a focus on unloved accountants and bookkeepers. Combined with an exceptional customer experience and a gold standard partner program, Xero has gained over 2.74 million subscribers.

Former MD of Xero Australia Chris Ridd (now investor and advisor) told us about Xero's secret sauce:

Xero understood from the start that UX, good design and branding go far beyond a cool logo.

The creation of a great customer experience was certainly in the product, but also in our passionate people, the can-do approach, the playful language, the funny written messages, the speed of response, the great videos, the great events and even the accountants Playing rock & # 39; n & # 39; roll.

We have tried to make every point of contact with customers a great experience that was completely unexpected and different from what they were used to from the other accounting software providers.


Births, deaths and marriages

Births : Harrison.ai and the I-MED Radiology Network have launched Annalize CXR, an AI chest x-ray solution that identifies 124 clinical findings and helps radiologists and clinicians make decisions serves. The Annalize CXR AI model was trained on 821,681 chest x-rays from 520,014 studies including 284,649 patients. The results of the Annalize CXR study were published in The Lancet Digital Health.

Deaths : Onthego was founded by Mick Spencer in 2010 and enabled customers such as schools, businesses and sports teams to design and order clothing and accessories online or through in-store kiosks. It collapsed on May 31, and now administrators are considering prosecuting Wesfarmers' shareholder for more than $ 500,000 for expected or lost revenue related to his JV agreement.

Always think about what could go wrong in contract negotiations, folks.

Marriages: VendorPanel acquired Nimblex. VendorPanel offers procurement software in the US, Canada, Australia and New Zealand. Nimblex develops a range of low-code procurement solutions. In the course of a purchase (instead of a construction), the takeover enables VendorPanel to provide an end-to-end guide-to-pay solution.

Local Fundraising News (AUD)

The big one this week: Skedulo raised $ 100 million . Skedulo, founded in Brisbane, is a workforce management and disposition platform for mobile employees. With clients like DHL, Johnson & Johnson Revenue, Red Cross and Splunk, the company's sales are said to have grown 400% in three years. Skedulo has been used to coordinate coronavirus testing and about 10% of US vaccinations. It wanted to apply this experience in ANZ:

"Knocking on the door of our government and saying, 'We can help, we know how to do that, and it is simply said thank you, but no thanks.' This series of bads Making decisions after bad decisions is incredibly frustrating. "

The round was chaired by SoftBank Vision Fund 2. Fun fact: Microsoft led Skedulos Series B in 2019. At the time, Priya Saiprasad (now a member of Skedulo's board of directors) and Nagraj Kashyap were running Microsoft's M12 VC arm. They have since jumped over to SoftBank and have carried away their Skedulo relationship. Robyn Denholm, Blackbird Operating Partner and Tesla Chair, has also joined the board and succeeds Niki Scevak.

Butn debuted on the ASX after completing an initial public offering for $ 20 million. The fintech offers small businesses advances on payments, including commissions and bill payments, through a platform that is integrated with their existing CRMs. It closed its first day of trading directly at the issue price of 50 cents (USD 80 million market capitalization).

SourseAI raised $ 1.5 million led by Aligned Equity. SourseAI is a forecasting, forecasting and scenario planning platform. Southern Cross Austereo (SCA) also took part in the round and would like to use SourseAI to create more personalization for users of its audio app LiSTNR (Australian Radio, Podcasts, Music, and News).

EVOS raised $ 1.7 million from Autostrada and an undisclosed ASX listed company . EVOS develops energy management and AC charging solutions for electric vehicles and households.

Kāhu raised NZ $ 3 million from Pioneer Capital and Precision Driven Health. Kāhu was spun off from MoleMap to make better use of the technology to analyze images of a patient's skin and identify signs of melanoma.

Spalk raised $ 3 million from sports personalities – including Steven Adams and Greg Norman. Founded by Kiwi, Spalk syncs alternative sports commentary offered by bloggers and podcasters with live broadcasters, and allows broadcast commentators to work from home.

FL0 raised $ 5.1 million led by Blackbird (Investment Notes). FL0 wants to speed up coding with a low-code format – "development acceleration". FL0 charges back-end engineers with the power of coding in a low-code format.

Lyka Pet Food raised $ 6.5 million. Since its introduction in 2018, it has delivered more than 1.5 million fresh meals for dogs.

Gamurs raised $ 7.35 million – $ 2.6 million through convertible bonds from investors including Elysian Park (the LA Dodgers VC group of owners) and $ 4.75 million in venture capital from Marshall Investments and aura. Gamurs is an eSports media agency with more than 32 million monthly active users and revenues of $ 6.7 million for the year ended June 30th. After acquiring US company Pro Game Guides last year, it acquired We Got This Covered last week for up to $ 4.5 million (including milestone payments).

Amaroq Therapeutics raised NZ $ 14 million. The biotech startup that emerged from the University of Otago is researching the use of long, non-coding RNA molecules (the “dark matter” of the genome) as therapeutic targets and diagnostic markers the treatment of cancers such as breast, colon and liver cancer.

