Category Archives: AMALGAMATIONS TAKEOVERS

ANOTHER AUSSIE UNICORN: Design newbie Canva now valued at above $US1 billion in its latest capital raising

 

Melanie Perkins, co-founder of Canva. Photo: Supplied.

Online design and publishing platform Canva has become the first Australian start-up since Atlassian to join the elite ranks of Silicon Valley unicorns with a valuation in excess of $US1 billion ($1.28 billion).

The valuation is based on a $US40 million series A funding round. It is the sixth funding round since the company was founded 4½ years ago by Melanie Perkins, Cliff Obrecht and Cameron Adams.

The latest funding won the support of one of Silicon Valley’s top five venture capitalists, Sequoia Capital, which was an early investor in Apple, Google, WhatsApp, Cisco, Oracle, Yahoo and LinkedIn.

Canva chief executive Ms Perkins said the money raised from existing and new shareholders would be used to expand the company’s range of online design and publishing products.

“We are in 190 countries, in 100 languages and we have done about 1 per cent of what is possible,” she told The Australian Financial Review in an interview at the company’s Sydney head office in inner-city Surry Hills.

“I know we have a $US1 billion valuation but we like to say we are a baby unicorn,” Ms Perkins said. “There is a lot more to do before we are grown up.”

When asked about her ambition for Canva, Ms Perkins did not hesitate before saying: “I think we can make Canva the most valuable tech company in the world.”

To achieve that ambition Canva will have to expand its market value about 900 times to beat the $US890 billion valuation of Apple, the world’s largest company.

That goal sounds outrageous considering Canva lost $3.3 million in the year to June 2017.

But Rick Baker, a partner of Canva shareholder Blackbird Ventures, said Canva is possibly one of the fastest-growing software companies of all time measured in terms of percentage growth in recurring revenue.

The company earns revenue from a subscription model.

“Canva is making huge strides in democratising design for everyone,” he said. “Its product growth and adoption across many demographics is truly exceptional.”

Mr Baker first met Ms Perkins and Mr Obrecht in 2010 before they had launched Canva.

“I convinced them to delay their first seed funding round until after Blackbird Ventures was established,” he said.

“Our first investment as a venture capital firm was the $250,000 we invested in Canva.”

Breaking silos

Lots of smart money has supported the Canva business, including Australian entrepreneurs Paul Bassat from SEEK and Daniel Petre from AirTree Ventures.

The company has attracted heaps of attention in Silicon Valley USA.

Early investors were Google Maps founder Lars Rasmussen, legendary venture capitalist Bill Tai, former Yahoo CFO Ken Goldman and Hollywood actors Owen Wilson and Woody Harrelson.

A number of Silicon Valley venture capital firms apart from Sequoia have backed Canva including Felicis Ventures, Vayner Capital, Matrix Partners and Shasta Ventures.

Ms Perkins admitted that Canva’s two major competitors were design software companies Adobe and Microsoft.

But she said Canva was built on breaking down the silos and complexity that are part and parcel of using the products sold by Adobe and Microsoft.

“The world is rapidly becoming more visual, yet traditional design tools in the market are too complicated to use, or so costly that they become inaccessible,” Ms Perkins said.

“Canva is designed to enable individual and teams to collaborate seamlessly, and our growing footprint is evidence of the widespread need that we are addressing.

“This extra financing will bring us that much closer to giving everyone the ability to thrive in an increasingly visual environment.”

Canva’s growth rates in terms of customer usage of its platform have been staggering.

After eight months of existence about 350,000 designs were being created each month. After 20 months of existence about 3 million designs were created each month.

Today, after 52 months in operation, Canva’s platform is handling about 34 million designs a month.

The idea for Canva had its roots in the lounge room of Ms Perkins’s family home in the northern Perth suburb of Duncraig. She and Mr Obrecht started a printing company called Fusion Books, which printed school yearbooks.

Cameron Adams, a former Google engineer, joined the company as a co-founder before its first round of seed funding in 2013.

Since then the company has raised $US81 million.

Atlassian became a unicorn well before it listed on the NASDAQ stock exchange with a valuation of $US6 billion in 2015. Its market valuation is now $US11.9 billion.

This post appeared at the AFR.com. See the original here.

ooo

Henry Sapiecha

Ever heard of the Australian Rae family? They just reaped in over $300m

It is one of the richest families in the country, and now the low-profile Rae family of Perth has pocketed more than $300 million from the sale of its New Zealand fuel retailing business to Caltex Australia.

