Monthly Newsletter – June 2021

Alex Dam

In this month’s newsletter, we will be providing you with an update on some of our portfolio companies, relevant VC/Startup news such as trends, notable exits and funding, as well as some helpful resources that we think might be useful.


Portfolio Companies

Yabble

It has been a period of great momentum and growth at Yabble, our first portfolio company. The team kicked off Q2 2021, with the launch of their new brand:

Taking the cue from their new brand, Yabble is about to roll out their new artificial intelligence (A.I) customer insights product, “Hey Yabble”, from their closed beta. If you would like to know a little more about the product that is taking the research world by storm, please watch the video below to see “Hey Yabble” in action:


Are revolutionizing the way tilers are working with their customers. Kwotimation allows tilers to create their own website, drive traffic and seamlessly send accurately priced quotes to customers without having to physically be there to quote jobs.

Josh, Jarome, Sophia and the rest of the Kwotimation team are going full steam ahead with their go-to-market strategy and have partnered up with Tile Depot, New Zealand’s largest tiling supplier. If you know any tiler’s please steer them to Kwotimation’s website where they can signup for a free trial and get one of their awesome, limited hoodies!

They recently released a new content piece from a tilers perspective. See below.


Partly are on a mission to provide accurate vehicle parts data and fitment data to distributors, dealerships, manufacturers, software platforms and marketplaces.

They recently posted a blog about their auto parts API and the future of the automotive industry. See below.


Compostic is one of our Scout portfolio companies that we have invested in. They are the world’s first 100% compostable cling wrap that breaks down in a matter of weeks, rather than clogging up our oceans. Our managing partner, Rob Vickery recently caught up with Compostic founder and CEO, Jon Reed, for an informal chat about Compostic’s vision and trajectory.


Portfolio Job Openings

Yabble is on the hunt for:

Partly is on the hunt for:


As always, if you are a founder, we would love to hear from you and your startup. Reach out to us at pitches@hillfarrance.com


Events

Hillfarrance Startup Capital Roadshow

We recently concluded our Auckland roadshow where we thoroughly enjoyed the company which included university students, industry professionals and aspiring entrepreneurs. We even had a couple of pitches that night!


Hillfarrance Startup Master Class

We will be hosting a series of Master Classes at the University of Auckland. These workshops will emphasise the startup journey for founders and will include guest speakers with a range of entrepreneurial experiences in the NZ scene, as well as the global scene. Currently, we will be hosting a total of four sessions.

You can sign-up for these free sessions down below.


Hillfarrance Office Hours

We have had a huge interest in this series, which is hosted by our venture partner, Alex Veiga. Whether you already have paying customers or just an idea, we would love to meet with you and speak in an open, welcoming environment with like-minded individuals. Our next office hours are tentatively scheduled for Friday 9th July. If you are interested, please sign-up below:


The Harvest Convention

This will be Hillfarrance’s 2021 annual convention where we will shepherd both startups and enterprises together for two monumental days.

More details to come soon…


Media

Recently, we were featured in an article about our diversity pledge. This pledge means that we are actively trying to include and increase underrepresented investors (such as Maori and Pasifika, LGBTQIA+, Black, LatinX and more) alongside us on the cap table of our investments.

We are extremely proud to become the first VC firm in Aotearoa, NZ to commit this pledge into our term sheets.


Resources

Hillfarrance articles

We are avid writers of startup-related content and regularly add new posts to the “Latest” section of our website. From convertible note templates to notes on how to build an AI-first startup, you can find it all below:


Podcasts of the month

The Full Ratchet

Is an excellent podcast that demystifies Venture Capital with many Venture capitalists as featured guests. Host, Nick Moran, is the founder and General Partner at New Stack Ventures. In each episode, Nick interviews investing experts on everything from “What is an Angel Investor”, to “What ratios and monthly recurring revenue levels are required for a Series A SaaS round?”.

Invest Like the Best” with Patrick O’Shaughnessy

Patrick O’Shaughnessy is the Chief Executive Officer at O’Shaughnessy Asset Management (OSAM). He is also the author of “Millennial Money: How young investors can build a fortune”. His podcast is a series of conversations with leading investors across multiple asset classes.


Books of the month

“The AI-First Company” – Ash Fontana

Is an in-depth read about Artificial Intelligence and how it is a priority (even necessity) in today’s current macro-economic environment. The book delves into why AI-First companies are the most successful companies today, and how they leverage AI to outpace their competitors. As investors, we also look for these AI-First startups so this may be a very good read for you.

“Super Founders: What Data Reveals About Billion-Dollar Startups” – Ali Tamaseb

Ali Tamaseb has spent thousands of hours manually amassing what may be the largest dataset ever collected on startups, comparing billion-dollar startups with those that failed to become one—30,000 data points on nearly every factor: number of competitors, market size, the founder’s age, his or her university’s ranking, quality of investors, fundraising time, and many, many more. And what he found looked far different than expected. Just to mention a few:

  • Most unicorn founders had no industry experience;
  • There’s no disadvantage to being a solo founder or to being a non-technical CEO;
  • Less than 15% went through any kind of accelerator program;
  • Over half had strong competitors when starting–being first to market with an idea does not actually matter.

