One of the heavyweights of the Silicon Valley debt ecosystem has warned that international growth venture firms have all but abandoned Australia, with growth funding for start-ups falling to a trickle.
“There’s always money for exceptional companies, especially if it’s a breakout company with incredible unit economics, metrics and growth,” he said. Rising interest rates in the face of hot inflation have led to a sudden rethink among VC firms and investors about what start-ups to continue funding.But the most pain has been felt by later-stage start-ups, particularly those that last raised funding during the height of the pandemic, before interest rates began rising and the IPO market was effectively shut.
In the first quarter of this year, there were only two funding rounds of over $50 million – those most often associated with growth venture firms – with agri-tech Loam Bio raising a $105 million Series B andMeanwhile, deal flow for angel, seed and sub-$5 million rounds remains more resilient.The firm most associated with the current growth retreat is Tiger Global Management, whose funding spree many believe skewed the private tech markets.