More fintech capital raises unannounced than announced in 2023

More fintech capital raises unannounced than announced in 2023

Photo: Andrea Piacquadio, via Pexels.

Data compiled by Techboard from Australian Securities and Investments Commission (ASIC) filings has revealed that more fintech capital raises were kept on the down-low than announced last year, and not by a small margin either.

In its recently published Australian Startup Funding in Review report, the Perth-based data company divulged that the number of unannounced fintech startup deals was more than 60 per cent greater than those in the public domain, at 134 versus 83.

Techboard reports the unannounced deals ranged in size from below $100,000 through to $50 million-plus. These were discovered as part of a pilot study into this behind-closed-doors dealmaking that on a broader scale may be impacting the accuracy of startup funding reporting to a greater extent than was previously understood.

The company's report highlighted more startup deals in total than the State of Australian Startup Funding Report 2023 from Cut Through Venture and Folklore Ventures, at 621 raises versus the other's reported 413 deals.

Techboard co-founder and CEO Peter van Bruchem tells Business News Australia the differential can be partly explained by his dataset's inclusion of crowdfunding at around 70 deals, while another factor is directly reported information about angel deals as part of the company's Australian Angel Awards held over the past six years.

Van Bruchem also clarifies there would likely be cases where Techboard and Cut Through Venture view capital raises differently, which may have a significant impact on totals depending on the size of investments in question.

Interestingly, the report found a less drastic, albeit still significant, drop in the value of capital raised by startups in 2023, decreasing 37 per cent to $4.438 billion. This compares to a 52.7 per cent decrease in the Cut Through Venture report to $3.5 billion.

Whilst information released publicly by Techboard is not as comprehensive as the other startup funding report, it is observable that certain deals in particular were included in its data that were omitted by Cut Through Venture.

Several of the instances that could be identified from the 2023 mega-deals mentioned by Techboard happen to have been publicly reported at the end of 2022 or early 2023, and include hydrogen fuel cell vehicle company H2X Global, carbon infrastructure group Xpansiv, and loans technology outfit Tic:toc.

However, software company Tally Group - included by Techboard but not highlighted by Cut Through Venture - received its investment in September.

The report authors note climate-tech was the most funded sector last year with $777 million in announced investments, closely followed by fintech with $758 million, and healthtech coming in at $574 million.

Techboard also reports solely women-founded ventures had their strongest year since 2020, capturing 3.88 per cent of all private announced capital raised during the year from 12.58 per cent of deals.

The annual report also came with a summary of the first quarter of 2024, with $761 million captured from 82 deals announced. This compares to $703 million from 66 deals as reported by Cut Through Venture last month.

"This level is closely comparable to what was seen in the March quarter of 2020, in terms of dollar value captured but from 27 per cent fewer deals," the report authors state.

"The quarter was the slowest since the September quarter 2020 ($401 million) but larger than every quarter pre-June quarter 2019. In terms of number of deals, the March quarter 2024 had the lowest quarterly number of deals captured by Techboard (going back to 2017)."

Techboard also notes the dominance of NSW on a dollar basis dropped in the March quarter from two-thirds in 2023 down to closer to 50 per cent. Meanwhile, Victoria has been closing the gap, rising from 18 per cent to 30 per cent of the funds raised.

The authors also report that March 2024 was the best quarterly result for solely women-founded ventures for the last six years at 16.36 per cent of all capital raised, but behind the result of the September quarter of 2017 when they were at 25.68 per cent. 

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