In 2010, the family sold its Gull petrol retailing operations in Western Australia for an estimated $500 million

gull-founder-fred-rae-with-then-new-zealand-prime-minister-helen-clark-in-2007-image-www-money-au-com

Now it has offloaded its Kiwi interests, Gull New Zealand, for $NZ340 million ($324 million) to Caltex Australia.

A few years after the sale of the WA operations in 2010, the Rae family’s fortune was estimated by The West Australian newspaper at $392 million, which has been pumped up significantly with Thursday’s sale.

The family moved into petrol retailing in the 1970s after Gull’s founder, Fred Rae, had spent time working in both the house building game as well as building grain silos.

It built its stake in the fiercely competitive fuel industry by sticking to a low-cost strategy, which in New Zealand has seen it rolling out unmanned petrol stations, helping it carve out a handy 5% share of the market from the majors.

the-rae-family-has-offloaded-its-kiwi-interests-gull-new-zealand-for-nz340-million-324-million-to-caltex-australia-photo-gull-image-www-money-au-com

Gull New Zealand is an independent fuel importer and distributor, which brings with it a fuel import terminal at Mount Maunganui, on the north island, and the company’s petrol stations and retail outlets.

Caltex has established a large fuel import centre at the recently closed Kurnell refinery site in Sydney, while also establishing a buying and trading arm in Singapore to supply its Australian operations.

The New Zealand acquisition “optimises Caltex’s infrastructure position, builds trading and shipping capability, grows the supply base and enhances Caltex’s retail fuel offering through low-risk entry into a new market”, the company said in a statement on Thursday.

It was acquiring the company on a multiple of 8.2 times the forecast earnings before interest, depreciation and amortisation for 2017, it said, which will decline to around 7.5 times taking annualised synergies into account. The acquisition is expected to increase earnings per share from the first full year of ownership.

Gull operates 77 retail sites in total, of which it controls 55 sites. Around a third of those are unmanned. It also operates a further 22 supply sites. The company sells about 300 million litres of transport fuel annually.

The Mount Maunganui terminal is the largest facility of its type in New Zealand, with total storage of about 90 million litres. Its retail network is concentrated in the northern half of the north island of New Zealand, and “is well placed to profitably grow via new to industry and/or new supply site expansions”, Caltex said.

Caltex would retain Gull’s brand, management and employees, it said.

Gull has a reputation for being a low-priced market competitor by operating a large number of unmanned outlets with payment by Eftpos or credit card, with no retail outlet. Its outlets are concentrated near its import terminal, with negotiations in the past with rival importers to acquire competitively priced wholesale product blocked when it has sought to expand onto New Zealand’s south island.

The bulk of the country’s population is located on the north island, with Christchurch the largest city on the south island.

The purchase by Caltex follows a period of upheaval in the New Zealand market following the exodus of US group Chevron, which operated the Caltex brand in New Zealand. This was bought for $NZ785 million ($750 million) by Z Energy, which now has close to 50 per cent of the local market.

Ratings agency Standard and Poors said the purchase “will enhance Caltex’s regional supply base, adding scale to its trading and shipping activities”.

“We view New Zealand as being a low risk market for expansion of retail fuel assets,” it said.

 

Atlassian: the Australian millionaire factory. Story in videos & pics.

ooo

OOO

Atlassian surges in debut

Shares of Australian business software maker Atlassian soar in their Nasdaq debut.

They’re known as the “Royals” and “the chosen ones” — the select few invited to be in New York on Thursday morning to ring the bells celebrating the opening of the stock exchange and Australian tech darling Atlassian’s massive IPO.

About 40 Atlassian employees — many of whom were hand-picked by co-founders Mike Cannon-Brookes and Scott Farquhar in the company’s early years — celebrated overnight as they became multi-millionaires and Atlassian became a company with a market cap of $US5.74 billion ($7.9 billion).

Atlassian, a leading provider of collaboration software for teams with products, opened for trading on The Nasdaq Stock Market image www.money-au.com

Atlassian, a leading provider of collaboration software for teams with products, opened for trading on The Nasdaq Stock Market on December 10, 2015. Photo: Christopher Galluzzo

By the end of Thursday’s trading in the US, however, more than just those 40 became millionaires. Former Atlassian employees say more than 100 staff are now either millionaires or multi-millionaires.