Startup/VC News & Trends

Global venture capital funding reaches an all-time high of $125 billion in the first quarter of 2021

With these statistics from Crunchbase, it is also interesting to see the correlation between more $dollars being invested and the number of “Unicorns” that have arisen.


AI is changing the nature of analytics

This article dives into why and how AI is changing the nature of analytics and describes that the key element that AI provides is context to analytics. Additionally, AI excels at predictive analysis and its ability to predict future trends. We suggest all founders think about AI and big data as a necessity when curating their business model.


An increasing number of unicorns popping up across the world

Unicorn is a term garnered for another privately held company startup with a valuation of over $1 billion.  CB Insight’s found that there are now more than 700 unicorns globally. 23 of these being in the European region. You can find the full news and names of the unicorns here. More importantly, I think we now need to choose a slightly less mythical creature to name these events after!


UK’s increasing investment into Green Tech

The UK is planning to invest roughly $250 million USD into all types of Green Technologies following an increasing number of VC’s already investing in it.


How a $2.4 billion-dollar company is still pivoting

Magic Leap is an augmented reality startup that had received funding from large industry players such as Google but ended up in a downward trajectory when sales for consumer hardware slowed. However, they are making a pivot towards enterprise mixed reality solutions which may breathe a new life for them.


Covid-19 hindering the collection of data?

This interesting read from the economist that delves into the need for more accurate census and population data due to covid-19. The pandemic has put a pause on the collection of valuable data that could ultimately spur innovation.


Anatomy of a seed round during Covid-19

Here’s an interesting read about what it’s like to seek seed-funding during the height of the covid-19 pandemic.


The best time of year to raise money for your startup

An old, gold and still relevant read. Founders should also weigh in on the consideration of seasonality when fundraising. This article explains three considerations that founders should think about when fundraising:

  1. Seasonality – Summer is when funding is the slowest.
  2. VC’s invest more and more as the year progresses – the later in the year, the greater the time pressure for them.
  3. The difference between the busiest fundraising month (December) compared with the least busy month is 50% (difference in the number of investments).

The inflation of startup valuations

This article is an interesting read about the inflationary forces that affect startups. Specifically, in cloud software and infrastructure startups, the supply and demand of side of startups are everchanging. Post-money valuations for Series A have grown 11% annually, while respective seed rounds grew 15%. Why is this and what attributes to these inflated valuations?


Psycheldelic startups?

Psychedelics could potentially be used to treat mental heal disorders such as PTSD, depression and anxiety. Investors are getting increasingly interested in this space as a third psychedelic company has recently done public.


San Francisco is not the capital of tech anymore?

With the emergence of the covid-19 pandemic, we are starting to rethink the way we work and where we work. This article dives into the evolution of the “capital of tech” and why it is not silicon valley anymore, but rather the internet.


Digital startup boom

Company X co-founders, David Hallet and Jeremy Hughes explain the digital startup boom within NZ’s startup ecosystem. This boom is driven by cloud services making it easier for people to create startups and scale projects much faster than ever before. You can read the full article here.


Main causes of startup failure

CB Insights raise that the top 3 reasons that a startup fails are:

  • No market need;
  • Lack of funding; and
  • A weak founding team.

Our suggestions to these top 3 failure points are as follows:

  • Spend a significant amount of your time to really understand your core problem. Talk to the potential customers/market that you are trying to address and understand if they would actually pay for your product or service. Even better if you can prove this market before you even approach a VC for funding.
  • This is fairly related to the first point. VC’s like to see that you know your market and customers better than anyone else. They want to know the exact problem you are going to try and solve and why you are the best person (or people) to solve the problem. 
  • A weak founding team could also mean that there is only one founder. We highly suggest finding a co-founder as teams with more than one founder have outperformed solo founders by 163%. We also suggest that you create a founding team that complements each other, not overlaps each other. For example, you may be a sales whizz, but you will need a technical co-founder to actually build the product.

CB Insight’s 12 technology trends to pay attention to in 2021

With the covid-19 pandemic ever prevalent, it is interesting to see how many of these trends revolve around the changes in how people work and live. With more individuals working from home, we may see future startups that will follow suit in correlation with these trends.


McKinsey’s top trends in tech

As a prolific investor in AI and machine learning startups, we noticed that both CB Insights and McKinsey technology trend reports showed that AI a trend. We believe that AI and machine learning is, and will be, an ever-increasing trend in startups as the need for such technology will be needed to create a competitive advantage.

Additionally, there is also an agreement between both reports that next-generation or quantum computing is a trend that will increase as computing advances.

What we found quite interesting and different was the trend of CleanTech in this report. The rapid growing need for clean and renewable energy generation is spawning a trend that could disrupt traditional business models in both industry structure and competitive dynamics. As we look to a more sustainable future, CleanTech could be the way to produce an abundant supply of green energy.


Notable Exits

Notable global startup exits this month


Funding

Some global startup seed rounds this month

NZ startup funding’s this month


Feedback

We would love to hear your thoughts about our newsletters!