G’day and welcome to your weekly edition of Overnight Success - your download on all the important things that have happened in the Aussie startup ecosystem. 🚀
Sponsor shoutout!
Super pleased to be working with Carta for the next few months. I’m teaming up with the Carta team on the 2nd morning of Southstart to host a coffee catch-up between investors and founders. Register here! This week, Carta is sharing its epic state-of-the-private-market-funding report for the entire startup ecosystem.
👀 Headlines 👀
💰 Eucalyptus’ $1.6 billion sale to Hims & Hers is ranking among the largest employee-liquidity events in Australian startup history, creating more than 100 staff millionaires. More details and reporting have followed the epic news, but some have called attention to the acquirer, Hims & Hers. Below is a breakdown of the acquisition contract. (SEC 8-K from Hims & Hers)
Who gets paid and how much?
There are two groups of people receiving money from this deal: the key employees (founders and staff who owned shares) and other sellers (VC’s, investors, etc.).
Key employees are getting a deal tied to the business's future performance: 40% of their total payout is paid upfront when the deal closes around mid-2026, with the remaining 60% paid only if Eucalyptus hits specific revenue and EBITDA targets over the next three years (2026, 2027, and 2028). It’s obvious why they want the people who built the business to stay motivated and keep growing it after the acquisition. If the targets aren't met, that 60% could be reduced or lost entirely.
Other sellers (investors and ordinary shareholders) have a much more predictable payment schedule. They receive roughly 18% of their total payout at close, then steady instalments every three months for the following 18 months. A small 10% portion of their payout is also tied to those same performance targets, but the bulk of their money comes through on a fixed schedule regardless of the business's performance. Investors essentially get a relatively clean and quick exit compared to the founders & employees.
One important catch for everyone:
Hims & Hers may pay up to 60% of deferred and performance-based payments in Hims & Hers stock rather than cash. They get to make that decision themselves, at their discretion. This isn’t unusual, but what would have some shareholders concerned is Hims&Hers' falling share price, which is down 61% over the last year and ~50% since the start of this year. The number of shares given will be based on a volume-weighted average sales price for the previous 10 days. If you play the extreme bear case, Euc employees could receive 60% of their earnout in penny-stock shares that are hard to sell. I don’t think this will happen. The key callout here is that Hims&Hers is currently being sued by Novo Nordisk over copycat versions of the Wegovy drug, which is driving the share price down.
For Eucalyptus employees who join Hims & Hers after the deal closes, there's a separate retention package in addition to the other benefits. They'll receive up to $50 million in restricted stock units (essentially shares that vest over time) at closing, and then an additional $12.5 million in stock each year for the following four years. This is purely designed to keep talented staff from leaving once the acquisition is complete.
TL;DR: The simple version: Investors get most of their money on a predictable schedule over 18 months. Founders and key staff receive 40% cash upfront but must earn the majority of their payout by growing the business over three years. Everyone should be aware that a significant portion of what they're owed could come in the form of Hims & Hers stock rather than cash. And Eucalyptus employees who stay on get a generous stock package spread over four years to incentivise them to stick around.
🎨 Canva has acquired two startups, Cavalry and MangoAI, as it deepens its push into professional creative tools and performance-driven marketing. (TechCrunch, Startup Daily)
UK-based Cavalry specialises in 2D motion animation across advertising, gaming and generative art. Its technology will be integrated into Canva’s Affinity professional design suite, adding native motion editing alongside photo, vector and layout tools. Canva acquired Affinity in 2024, revamped the product last year and made it free for all users. Since then, the suite has been downloaded more than 5 million times. The addition of Cavalry closes a key gap in motion editing for professional creators.
MangoAI, previously operating in stealth, has been building reinforcement learning systems to optimise video ad performance. Its product enables advertisers to launch campaigns, observe outcomes and continuously improve results.
MangoAI was founded by former Netflix executives Nirmal Govind and Vinith Misra. Govind will join Canva as its first chief algorithms officer, while Misra will focus on advancing Canva’s marketing products.
The acquisitions build on Canva’s recent marketing expansion, including the purchase of MagicBrief in early 2025 and the launch of Canva Grow, a tool for asset creation and performance measurement.
