Private startup funding falls 41% in WA: Techboard

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// While private funding of startups (so, anything outside the ASX) grew strongly across the country last financial year, it fell 41% in WA on a per capita basis…

We’ve all known for many years what a struggle it is to raise funds for startups over here in WA.

Yes, there have been some impressive deals concluded recently – PictureWealth’s $12M raise and WeMoney’s $2M among them – but the overall picture is still pretty bleak for local tech companies wanting to finance their rocket ship, and only getting worse, according to the latest funding data report.

Local fund watcher Techboard, ably helmed by startup stalwarts Peter van Bruchem and Raf Kimberley-Bowen, has been charting funding events for early stage tech companies for many years now.

Their latest report captured almost 900 capital raises for more than 700 companies countrywide during the financial year 2019/20.

The main highlights were:

  • total tech/startup funding $7B
  • this was about the same as FY19, but double that of FY18
  • NSW was the standout, with $492 invested as a per capita comparison
  • Victoria was $356, SA $124, ACT $60 and Qld $56 (per capita)
  • WA had $85 invested per capita, a fall of 41%,
  • WA’s investment was about a sixth of NSW (per capita)
  • Across the country, the average private funding was $121/capita
  • Angel investment grew to $14M

Worryingly, the number of sub $5M deals fell during the 3rd quarter, and deals under $1M fell during the final quarter. This is in the range of the typical tech startup.

Blackbird was by far the most active VC in terms of dollars, making 14 investments worth $490M. The most active VC in terms of deals was Artesian with 44 investments worth a collective $36M.

“Our data shows that while overall funding levels remain healthy and growing, the deal size under greatest stress is sub $1m investments that tend to be less serviced by the VC funds,” said Peter van Bruchem, co-founder and CEO of Techboard.

Peter van Bruchem

“I am therefore a little concerned about early stage startups getting funding in the current environment. There are a number of initiatives to help address this but in any event we will be continuing to monitor funding and will see and report on when and if the level of small deals recovers.”

WA Private Deals

The past three year’s private funding deals into WA companies is shown below:

$M17/1818/1919/20Total
$20m-<$50m2020
$10m-<$20m101222
$5m-<$10m13518
$1m-<$5m16.28.57.432.1
up to $1m4.95.61.311.7
Grand Total44.134.125.7103.8
Source: Techboard

The decline in private funding for WA tech and early stage startups is clear. While $44M was invested in FY18, this has fallen to $26M in the most recent year, a decline of 41%.

And you can’t blame COVID. WA has emerged better off than most with regards to the pandemic, and yet the rest of the country’s early stage funding has been robust. In NSW, private funding actually more than doubled last year.

Hats off to those who have invested in WA startups and early stage businesses.

But the question has to be asked: when are WA investors going to collectively turn their attention to the deals right here under their noses? What will it take?

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The full FY20 report is available at:  https://techboard.com.au

Main photo: Puppy, looking suitably unimpressed by the latest WA startups funding stats; photo by Torsten Dettlaff from Pexels