Coinbase hire, Canva rival, raises: Fundable, Preve, Cuttable

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Gemma Clancy (00:00): The Startup Retro is recorded on the lands of the Kabi Kabi and Wurundjeri people.

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Will Richards (00:07): Good day, and welcome to The Startup Retro, a weekly show brought to you by the team behind the Overnight Success Newsletter, where we help you level up on the Australian startup ecosystem by giving you an insider's view on Aussie startups and venture capital.

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Gemma Clancy (00:17): The Startup Retro is brought to you by Day one, the podcast network for founders, operators, and investors. I'm Gemma Clancy.

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Will Richards (00:24): And I'm Will Richards. In today's episode, we dive into why Coinbase has recruited a former treasury director, what Microsoft entering the design market may mean for Canva, and the broader startup ecosystem. We also touch on the latest annual report on crowdfunding and what's been happening in that space. We also do a bit of a deep dive on our favorite startups this week, including a digital advertising disruptor and a startup that will keep you fit and healthy after seeing the physio. Then, we end the podcast with a fun KaaS on the best reads and listens that we've had this week.

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Gemma Clancy (00:56): All right. Let's jump into the headlines this week, Will.

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Will Richards (00:59): Yeah, and you've done a bit of research on the crypto legislation and some activity that Coinbase is doing in the Australian crypto market. What's been happening?

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Gemma Clancy (01:06): Yeah. It was a really interesting headline. There's not necessarily changes in the legislation just yet. That is probably coming in the next 6 or 12 months, but what was interesting is that Coinbase, which is a US company with Crypto Exchange, is obviously looking to make moves in the Asia-Pacific region because they have hired this guy, David Menz, who's a former treasury director. He previously worked at ASIC as an economist as well, and he's an expert in crypto and crypto trading. Clearly, they've decided that they want to move into the APAC region and that they're going to need experts to be able to navigate the legislation. That's probably going to come into play in the not too distant future, and it probably signals to local players like Swyftx that Coinbase is certainly making moves to be a more prominent player in Australia.

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Will Richards (01:58): Do you think they're leaning on these experts to help advise legislation or interpret legislation once it's been sorted?

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Gemma Clancy (02:06): Yeah. It's a good question. So the industry has obviously been very keen to have a seat at the table when it comes to helping the government figure out how to implement its own legislation. I think now it's probably getting to the stage where they're just wanting to have somebody who can help navigate it, and obviously, Menz would've had an inside look at what they're looking at implementing and have a very, very good understanding of what it's looking like it will end up shaping up to be. Yeah. So I think it's probably about navigating.

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(02:35): What I was really struck by was that, I guess, if an Australian who was working in a government department then went and worked for an Australian company in a similar kind of role, I think there'd be a lot of questions asked as to, I guess, the ethics around that, and it was like, "Is there then issues with non-compete and things like that?" But obviously, Menz is now working for a US company that's headquartered out of Singapore, and so he's probably managed to get around any questions around that. But yeah, super interesting to see that kind of movement happening. I think it comes off the back of a few different movements from US or overseas-based companies looking to move more into Australia. This week, there was another headline around Microsoft entering the design market and potentially rattling the Canva on the Australian market or the design market more broadly.

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Will Richards (03:22): Yeah. I think it's definitely the more broad design market in general because yeah, Microsoft has done what Microsoft do, and they've released a design solution that if you go on the website design.microsoft.com, it has the feel of Canva, and it definitely looks like a direct competitor in exactly what Canva does, so you can use templates and you can make designs from scratch. It's a very Canva-like experience. What made me find this really interesting right now, and I think it's obvious that Microsoft would look at this space because there is basically an opportunity that they can grow into, but it doesn't take long to look back and think about the likes of Slack with Microsoft Teams. So it's very much of that playbook, and I think Slack has struggled in that world since Microsoft has come in, and it's the bundling approach. The product is just slapped on. It's part of the bundle you're already paying for.

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(04:13): So it's going to be interesting to see how this plays out with Canva competing directly now with a product like Microsoft, but what I think is interesting of why it matters potentially to the broader startup ecosystem is we've got a lot of venture funds right now who are raising new funds at the moment, and it's across the whole spectrum. So we saw some fund announcements recently with the likes of Tenacious Ventures, but we've got some of the big players as well now entering the market raising capital. So the likes of Square Peg are raising money at the moment, and they're raising their sixth fund which is an $840 million fund, and then they've got a new Opportunities Fund.

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Gemma Clancy (04:49): Yeah. It's pretty big, and I don't think the rhetoric around it in the media this week has been, "Oh my God, Canva is going to die because Microsoft is going to take over."