🏥 Melbourne healthtech scaleup Heidi has acquired UK-based AI healthcare platform Automedica, deepening its push beyond AI scribing into a broader suite of clinical AI products. (Startup Daily)
The acquisition follows $125 million in venture funding raised in 2025 for Heidi, including a $98m Series B at a $703m valuation, underscoring Heidi’s rapid scale and capital backing.
Post-acquisition, Heidi launched Heidi Evidence, an AI tool delivering real-time, evidence-based clinical insights during consultations, built partly on Anthropic’s Claude models and Automedica’s evidence-led framework. Launch video here!
Heidi also unveiled Heidi Comms, an AI coordination layer for healthcare teams covering patient communications and care planning. Launch post here!
The deal strengthens Heidi’s UK footprint and provides access to the MHRA AI Airlock, a regulatory sandbox designed to accelerate safe deployment of healthcare AI.
🧪 The CSIRO says long-term underfunding has forced deep job cuts, with up to 350 research roles and 800+ non-research roles cut over the past 18 months after exhausting cost-saving options. (Innovation Aus)
CSIRO says long-term underfunding has forced deep job cuts, with up to 350 research roles and 800+ non-research roles cut over the past 18 months after exhausting cost-saving options.
In an 86-page Senate submission, CSIRO argues successive governments have failed to fund its true operating costs for more than a decade, while expenses for facilities, labour, cybersecurity and research infrastructure have surged.
A one-off $233m funding package announced in December was insufficient to stop the cuts, with CSIRO estimating it needs $80m–$135m per year for the next 10 years to remain sustainable.
CSIRO warns that without structural funding reform, its ability to deliver national science, innovation and economic outcomes will continue to erode.
State of Private Markets: 2025 in review
The numbers are in, and 2025 was a big year for startup funding. Startups on Carta raised nearly $120B, up 17% from 2024. Down rounds hit a three-year low, AI valuations are soaring, and capital is consolidating into fewer, larger rounds at a pace not seen in six years.
Get the full picture in Carta's latest report.
⚡ Startup Retro ⚡
UpGuard levels up with $105M Series C for AI-powered cyber risk platform
Founders: Mike Baukes and Alan Sharp-Paul
Tasmanian-founded cybersecurity scaleup UpGuard has raised US$75 million (A$105m) in a Series C round to accelerate its push into AI-driven cyber risk management, as demand surges for tools that help companies manage sprawling security exposure across suppliers, staff and systems.
The round was led by New York–based growth equity firm Springcoast Capital, with participation from existing backers August Capital, Square Peg and Pelion Venture Partners.
UpGuard plans to deploy the capital into product development, go-to-market expansion and selective acquisitions, with a focus on scaling its cyber risk posture management (CRPM) platform. The software uses AI to continuously assess risk across traditionally neglected areas, including third-party vendors, external attack surfaces, workforce security, data-sharing trust and automated governance, risk and compliance workflows.
Founded in 2012 as ScriptRock by Mike Baukes and Alan Sharp-Paul, the company now serves customers in more than 90 countries, with staff across 14 markets. Baukes says the goal is to bridge the gap between security operations and risk management, particularly for mid-market companies with lean security teams.
UpGuard participated in one of the early Startmate Accelerator programs,14 years ago. According to Startmate CEO Phoebe Pincus, UpGuard is now Startmate's most valuable company. UpGuard is headquartered in Hobart, Tasmania, with its US base in Mountain View, California.
Due Diligence: Forbes, Startup Daily, Capital Brief
EatClub lands $27M growth round at $200M+ valuation to offer dynamic discounting in restaurants and bars
Founders: Pan Koutlakis and Ben Tyler
Melbourne-based hospitality startup EatClub has raised a fresh $27 million from existing investors. The latest round was led by Marbruck, with EVP and CoAct also doubling down. While EatClub declined to confirm its valuation, sources say it now sits comfortably north of $200 million.
The company, backed early by celebrity chef Marco Pierre White, launched in London in May last year and has already signed up more than 1,000 restaurants in the city. Buoyed by that traction, EatClub is now accelerating plans to expand into Manchester and further international markets later this year.
Founded in Melbourne in 2017 by former nightclub manager Pan Koutlakis and banker Ben Tyler, EatClub allows restaurants to offer dynamic, time-specific discounts, sometimes up to 50 per cent, to fill otherwise empty tables, borrowing pricing logic from airlines and hotels.
The business has now surpassed 5,000 restaurant partners globally, with order volumes tripling over the past nine months. White’s profile, particularly in the UK, has helped the brand cut through quickly with both diners and venues.