It’s also understood the shares of a number of staff who joined in recent years are now worth six figures.

“There are going to be a hundred people who are going to be millionaires today — at least on paper,” a former Atlassian employee, who didn’t wish to be named, told Fairfax Media.

Atlassian co-founders Scott Farquhar (right) and Mike Cannon-Brookes image www.money-au.com

Atlassian co-founders Scott Farquhar (right) and Mike Cannon-Brookes. Photo: Trevor Collens

They added that the Royals had been “going out on lavish dinners and celebrations” while in New York in recent days and were already discussing how they should splurge their cash, and whether it should be on luxury cars.

Many are also considering investing their money in Australian start-ups, or starting their own.

“Mike and Scott’s legacy will be beyond Atlassian,” the former Atlassian employee said. “They want to make billionaires in Australia that are going to invest in Australian companies — the next wave of start-ups

Those likely to make the most from the IPO are those who joined between 2002, when the company started, and 2008. That’s when Atlassian offered employees the chance to buy shares at a much lower price than $US27, the price shares were trading for on Thursday as the market closed. For employees who were offered — and purchased — shares at 50 cents several years ago, their stake is now 5300 per cent more valuable.

While some employees chose to hedge their bets and sell some of their shares last year for $US16 to T. Rowe Price and Dragoneer Investment Capital in a financing round, many are understood to have held on to most of them.

When Atlassian received that financing, which valued the company at $US3.3 billion, Mr Cannon-Brookes declined to specify how many millionaires his company had made at the time, but said it was “not double digit”.

“That number [of millionaires] blew both Scott and I away,” Mr Cannon-Brookes said at the time to The Australian.

“That was probably the biggest achievement to come out of this [new investment] and [something] we hadn’t thought about.”

There’s never been a more exciting time to be an Australian — as Prime Minister Malcolm Turnbull would say — or, in this case, to be an Atlassian employee.

e3

Henry Sapiecha

‘The richest database I’ve seen’: why AussieCommerce bought Jeremy Reid’s PinchME

pinchme Jeremy Reid image www.money-au.com

Jeremy Reid has managed to attract stellar investment despite still serving an ASIC ban. Photo: Louie Douvis

Its revenues might be negligible in the context of a group tracking toward $200 million revenue this financial year, but AussieCommerce co-founder Adam Schwab thinks the Australian arm of product sample distributor PinchME can turn his e-merchant into “a media company”.

AussieCommerce began negotiations before Christmas with PinchME’s now New York-based founder, Jeremy Reid, who despite still serving a two-year ASIC ban on providing financial services following the collapse of his hedge fund-of-funds Everest Babcock & Brown, managed to attract stellar backer for his sampling start-up: Kerry Stokes, the Liberman and Smorgon families, Toll Holdings founder Paul Little, SEEK co-founder Andrew Bassat and advertising heavyweight David Droga.

That group will continue to part-own PinchME’s US business, which now employs 25 people in New York and according to president Adam Caplan, has completed 200 campaigns and shipped four million samples for brands including Johnson & Johnson, P&G, Unilever, L’Oreal, Revlon, Coty, Pfizer, Kimberly-Clark, Kraft, and Kellogg’s.

The eight employees of PinchME Australia are already installed at AussieCommerce’s offices at Wynyard in Sydney, and its 500,000-strong database of subscribers are a source of wonder to Schwab.

“The fact that you’re giving these people free samples means they’re incredibly engaged,” Schwab says.

“The open rates on PinchME emails are twice or three times what you get at a typical e-commerce business, and the information they’ve gathered on subscribers is the richest I’ve seen.”

Its multinational clients pay PinchME to provide narrowly targeted sampling campaigns, and the fact that each sample is accompanied by six questions – which the subscriber must complete if they want another freebie – means the ability to segment its database is always improving, Schwab says.

“The more targeted the offer, the more powerful. PinchMe is going to be a great complement to [group buying platform] Spreets that we bought last year,” Schwab says.

Of particular interest to Schwab is the full-fledged marketing campaigns which PinchME can produce alongside the sample deliveries.

“This acquisition turns us into a media company,” he says, pointing out that revenues from AussieCommerce’s original flash sale and ‘daily deal’ activity is now “a single digit percentage” in terms of the overall group.

Terms of the deal were undisclosed. PinchME Australia’s revenues are not known however it’s understood to have not yet turned a profit since its 2013 launch.

ooo

Henry Sapiecha