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Will Richards (04:58): No.

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Gemma Clancy (04:58): Certainly, the investors, the narrative is, "Good luck. Canva is a great product, and they've spent 12 years building it." So if Microsoft really wants to play in this space, they're going to have to seriously lift their product development game and bring in something that is truly like can compete at Canva's level. But it's still a little bit concerning potentially for existing investors that one of the world's biggest technology companies is trying to play in this phase.

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Will Richards (05:27): Yeah, yeah.

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Gemma Clancy (05:27): If you weren't a little bit worried, I think you'd be probably a little bit naive because Microsoft has done this before and tried to take over, I guess, similar spaces or competing spaces.

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Will Richards (05:39): Exactly, and Microsoft really does play in that enterprise level. We've just seen with Canva Create, they've now launched an enterprise product. So I think it's going to compete directly with the likes of Canva's new product which they're building up for an IPO. They're trying to tell a story about where they're heading and what direction they're heading in and is definitely going to play into some investment banks' valuations, and cost to acquire customers, and those sorts of things now that Microsoft is playing in it.

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Gemma Clancy (06:04): Yeah.

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Will Richards (06:05): But I think when you look at the funds who are raising capital right now more broadly, they're all pointing at previous wins they've had recently in the market, and quite a few of them are pointing at Canva is this golden goose. That's exactly what Paul Bassett called it this week. He said, "Canva is Australian's startup ecosystem's golden goose. It lets us keep playing this game." If those returns start to dip or get competed away from Microsoft, I think it's going to be interesting to see how this plays out more broadly as venture funds go back to institutional investors and ask for more capital. So looking at Square Peg's returns up until now, Canva specifically actually is one-third of their returns in total. So this one business, this one company is such a big slice of what they're looking at and what they're presenting to investors at the moment. So if you see little changes in or big changes in the valuation of that business, their whole return profile completely changes as well.

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Gemma Clancy (07:02): Yeah. Wow, that's a huge impact. I hadn't realized quite how big the impact of Canva was on these portfolios, but that's pretty big.

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Will Richards (07:10): Powerful.

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Gemma Clancy (07:11): Yeah. I think the other interesting market dynamic that's at play here is that traditionally, US companies are looking at markets like Australia and thinking if they want to expand or they want to take over a new market, they will go down the M&A route. But potentially, there's a few factors at play that mean that US companies like Microsoft or like even Rippling looking at coming in who's a competitor to Employment Hero, they're not necessarily looking at Australian companies and going, "I want to purchase a company to grow into that market." They're thinking, "I'll just move into that market and grow more organically."

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(07:46): I think one reason for that is that we've seen in the US, the kind of M&A market has maybe softened because of regulatory things. So like the Adobe and Figma deal didn't go through. Super costly for both sides. I saw that Microsoft had to pay... Not Microsoft. Sorry. Adobe had to pay Figma a billion dollars in a break fee for that contract, so super, super detrimental, and also probably because all these companies in the current economic environment are a little bit maybe more cash poor, they're not necessarily ready to just purchase another company off the bat.

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Will Richards (08:19): Definitely, and

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 like with the Figma deal, you've seen that valuation of Figma collapse since that deal was being pushed through. I think if you were a Figma employee or the founder, you'd be pretty angry at the moment, but it really does come down to legislators and... or not even legislators, but the likes of ASIC, but ASIC in different countries like the European Union and anti-competitive groups basically stopping these deals happening. But I think we're starting to see that loosen, so M&A activities should pick up fairly soon. I dare say if Mr. Trump is elected as president, I think that will absolutely rip and raw, which is my reason why I think a lot of the Silicon Valley people are actually backing him at the moment.

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Gemma Clancy (09:01): Yes.

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Will Richards (09:01): Let's not-

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Gemma Clancy (09:02): We could probably go into a whole new rabbit hole down on the impacts of the US election on Techstars, but that's probably a whole sidecar episode.

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Will Richards (09:13): Yeah. Let us know if you'd like that.

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Gemma Clancy (09:14): Yeah. Well, I saw there was also a new report out from the crowdfunding industry in Australia led by Birchal, but it looks like there's a few more players in that reporting mix now. Did you have a closer look at that report?

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Will Richards (09:28): Yeah. Well, I'm on holiday at the moment, so there's nothing I love better than diving into reports exactly like this. So, actually, I spent a little bit of time with this one, and it was interesting to see it from last year where Birchal basically used their information and publicly-sourced information from the other crowdfunding groups to put the report together. This time, they basically were a bit more inclusive and got commentary from the other crowdfunding groups, which I think is it's good to see the ecosystem coming together in that space.