Beyond geographic expansion, EatClub will invest in a new AI-powered platform designed to forecast restaurant revenue hour by hour, helping venues respond to unseen demand drivers such as local events. The company is also scaling EatClub Earn, a loyalty program that builds dining credit across restaurants and retail, with ambitions to expand into experiences and grocery, turning idle capacity into a growing, closed-loop economy for hospitality.
Due Diligence: AFR
SavvyWise snags $600K Seed round at $10M valuation to build AI tax research platform
Founders: Pan Koutlakis and banker Ben Tyler
Perth-based AI tax research startup SavvyWise has raised an over-subscribed $600,000 seed round at a $10 million valuation, just seven months after incorporating, and notably, without needing the capital to survive.
Founded in July 2025 by veteran accountant Drew Pflaum and AI developer Agastya Patel, SavvyWise is building a purpose-built AI tax research platform tailored specifically for Australian accountants. Since launching in November, the product has attracted sign-up interest from more than 1,500 accountants and 500 accounting firms, signalling strong early market pull.
Rather than raising out of necessity, the founders say the decision was driven by momentum and a desire to bring early supporters, including customers, employees, friends and family, into the cap table. The trigger came when a client unexpectedly upgraded to SavvyWise’s highest-priced plan, prompting the team to open a deliberately modest raise targeting $250,000 to $500,000.
Interest quickly exceeded expectations. Commitments passed the minimum target within days, and the round closed weeks later at more than $600,000.
The capital will be deployed across three priorities: marketing to reach accountants unfamiliar with the platform, building an exclusive tax knowledge library authored by specialist tax lawyers, and strengthening product capability, security and infrastructure. New features are already in internal testing, with customer rollout expected in the coming weeks.
Due Diligence: StartupNews
Swan AI secures $6M for an AI GTM platform built mostly with AI agents and automation
Founders: Amos Bar-Joseph, Ido Goldberg, Niv Oppenhaim
Israel-based Swan AI has raised $6 million to build what it claims will be the first truly “autonomous business,” betting that systems, not people, will define the next generation of high-growth companies.
The round was led by Link Ventures, with participation from Fresh Fund, Collider and Australian-based Gandel Invest. Rather than using capital to hire aggressively, Swan AI says it will focus on scaling intelligence through software, aiming for an ambitious $10 million in revenue per employee.
Swan’s team suggest startups misuse capital by defaulting to hiring or layering automation on top of legacy structures that were never designed for AI. Instead, the company is rethinking go-to-market from first principles, shifting execution away from humans and into autonomous systems.
At the centre of the product is Swan’s AI “GTM Engineer,” which handles orchestration, maintenance and technical complexity, while humans retain judgment, prioritisation and accountability. The pitch: revenue leaders shouldn’t need to become engineers to run modern GTM stacks. The approach appears to be resonating. In 2025, Swan grew from zero to more than 200 customers with just three employees.
Due Diligence: Founder Announcement
Baseten raises $300M Series E for smart inference processing for AI companies
Founders: Tuhin Srivastava, Philip Howes, Amir Haghighat and Pankaj Gupta
SF-based AI infrastructure startup Baseten has raised a $300 million in Series E funding at a $5 billion valuation, cementing its position as one of the fastest-growing platforms powering large-scale AI inference in production.
The round was led by IVP and CapitalG, both doubling down on their prior investments, with participation from NVIDIA and a deep bench of backers, including 01A, Altimeter, Battery Ventures, BOND, BoxGroup, Blackbird Ventures, Conviction, and Greylock. Blackbird have invested since they previously invested in Tuhin Srivastava and Phil Howes' startup Shape Analytics in 2017, which was acquired by Baseten.
Founded six years ago, Baseten focuses on one of the hardest problems in applied AI: inference at scale. While running a single model is trivial, serving millions of real-time requests across dozens of specialised models quickly becomes a distributed systems challenge involving scarce GPUs, rapidly evolving architectures and complex orchestration across clouds. Baseten abstracts that complexity, handling hardware provisioning, model optimisation and intelligent request routing so customers can focus on building products.
That challenge is intensifying as AI fragments away from monolithic foundation models toward constellations of task-specific systems. Baseten’s multi-cloud, multi-silicon approach is designed for a future where workloads may run across NVIDIA, AMD or TPU hardware and divvies up to whichever is fastest and cheapest at the time.