Alt. Financing

Race in space. Four leading Australian aerospace technology startups have received $ 14 million in federal government grants under the Modern Manufacturing Initiative:

$ 1.2 million for EffusionTech: low-cost, durable, high-performance liquid-fuel rocket engines.
$ 5.8 million for Romar Engineering: space fluid and motion control products for space missions.
$ 2.3 million for Titomic: spacecraft and satellite parts made from green titanium.
$ 4.5 million for Q-CTRL: Quantum Remote Sensing Payloads for Space Deployment.

Make it rain, brain. 17 of Australia's top researchers received around $ 3 million each (a total of $ 53.7 million) in this year's Australian Laureate Fellowships program. Some of the projects:

Prof. Andrew White: Creating an Energy Efficient AI with Quantum Technologies
Prof. Dena Lyras: how bacteria adapt and function in the intestinal ecosystem and provide insights into intestinal diseases and antibiotic resistance.
Prof. Michael Milford: "Nature’s Best Positioning System", a GPS alternative for automation and robotics.
Prof. Zaiping Guo: the next generation of batteries for use in portable devices, electric vehicles and smart grids.

The debt bet. OneVentures has provided half of its venture loan fund. To date, it has given loans to Shippit, Edrolo, Hometime, Indebted, Coassemble, OneVue, Zoomo, Phocas, Eucalyptus (new) and Hivery (new).

Pandemic recipe: subscription. Elenium Automation is a software company that helps airports automate with touchless check-in terminals, fever screening (Elenium is the only company in Australia and the EU with government approval to conduct automated fever screenings), baggage handling systems and biometric Access to lounges supported. Of course, airlines and airports are struggling hard right now. To prevent customers from being deterred by making a large upfront investment, Elenium is offering a usage-based infrastructure of $ 200 million as a service.

Around the World (USD)

Sue lawsuit. The US Department of Defense (DoD) has canceled a $ 10 billion JEDI cloud computing contract it awarded Microsoft in 2019 because it "no longer meets [the DoD’s] needs." The contract has been on hold since 2019 because Amazon filed lawsuits against the decision, arguing that the Pentagon’s decision was full of “outrageous mistakes” – a result of “undue pressure from Trump”. Now Amazon gets a second chance to bid for JEDI 2.0 without Trump.

The companies are also waging a legal war over a multi-year cloud deal with Boeing worth at least $ 1 billion.

Do you think listing a company is stressful? Try to be Chinese. It was a difficult first week as a public company for Didi, which raised $ 4.4 billion when it went public on June 30th. Two days later, China's Internet regulator launched a "cybersecurity review" on the ride-hailing giant. On Tuesday, the Chinese government then ordered the Didi app to be removed from app stores, while warning China's largest companies that it would tighten oversight over data security and foreign records. Didi's share price is now below its IPO price of US $ 14 – on Friday at close of trading at US $ 12.

VC's newest competition: hedge funds? The trend towards hedge fund ventures is on the rise. Outbrain is the latest to raise $ 200 million in a pre-IPO round from a Boston-based hedge fund, The Baupost Group. Outbrain is an Israeli adtech company that serves clickbait ads under news articles. In September 2020, Outbrain canceled its merger with the Israeli adtech company Taboola. Coincidentally, Taboola was listed on a SPAC last week with a valuation of around $ 2.6 billion.

Ballmer's mild billions. Ex-Microsoft CEO Steve Ballmer is now worth over $ 100 billion! Interesting thread how he negotiated an 8% stake in Microsoft. Good at negotiating, average in the Microsoft CEO.

Microsoft has just hit $ 2,000, bringing Steve Ballmer's net worth to $ 80 billion.

Interesting: When Ballmer joined MSFT in 1980, he was No. 30 employee and received ZERO equity. When he went public in 1986, he owned 8% of MSFT.

How did Ballmer get this share? A contractual quirk.

Here's the story🧵 pic.twitter.com/oX4fuzLE4V

– Trung Phan 🇨🇦 (@TrungTPhan) July 1, 2021

This week in history

In 1994 Amazon was founded. Andy Jassy became CEO this week.

On that day in 1994, Jeff Bezos founded Amazon in his garage.

If he didn't have a garage, there would be no Amazon.

Lesson? If you want to start a company, first build a garage.

– Dr. Parik Patel, BA, CFA, ACCA Esq. 💸 (@ParikPatelCFA) July 5, 2021

Hotmail started in 1996:

That day in 1996: Hotmail launched pic.twitter.com/8Lk6AQ3tay

– Jon Erlichman (@JonErlichman) July 4, 2021

No technology, just continue the theme of the Xero band … 25 years ago, in 1997, Spice Girls released their debut single "Wannabe".

In 2012, an accidental signal triggered 18 minutes of fireworks in 15 seconds.

That's a wrap! We hope you enjoyed it.

Bex, Gavin and the team at Ignition Lane


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Source References: Startup Daily