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Gemma Clancy (09:54): Definitely. Collaboration. We love it.

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Will Richards (09:55): Yeah, and interestingly, there were articles in the media this week that crowdfunding was kind of down or flatlined, which I think is a little bit harsh on what they're saying in this report. What they're saying is the actual number of companies using crowdfunding has increased, but the amount of capital per raise has decreased slightly. So there were basically just more companies raising capital on crowdfunding which I think is maybe a reflection of what's happening broader where more companies maybe need money at the moment to grow or keep growing.

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Gemma Clancy (10:26): Yeah, and the decrease in overall funding is probably just more reflective of the broader market of appetite to spend money in this asset class in general.

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Will Richards (10:33): Yeah. Exactly, exactly. So the headline figures we saw, $64.5 million invested into crowdfunding campaigns, and that was done by 35,000 investors. I would expect you would see some of those investors investing in multiple campaigns. They don't really break that open in the report, but Birchal was the market leader hosting 66 or one-third of the 99 campaigns that we saw for FY24.

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Gemma Clancy (11:00): It's a nice clean number for them, 66-99.

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Will Richards (11:01): Yeah. Exactly. Nice one to point to.

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Gemma Clancy (11:04): That's nice. Yeah.

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Will Richards (11:07): I think that the trends of the industries that raise capital was pretty close to what we saw last year, so food and beverage, which I think as you... Your breweries and those sorts of things raised the most money.

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Gemma Clancy (11:16): Kombucha.

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Will Richards (11:17): Yeah, those sorts of businesses. $19.7 million went into them. The second most popular was healthcare which I always caveat by basically saying those are the cannabis companies. There might be a few more traditional healthcare companies in there, but generally, those are such cannabis companies. So I think it's good just to make that very clear about what the businesses generally are in that space. Then, coming in third was sustainability with $8 million being invested in that space.

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(11:45): But interestingly, I think what we've also seen come out in this week as well with some good reporting from smart company was Birchal has actually done a bit of belt-tightening and unfortunately had to let a few staff go, and their business model, basically, broadly, and the business model for crowdfunding in general is they take a clip of the capital that gets invested in the companies, which for Birchal is 6%. So if there's less money going to the market, basically, there's just less money for them to run the business and try to get to that profit.

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Gemma Clancy (12:13): Yeah. You can understand why, why they had to do that, and it's... I think I saw something also reported that they've probably been smart to do it now while the market is down and try to act as quickly as they can in response to that dip, at least in the overall funding amount, so that when the market inevitably does rise again... and I think the strength of this category is reflected in this report. Hopefully, when it does rise again, they rise with it, and hopefully, they can go back to that more growth mindset.

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Will Richards (12:43): Yeah. It's a sad one. This is for good people at Birchal, so I'm sure they'll be doing some interesting things fairly soon.

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(12:53): So, Gemma, let's jump into the Startup Raises this week. Now, I saw you picked one immediately as soon as we started writing about it in the newsletter because you've got a bit of a background in this space.

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Gemma Clancy (13:02): Yeah, I picked a startup called Cuttable, which has raised five and a half million dollars in a seed round and I chose it because I actually used to work in the advertising industry, and that's the space that the Cuttable team is playing in because they also come from the advertising industry. So what Cuttable does is that it's leveraging this whole new wave of AI automation and content creation tools that's flooding the market, and they've created a platform that will help people scale out their content creation, particularly in digital advertising content.

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Will Richards (13:37): Can I ask a dumb question?

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Gemma Clancy (13:38): Sure.

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Will Richards (13:38): When you say digital ads, I'm thinking of digital billboards that you might drive past on the highway, but are they talking about that, or are they also talking about digital ads you see on Instagram, social media, those sorts of things, or is it both?

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Gemma Clancy (13:51): I think at the moment, the product is largely focused on the digital ads you see on Meta, so we're looking Instagram, and Facebook, and TikTok, and the likes of those, so short-form videos and social static images. They'll probably expand it out from there. The agency that this tool was essentially born out of, which is called Sunday Gravy, great name, they specialize in all forms of advertising like that for really big corporates, and they'll run TV ads and likes of that, but the problem that they're essentially solving is that when you look at, I guess, the workflow of producing a piece of advertising and where the investment goes when you need to produce something, there's a lot of money that goes into the upfront production of an asset. So that's the shooting and all the people that you need to put into filming a piece of content. There's also a lot of money that goes into the talent who will feature in those kind of ads, and it's very hard to see AI go into that space right now and reducing the cost of that upfront production piece.