Inference volume on the platform grew 100x last year, driven by customers such as Notion, Cursor and Abridge. With reasoning models and agentic systems dramatically increasing compute demand, investors see inference infrastructure as one of the stickiest and most valuable layers in the AI stack.
Due Diligence: Blackbird Investment Notes, Baseten Series E announcement
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💰 New Fund, Who’s this? 💰
😇 Archangel Ventures is raising a $40 million Fund II, focused on backing Australian founders at pre-seed and seed, with managing partner Ben Armstrong confirming roughly 50% of the target is already committed, largely from existing investors.
The raise is entirely non-institutional, continuing Archangel’s retail-heavy LP model after its 2022 ESVCLP, which was backed by 150+ individual wholesale investors, including founders and operators.
Fund II is being raised against a tough backdrop for small funds, as capital has concentrated with mega-funds like Blackbird, Airtree and Square Peg, each of which has closed or is closing ~$650–700m vehicles.
Archangel’s Fund I track record includes an exit via MagicBrief’s acquisition by Canva, alongside breakout performers like Heidi, supporting the case for continued LP backing despite the challenging fundraising climate.
🚀 Wins 🚀
💰The NSW Government has awarded over $1 million (total) to 22 startups in round one of the 2025–26 MVP Ventures Program, targeting companies moving from prototype to commercial rollout. (NSW Government Announcement)
🏗️ Babylon Nexus raised MVP funding to scale its construction payments and risk platform, using real-time visibility and AI-driven insights to improve project delivery.
🧠 BIMLOGIQ secured capital to expand BIMLOGIQ Copilot, an AI tool cutting design and documentation time across the construction sector.
🤖 Puralink received funding to advance its autonomous robotics platform for pipe inspection, mapping and repair in critical infrastructure.
👶 E&J Enterprises will use the grant to commercialise Bubbafly, a patented formula-dispensing baby bottle designed for on-the-go feeding.
🏥 Loquens raised funding to roll out Healingua, a clinician-built communication tool for aged care residents with language or cognitive barriers.
🔐 One-Touch Business Technology Solutions secured capital to scale its platform, helping medical practices manage cyber risk, finance and compliance.
⌚ Walking Tall Health will accelerate the commercial launch of onBeat2, a wearable designed to improve mobility and reduce falls for people with Parkinson’s disease.
🔋 Thermal Dawn received MVP funding to pilot and test a low-cost residential thermal storage system that replaces lithium batteries using daytime solar.
📆 Notice Board 📆
☕ In Adelaide for Southstart? Come grab a coffee on me and Carta!
We’re hosting a community coffee for founders and investors on the morning of the second day of Southstart! If you’re a local founder wanting to meet travelling investors, or vice versa, this is a coffee you don’t want to miss! Register here!
🤘 Blackbird Giants is back with Cohort 11 with an IRL twist.
Giants is a free mentoring program designed for ambitious, early-stage startups; 5 IRL meetups in Sydney, 4 IRL meetups in Melbourne and 1-1 virtual mentoring. It includes a dedicated founder community, access to the Blackbird investment team, and connects you with world-class mentors from the ANZ tech ecosystem to supercharge your startup idea.
🧑🎓 Airtree Ventures is launching Airtree Pathfinders, a four-week program giving university students hands-on exposure to the startup ecosystem.
The program skips traditional lectures, focusing instead on practical, real-world learning led by the Airtree team. Participants will get five learning sessions, two in-person events, and direct connections to founders, operators and ecosystem builders. Apply via this form!
Would you like to promote an event or an opportunity? Enquire about a Notice Board promotion by replying to this email.
🧠 KaaS (Knowledge as a Service)
Will’s Pick 💁 Swan AI’s Founder Announcing their fundraising video, and more importantly, how it was made with AI.
This video is incredible. It stops you scrolling, grabs your attention and shows you what Swan AI’s product can apparently do. It’s blatantly made by AI, but I still watched it. Thankfully, the founder shared the exact playbook on how they made it and apparently drove $3M in pipeline.
All the characters were founders overlaid with Higgsfield AI. The soundtrack was the founder's spouse with Suno AI on top. The voiceover? You guessed it. The founder is reading a script enhanced by ElevenLabs.
Anyway, as someone who's seen their fair share of fundraising announcements, this stood out!
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👋 Will