New data from KPMG and Techboard suggest Australian start-ups fared better than their global counterparts in 2022, but no one is expecting a market bounce back in 2023.
Despite more than $4.7 billion in new funds raised or underway by VCs in 2022, giving the local start-up investors a record amount of dry powder to deploy according to Techboard, co-founder of AirTree Ventures Daniel Petre, said he did not expect to see many mega deals in 2023., said the downturn created opportunities for VC funds to get equity in start-ups on cheaper terms than back in 2021.
Daniel Petre co-founded AirTree Ventures and says there will be more company collapses ahead in 2023.This assertion highlights a major change in sentiment from the end of 2021, and the first quarter of 2022, when foundersWith companies that last raised external funding during the halcyon days of 2021 starting to run out of cash, Mr Petre predicted that plenty would go bust, or get sold for a heavy discount.
“We’re yet to see how deep or dark we go, but the way we think about this is it clears the air – it gets rid of the noise of the last two years. A lot of people had been raising funds for short-term opportunities ... but now, the only reason to start a company in this climate is if you’re truly passionate about the business you’re starting.”
“Start-ups will likely also place more emphasis on rightsizing their business, so they can conserve cash and better position themselves for a new funding round.
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