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(14:52): Then, on the back end of it, obviously, you've got all the money that goes into the media spend, so spending money on TV ads, obviously, on the digital ad platforms like Meta. But where Cuttable is playing is in this middle space where you've got all the great assets that you've filmed, that you've spent a lot of money on, sometimes hundreds of thousands of dollars into producing these visual assets, so photography, videography, et cetera, and you want to make the most of those visual assets, and you want to produce as much content as you possibly can out of those assets so you can maximize your coverage.

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(15:28): The way that advertising has gone now is that back in the day, you produce one TV ad, everyone sits down after the 6:00 news and watches TV, and they see the one TV ad. Whereas, obviously, now, advertising is so prolific when advertisers need to produce so much content even to cut through in the first place, and then volume of content also allows advertisers to create multiple ad variations, and then collect a lot of data on the performance of those ad variants, and then optimize those ad campaigns for optimal success. So what these guys are doing, essentially, using AI to optimize where they can in this overall ad production workflow to maximize spend on both other ends of production and then media spend. So it's really interesting to see, and obviously, they've got a pretty cool team behind it as well who have pretty interesting backgrounds.

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Will Richards (16:21): Yeah. So the one founder that got a lot of headlines this week was Sam Kroonenburg who built and sold a business that he exited three years ago for $2 billion which was called A Cloud Guru which... I think it basically taught people how to get credentials

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 for working on cloud software like AWS and those sorts of things. So, obviously, he's built a pretty substantial amazing business, and he's exited that, which investors love to see.

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Gemma Clancy (16:45): Yeah.

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Will Richards (16:45): But you also know one of the other founders or know of the other founder as well.

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Gemma Clancy (16:49): I don't know him personally, but yeah, I know-

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Will Richards (16:50): Yeah.

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Gemma Clancy (16:51): What I was interested in is the headlines were very much around Sam, it made sense like, "Oh, a startup in tech media," familiar with him from his previous business, and then you also had the fact that Square Peg is the lead investor in this, and then Rampersand was also supported. So that really dominated the headlines in the media this week. 

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What I felt like got lost in the mix this week was. I guess, at least in the business and the startup media, because we're very focused on Sam being an ex-tech startup founder was the makeup of the rest of the team and one of the co-founders who's actually also the CEO of Cuttable, Jack White, he, um, is brothers with this guy whose name I recognized from, um, their LinkedIn kind of people section Ant White and, and is really well known, uh, in the advertising industry.

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He was a. He is a very well-respected creative director who used to work at CHE Proximity and then he eventually left and went to work at Sunday Gravy with his brother, um, who owned the agency. And now he's listed as a creative partner at, um, Cuttable and, uh, his brother, I looked into his background, Jack White, and he also worked at, um, Clemenger, which was super well known and respected, um, Australian advertising agency, part of a big global group of advertising agencies.

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And. I guess that really highlighted to me that, you know, this team really knows what they're doing when it comes to creative. Um, and that is a big focus of the messaging on their website. They talk about the fact that, you know, being able to reduce the time that it takes to produce advertising will allow teams to focus more on producing really good creative.

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And this team certainly knows what creative looks like given their background. Um, so I think, That was kind of lost in the mix this week, but certainly the advertising industry didn't miss it. So you look at Campaign Brief, they covered the fact that Jack White as, um, a respected person, who's an advertising agency owner is starting this new venture and it speaks to the founder market fit and this founding team, um, has is seriously well credentialed for this.

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Will Richards (18:29): I love as well like that's obviously been spun out of this advertising group, Sunday Gravy, but they've also got some really impressive brands already using the platform as clients. I'm assuming they've all come from probably the agency, their agency clients who use this product.

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Gemma Clancy (18:43): Yeah.

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Will Richards (18:43): They may or may not know that. I think they probably do. They probably would get an invoice now from the likes of Cuttable that this platform is being used, Nando's, Catch.com, Penfolds, One Pass, like Medibank. There are pretty big Australian businesses at the moment who are already using this platform, so.

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Gemma Clancy (18:58): Yeah.

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Will Richards (18:59): Yeah, really, really cool. Definitely, check out the website. It's one of the more beautiful startup websites you'll see on the early stage.

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Gemma Clancy (19:06): Yes, it's very well done. Definitely.

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Will Richards (19:08): Which is to be expected in the game that they're playing in, but also, check out their newsletter because we got Rampersand who invested and Square Peg. Both did investment notes for this business which I'd love to see as a bit of a nerd in this space, but it was interesting to see how they both thought about the investment a little bit differently from different perspectives. So, yeah. Definitely. Definitely want to read up a bit more on.

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Gemma Clancy (19:27): Yeah. Super interesting. What was your pick this week, Will?

