A Techboard report into unannounced funding in the Australian fintech sector has found non-listed fintech companies raised $1.45 billion in 2023.
A Techboard report into unannounced funding in the Australian fintech sector has found non-listed fintech companies raised $1.45 billion in 2023.
The Fintech Funding Project Report 2023 used non-confidential company data obtained via the Australian Securities and Investments Commission to supplement previously flagged deals.
It excluded shares issued to staff and conversion events on convertible or SAFE notes.
It found 143 unlisted companies with unannounced deals with a collective value of $683 million, on top of the announced raises worth $769 million, bringing total fintech raises for the year to $1.45 billion.
The unannounced investments range in size from $50,000 to $50 million, with 46 of the deals being between $1 million and $5 million.
Of the unannounced deals found, 12 were for WA fintech companies totalling $26.45 million.
That was in stark contrast to the announced WA fintech deals – of which there were just five, totalling $1.7 million.
New South Wales had the highest number of unannounced deals, 72, totalling $367 million.
The report also found some 21.5 per cent of investment capital came from foreign investors.
Airtree backed Grow Inc raised a previously unannounced $77 million over the course of 2023, according to the report, while Etika issued $53 million of capital to Australian operations following an unannounced UK capital raise.
The report also said FutureSuper appeared to raise $55 million in H2 2023.
“While there has been no announcement of this raise, it was reported in August 2023 that the company had completed a raise at a $225 million valuation but had not announced the size of that raise,” the report said.
“To support the validity of Techboard’s approach to valuations, we had calculated the valuation for that raise at $210 million, in the ballpark of the announced valuation.”
LaunchVic chief executive Dr Kate Cornick, who wrote the foreword for the report, said it would help all fintech stakeholders gain a deeper understanding of the sector.
“One area where LaunchVic has struggled to collect data is reporting of capital raises,” she said.
“Many startups receive funding from investors but for some companies, including those that raise from non-institutional investors, there may not be a compelling reason to announce or report capital raising results.
“As a result, we have long suspected there is an underreporting of capital raising activities and know this has been an issue for seed rounds in particular.”
Techboard co-founder and chief executive Peter van Bruchem said the report was borne out of frustration over the inaccurate information available on funding rounds.
“In the report we breakdown who owns and has invested in Australia's fintechs,” he said.
“We do breakdowns by investor entity type, classification and location.
“For the first time we are able to reveal the extent of direct foreign investment into Australian fintech, the significance of non-institutional investors and the extent to which venture capital is funding one of Australia's most significant startup industry verticals.”
Fintech Australia chief executive Rehan D’Almeida said the Techboard data would help to push for stronger mechanisms and initiatives to assist in capital raises.
“It’s heartening to see that fintech is represented as one of the most deal-active categories even while the rest of the startup industry endures one of its harshest slowdowns in funding to date. Fintech is not completely immune,” he said
“We know it’s been tough for many of our members out there too. But at a macro level, the industry continues to both deliver for investors and consumers”