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Will Richards (19:31): Yeah. So I'm going to be a bit cheeky and talk about two startups, but the first startup I'm going to talk about was actually a exclusive to Overnight Success, and it's a business called... I hope I'm pronouncing this right, but it's called PREVE. They landed a $550K pre-seed investment. The business is pre-seed and pre-product, and they managed to get over half a million dollars in funds which is good to see.

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Gemma Clancy (19:57): Wow.

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Will Richards (19:58): The investment was not led by anyone in particular, but included Archangel, Charlie Gearside, Yaniv Bernstein, another good podcaster in the startup space, and a few other notable angels. Really, what they're addressing is the re-injury rate of clients who go to the physio. So I think everyone probably listening has been to the physio at some point in their life. I've definitely been maybe more than the average.

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Gemma Clancy (20:22): Yep. I think I'm single-handedly supporting my local physio at the moment with all my injuries, so I'm very familiar with this space. Trigger warning. Anyone who's going through an injury right now.

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Will Richards (20:33): Well, when I stopped playing footy, I think my physio bill definitely dropped a fair bit. It's just the longest since running, so that's okay.

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Gemma Clancy (20:38): Yeah.

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Will Richards (20:40): But basically, when people go to the physio, they have an 80% dropout rate from their treatment plans. So you go to the physio, they say, "Oh, here's your acute injury. It's because maybe you've injured it playing sport or maybe you've got a weakness in a certain area that we can address. Here's basically a three to six to a longer plan to get that solved." What they've seen is 80% of people drop out of that plan at some point.

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Gemma Clancy (21:06): That does not surprise me at all. There's all these people, me, and it actually makes me feel better about the fact that I just do not do my physio exercises anywhere as much as I should.

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Will Richards (21:15): Yeah, yeah. I've got a thought on it that if they do solve this problem, it's actually could be detrimental to physios' business models in general because the clients will stop seeing them.

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Gemma Clancy (21:24): Watch out, physios. Yeah.

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Will Richards (21:24): Yeah, yeah.

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Gemma Clancy (21:27): Yeah. That's a cynical view probably, but yeah, I see what you mean.

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Will Richards (21:32): We'll see what happens. So 70% of people who go to the physio to treat an ailment basically re-injure it 70% of the time, and that's largely to the fact that most of them drop out. So, really, what this startup is doing is using gen AI, and a product, and those sorts of things. I'm using very broad terms because there's no product in market just yet, but what they're trying to do is, basically, increase the engagement between physiotherapists and patients so there's less dropout and hopefully less re-injury.

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Gemma Clancy (22:03): Yeah. Very interesting because, I mean, there's already players in this space. It's actually quite funny that this comes up. Back in the day, when I was pre being in the startup space or tech space at all, I was a receptionist at a physiotherapy business.

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Will Richards (22:17): What industry haven't you worked in?

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Gemma Clancy (22:18): I've worked in them all. I've worked in them all. My tentacle is in every industry. No. So, yes, I was a receptionist at this physio. I've dealt with chronic back pain issues for ages, so I've thought about physios and physio business models a lot. While I was working there, I was still a student, and I remember thinking, "God." The physios that were there, everyone was walking out of their appointments with a piece of paper and literally, stick figures drawn to show them how to do their exercises, and I was like, "This is insane. This is so archaic. How on earth is anyone going to be successful in their physio treatment if they're walking out with a piece of paper and very roughly scribbled exercises on them?" Then, I thought at the time, "Oh, there needs to be an app that helps people see what are their exercises, and tick them off, and tell their physio what they've done."

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(23:15): That app now does exist. I think it's pretty well-adopted across a lot of physios, and I use that at the moment. It's called PhysiApp, but it is still pretty basic as an app. There's nothing really game-changing about it. Sorry, if anyone is listening to this from PhysiApp, but now with the likes of these other companies, maybe pre-coming-in and thinking, "How can AI play a role here?" I'm really interested to see this actually dramatically improve this industry because I think it's been largely overlooked, I think, for technological innovation.

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Will Richards (23:48): I think it's really interesting as well to touch on how they actually raise the money in the market at the moment because they don't have a product. So I think in the... I have played in the angel investment space a little bit, and I think what's really interesting in this space is how they did it. It really falls down to who the founders are and basically, how they communicated what they were trying to do.

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 So Adam Beaupeurt is the marketing sales guy who's built and exited an agency previously. He's been in the startup space for a few years being an angel investor himself, mentoring around 20 startups. So I think he really gets the startup space and maybe the dos and don'ts of this world, but I think in that time, he's probably also built up a pretty substantial network of angels he's invested and worked with along the way which is an interesting tidbit.

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(24:38): Then, on the physio side, the expert in the space, there's a guy called Caelum Trott. He comes to the startup with 15 years experience as a physiotherapist, and he owns multiple clinics and manages around 20 physios. So he's definitely someone who's seen the whole spectrum of running a physio as a single person all the way up to managing a relatively large or a business that does exactly this. What they did to communicate the actual startup is they didn't actually have a pitch deck when they initially went out to raise the capital. What Adam did was he would join a call with angel investors, and he would basically just hand the reins over to Caelum to explain the problem with his expert experience. Then, he would basically just demo the product live on the call. I don't know exactly what he was demoing, but I think he was probably just talking through maybe his ideas or thoughts on how to solve this problem.

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Gemma Clancy (25:27): Yeah, the problem space. Yeah.

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Will Richards (25:30): Yeah, or potentially how he solves it right now with his clinics at the moment.

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Gemma Clancy (25:34): Yeah. I think founder-market fit is catnip to investors.

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Will Richards (25:39): Yeah, so important.

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Gemma Clancy (25:40): Yeah, so important, and then add on that that you've got somebody in your team who understands go-to-market strategy and understands marketing which a lot of founders don't. I know that, obviously, firsthand that it's a bit of an afterthought. If you combine those two things, strong go-to-market and strong product market, and found a fit, it's incredible combination. I'm not surprised that investors were keen to invest. Yeah.

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Will Richards (26:03): The third startup I want to touch on because I think it's an interesting callback to what we spoke about a little bit earlier about changes in the crowdfunding space, but also lots of venture funds raising money at the moment is a venture debt fund called Fundabl. They've been active in the market for a few years now, led by Ethan and Nathan, and they closed $3.2 million in equity for their... It's funny talking about these businesses, for their business, and then they're basically launching a new venture debt fund to invest in startups and lend money to startups for growth capital.

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Gemma Clancy (26:38): It's a lot of raising. They have to double raise. They have to raise for the business, and then they have to raise for the debt. It's pretty hard, pretty complicated stuff.

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Will Richards (26:45): Yeah, yeah. Yeah, and there's these interesting rules around like you can't have... The investor who puts a lot of money into your equity raise can only have certain amount of exposure to the fund as well. There's a few Interesting-

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Gemma Clancy (26:57): Yeah. The legalities around it are complicated. I know.

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Will Richards (27:01): Yeah, but it's really good to see these guys raising this money. So they basically compete directly with the likes of Tractor Ventures and other groups. Maybe there's one called Lighter Capital as well that exists in the Australian startup space as well. What Fundabl really focus on right now with this new fund is giving loans between $500K to $5 million. So they were a little bit... I might get this wrong because sometimes the comms change between what the product offering is of these venture debt groups. But basically, the way I think about it is Tractor is a little bit earlier, so they offer slightly smaller amounts of debt, and then Fundabl does larger amounts of debt for these businesses. So they've got some good customers and clients who use the platform, so there's the likes of... What's also really interesting, I find, is how broad of a client that uses this type of agreement.

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Gemma Clancy (28:00): Yeah, yeah. Totally.

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Will Richards (28:00): So they've got Lyka which is the dog food brand. They've got a group called Safewill which is playing in the legal tech space and-

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Gemma Clancy (28:08): Yeah, online will space. Yeah.

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Will Richards (28:09): Yeah, and Amber Electric which is playing in the electric cars recharging space. So I think anyone who can basically show that they've got subscription revenue can use this sort of tool, and it helps founders, basically, protect their equity over the long-term which I think is great to see.

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Gemma Clancy (28:26): Yeah. Very cool.

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Will Richards (28:31): Each episode, we're going to leave you in the same way we wrap up our weekly newsletter which is with a section we call KaaS which is, of course, Knowledge as a Service. So, Gem, what was your favorite startup-relevant read, listen, or watch this week?

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Gemma Clancy (28:43): I think it might be a slightly tenuous link to startup-relevant, but I think a lot of things can be considered startup-relevant because I think pretty much, if there's something out there, a piece of content out in the world that can spark an insight for where there's a need for technology to play a greater role, then I think I'm counting that as startup-relevant. So I just want to caveat that upfront.

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(29:03): So my KaaS this week is a little docuseries that's come from the ABC which is featuring the lovely Maggie Beer. This great South Australian food icon. She is focused on aged care and how we can revolutionize the aged care sector. Of course, she's really focused on food as a center of that. There's this docuseries called Maggie Beer's Big Mission. It's a three-part series where she's essentially goes into a aged care facility in Western Australia, and she looks at what they're doing. They do an upfront piece of research with the University of Tasmania, and they look at how is that aged care facility performing in terms of providing a good standard of living for the residents in there, and particularly hone in on food, and are the residents getting their nutritional requirements?

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(29:55): Long story short, they're not, and the food is pretty crap and not very appetizing, and Maggie is essentially saying like, "We need to change this." I just found it really... I mean, I found it quite emotional to watch, the docuseries. I think if you've had any kind of elderly relative in an aged care facility, you would know that aged care is not the nicest place. Most of us aren't really looking forward to going there, but I'm really hopeful that by the time I get there, that it's changed a lot. I think that food is a big part of it, but one little thing that came out of it for me as well was that we see resourcing is a huge issue in the aged care sector. When it comes to food preparation, we don't have a lot of great tech solutions for that right now.

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(30:38): You need people to be able to produce the food, but they highlighted the role of the head chef at this aged care facility who obviously has to lead his team of cooks. He's an expert himself as a chef in preparing the food, but he was also doing all this admin that I just wouldn't have even really thought about. He was bogged down in so much paperwork and admin around ordering, around managing multiple facilities, and making sure that they have all the food that they need. I was just like, "Surely, that is a space that needs even more help from a tech innovation standpoint." I know there's a lot of companies playing in this space, but that really stood out for me. No doubt there's somebody working on it, but yeah, I really hope that more and more aged care facilities and aged care providers are opening their eyes to the ways that tech can support such simple things like that. It's just really productivity-based tools.

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Will Richards (31:33): Yeah. It's going to be interesting to see. Imagine when we're retiring and hitting the old folks' home, we'll have an Abi robot each from Andromeda, and they'll be cooking dinner for us and-

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Gemma Clancy (31:43): Yeah. Hopefully. Yeah, yeah. Exactly.

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Will Richards (31:46): Listeners, I'm on holiday at the moment on a bit of leave, so I've been doing a bit of reading.

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Gemma Clancy (31:48): Oh, what have you been reading?

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Will Richards (31:50): One of the series of books actually is quite... It segues nicely with what you just said. It's called The Thursday Murder Club, and it's around-

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Gemma Clancy (31:58): I'm on edge of my seat to find out how you're segueing from aged care to murder mystery.

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Will Richards (32:03): Yeah, yeah. Basically, the whole premise of the book is it's a group of old residents at an old folks' home-

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Gemma Clancy (32:12): No way.

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Will Richards (32:13): ... who meet every Thursday, and they have links to the local police or

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 whatever, and they basically try and solve murders. It's a very, very easy read. It's a very funny read. It's written at... It's based up in the UK, so it's got a lot of UK-based references, but it's a very funny book, and it's been a super easy read to indulge in on the holiday.

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Gemma Clancy (32:35): That's hilarious. I can't get over the link between those two KaaS. We did not prepare that, whatsoever. I would not have peaked there being a connection between your holiday read and my love of an ABC docuseries.

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Will Richards (32:48): Well, I do have a serious KaaS which I am happy to chat about.

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Gemma Clancy (32:53): Okay. Go on. Go on.

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Will Richards (32:53): It's a piece of content, and it's then linking off the most recent piece of content podcast episode that they released, but I've been really enjoying a podcast lately called The Contrarians with Adam Schwab and Adir Shiffman. Actually, we use the... Adam is the... I think he's the founder of Luxury Escapes. Anyway, we did a bit of Luxury Escapes while we were in Lombok in Bali, so.

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Gemma Clancy (33:15): Yes. Yeah. Not a sponsored spot even though it sounds like it is.

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Will Richards (33:15): Not a sponsored spot, but that was it. Yeah.

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Gemma Clancy (33:19): Although if Luxury Escapes would like to sponsor the podcast and send Will and I on another holiday sometime soon, we would really love that. So, Adam, if you're listening.

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Will Richards (33:28): Anyway, in their most... I'll get to the point. In their most recent episode, they had the CEO of Flippa on the podcast, and his name is Blake Hutchison. Flippa, if anyone doesn't know, they're a marketplace that's global that helps people buy and sell online businesses. It's anything from Shopify accounts to newsletters to blogs that get ad revenue from AdSense and basically, everything in between. They're based out of Cremorne in Victoria is their main office, I believe.

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(34:00): Anyway, they've just released a report on a data insights report which has some quite interesting tidbits in it around what are the trading multiples of these digital assets and also, the time to sell these sorts of digital assets. So anyone who's, I think, interested in investing, or maybe going on the founder journey themselves, or they've built something, and there are startups that may never get to IPO, a report like this is quite interesting to just understand what the mechanics are of these markets, how long it takes them to sell, what the multiple of a Shopify account is, for example. Do you have any idea what the multiple or how you value a YouTube account, Gem?

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Gemma Clancy (34:38): No. I assume there's a revenue multiple there or maybe... Yeah, but it's a tricky one because there's so much potential for those platforms to add value to other businesses.

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Will Richards (34:49): Exactly. Yeah.

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Gemma Clancy (34:49): I think there's a lot of intangible value that sits in those business outside of the revenue that they produce each month. Yeah.

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Will Richards (34:56): Yeah. Exactly. Well, it's funny because I think there might be a buyer who would look at something and be like, "That's really cheap for me," because it's this big value unlocked, but the actual fundamental valuation of a YouTube channel, for example, is... Then, it's just an asset they've brought onto their platform to start buying and selling, and it's about a dollar a subscriber, so.

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Gemma Clancy (35:11): A dollar a subscriber. Wow.

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Will Richards (35:15): I'm sure there's a few people potentially sitting on YouTube accounts that have a few thousand subscribers. It could be something interesting to log on one of these marketplaces and maybe getting a return on it.

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Gemma Clancy (35:24): Yeah. Super interesting.

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Will Richards (35:26): I wonder how they value newsletters and podcasts. The funny thing is around the YouTube thing though is it's like it's faceless YouTube videos. So he talked about an example in the podcast around a YouTube channel they've recently sold, and it was a coaching website that basically helped people ironically start YouTube accounts, get started, and grow these things.

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Gemma Clancy (35:44): So meta.

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Will Richards (35:45): Yeah. Exactly. It had a million subscribers, and basically, it was a faceless video, screen-sharing, and someone talking over how to start a YouTube channel, and how to grow a YouTube channel, and those sorts of things. So I think if you're a creator who's maybe doing what we're doing right now, we're a face, we're talking to a piece of content, or we're talking about certain things, there's a wee way of looking at it where we're the product, where there's some assets that can be very easily transferred to other businesses, and that's really probably where the value is for certain things.

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Gemma Clancy (36:13): Oh, yeah. Yeah. Well, certainly, I think marketing in general is becoming more and more creator-led, and I think it comes down to people searching for authenticity and also, people looking at content creators as being incredible powerhouses of producing huge volumes of content that people actually also want to engage with. You've got the likes of like Mr. Beast out there who's been able to produce an incredible financial return for himself through directly working with brands and sponsors because those brands/sponsors see his channel as so much more powerful than most forms of traditional advertising. So, yeah, it's amazing space.

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Will Richards (36:52): It's very tangential, but I was reading around the Mighty Craft administration.

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Gemma Clancy (36:56): What's that?

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Will Richards (36:57): Mighty Craft, the brewery group, has gone into administration this week, and they-

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Gemma Clancy (37:01): Oh, okay. Oh, I didn't see that.

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Will Richards (37:02): They are a part-owner in Better Beer which is the beer.

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Gemma Clancy (37:05): Ah, yes. I did see something about Better Beer. Yep.

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Will Richards (37:08): Yeah.

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Gemma Clancy (37:10): Yeah.

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Will Richards (37:10): The report, and it was all... It's not public information, so it was all conjectured, really, but they were saying the AFR was reporting that The Inspired Unemployed guys own... I think it was 36% of the Better Beer business, and then Better Beer was valued because obviously, now, Mighty Craft is going into administration. It's probably one of their best assets that they'll, I'm sure, they'll sell to someone, but Better Beer were... Sorry. Better Beer was valued at $80 million. You look at The Inspired Unemployed Instagram account, and TikTok, and stuff, and they go viral, and they have a bit of fun. Yeah, they're really interesting guys doing some fun stuff, but they're making some serious money on the beer business,

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Gemma Clancy (37:50): Serious money. Yeah, and I don't think they have a huge number of investors all invested in Inspired Unemployed who are diluting their share of that pie. Yeah. Create a business. Yeah. It's incredible.

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Will Richards (38:04): So if anyone wants me to do a bit of a deep dive on Better Beer and Inspired Unemployed, it's something I actually would be interested in learning a bit more about.

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Gemma Clancy (38:12): Yeah. Do it. I want to read that. That sounds interesting.

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(38:20): Thanks for joining us for this episode of The Startup Retro. We would love to hear what you thought of the show, so feel free to reach out to us directly on LinkedIn, or even better, you can follow us on your favorite podcast player and leave us a review so that more people can find us. If you enjoy the podcast, you'll probably also really enjoy our weekly newsletter, Overnight Success, which goes into even more detail on the news headlines, and startup raises, and much, much more. You can subscribe to the newsletter at overnightsuccess.vc. Catch you next week.

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Will Richards (38:46): Catch you next week.

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