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Speaker 1: My name is Lily Maddon and I'm a proud Arunda

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Speaker 1: Bunjelung Calcuttin woman from Gadighl Country. The Daily oz acknowledges

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Speaker 1: that this podcast is recorded on the lands of the

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Speaker 1: Gadighl people and pays respect to all Aboriginal and Torres

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Speaker 1: Strait Island and nations. We pay our respects to the

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Speaker 1: first peoples of these countries, both past and present.

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Speaker 2: Good morning and welcome to the Daily os. It is Friday,

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Speaker 2: the fourth of November. My name is Sam, I'm Nina.

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Speaker 2: Today on the podcast, we're going to be talking to

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Speaker 2: Maddie and Sophie from Your and Good Company about the

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Speaker 2: mysterious world of venture capital funding. It's like this treasure

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Speaker 2: chess that exists in startup land and I want to

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Speaker 2: tell you all about it and they're going to help

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Speaker 2: me out. But first, Nina, what is making headlines this morning?

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Speaker 3: Attorney General Mark Dreyfuss has said that complaints made under

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Speaker 3: the Racial Discrimination Act increased by fifty seven percent during

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Speaker 3: the pandemic. While speaking at an event hosted by the

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Speaker 3: Australian Human Rights Commission this week, Dreyfus said there are

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Speaker 3: allegations of race based misconduct across sporting codes and within

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Speaker 3: workplaces and in other aspects of public life.

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Speaker 2: New South Wales Chief Health Officer Kerry Chance has said

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Speaker 2: that COVID nineteen cases will rise over the coming weeks.

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Speaker 2: In a video posted on social media yesterday, Chance said quote,

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Speaker 2: We're entering the next COVID wave and urge people to

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Speaker 2: keep up to date on their vaccinations and stay at

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Speaker 2: home if they feel unwell.

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Speaker 3: National's leader David little Proud has said that Australians need

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Speaker 3: to begin conversations on the potential for a total ban

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Speaker 3: on gambling advertisements. It comes up to the federal government

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Speaker 3: announced new taglines would replace the current Gamble Responsibly line.

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Speaker 3: The new taglines are based on behavioral research and testing.

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Speaker 2: And your Friday good news. The Australian women's rugby league

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Speaker 2: team has begun their World Cup campaign with a seventy

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Speaker 2: four to niel victory over the Cook Islands. The World

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Speaker 2: Cup again this week after a year's postponement because of

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Speaker 2: COVID nineteen, with Australia seeking to defend its title after

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Speaker 2: taking out the tournament back in twenty seventeen. Maddie and

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Speaker 2: Sophie joining us. It's nice to have them back on

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Speaker 2: the podcast for a Friday episode of The Daily OS

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Speaker 2: meets a bit of Your In Good Company, which is

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Speaker 2: a fantastic finance podcast by these two wonderful women. Today,

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Speaker 2: I wanted to talk to you guys about the world

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Speaker 2: of VC and Maddie, perhaps it will start with you

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Speaker 2: before we dive into some big news from the VC world.

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Speaker 2: What is VC?

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Speaker 4: So the term VAC stands for benure capital and venture

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Speaker 4: capital funds invest in startups in exchange for company ownership.

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Speaker 4: So Sam, pretend I'm the partner of your In Good

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Speaker 4: Company VC fund and I am investing one million dollars

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Speaker 4: in TDA for a one percent stake in the company.

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Speaker 4: Pretty good valuation. I the VC fund make money by

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Speaker 4: investing in the early days when TDA is still in

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Speaker 4: the startup phase, then selling my investment in a few

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Speaker 4: years time when it becomes Australia's largest news outlet. Now

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Speaker 4: let's put the Daily ODS aside for a moment and

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Speaker 4: you'll see why in a second. But I have to say,

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Speaker 4: sounds like a pretty great investment. It's important to note

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Speaker 4: that investing in startups is actually considered really high risk,

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Speaker 4: and that is because, according to in broke. Ninety percent

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Speaker 4: of all startups fail. But you know what they say,

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Speaker 4: high risk can lead to high return, which is why

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Speaker 4: aventure capital funds attract big dollars from either high net

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Speaker 4: worth individuals or other financial institutions.

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Speaker 2: And so I know that there's a couple of big

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Speaker 2: VC funds in Australia and some names that come to

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Speaker 2: mind are ones like Blackbird, Air Tree, and square Peg.

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Speaker 2: There was some big news from Blackbird and square Peg

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Speaker 2: over the last couple of weeks. What's happened?

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Speaker 4: Yeah, So Blackbird is a well known VC fund in Australia,

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Speaker 4: having made several successful startup investments in the last few years,

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Speaker 4: including Canvas, Safety, Culture and Culture App a few names

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Speaker 4: that you might recognize, but it's definitely not alone in

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Speaker 4: its success. This week it announced that it raised one

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Speaker 4: billion dollars from big superannuation funds and wealthy private investors.

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Speaker 4: Last week, another AC firm, Square Peg Capital, also announced

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Speaker 4: it had closed a big new fund coming in at

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Speaker 4: eight hundred and sixty one million dollars. So not far behind.

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Speaker 2: So let's just follow the money there from it, just

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Speaker 2: to really draw out that example. So I have a

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Speaker 2: superfund and money goes into my super fund that I

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Speaker 2: know I'm not going to get until I'm sixty five,

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Speaker 2: and the superfund then gives the money to Blackbird, and

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Speaker 2: then Blackbird go out and find companies to invest in

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Speaker 2: in order to make me have a better return on

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Speaker 2: my superfund. Is that kind of how it works in

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Speaker 2: the long term.

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Speaker 4: Yeah, that's right, Sam. So some of the money that

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Speaker 4: Blackbird has raised will go towards, I guess, providing further

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Speaker 4: funding for its existing investments, so Canva Culture amph that

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Speaker 4: we mentioned earlier. But the Blackbird co founder, Rick Bak

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Speaker 4: has also said that they'll keep using the cash to

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Speaker 4: invest in early stage startups. So, according to the fund,

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Speaker 4: seventy percent of its investments are made before companies have

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Speaker 4: even started making money, and sometimes before a company has

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Speaker 4: even made a sale or completed a product, and it

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Speaker 4: says A plans to keep it that way.

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Speaker 2: So what will this mean for the Australian startup landscape.

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Speaker 4: Yeah, So the instability in the economy this year has

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Speaker 4: led to a really big downturn in startup investing, but apparently,

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Speaker 4: according to these guys, it is a great time to

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Speaker 4: be getting in. So in an interview with Smart Company,

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Speaker 4: the founder of Blackbird said, it's a time where we

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Speaker 4: can really seek out founders who are doing their life's

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Speaker 4: work and we can spend time with them before having

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Speaker 4: to make an investment decision. Larger amounts of money to

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Speaker 4: invest also creates a lot of opportunity to improve the

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Speaker 4: gender investment gap that exists in bench capital investing. The

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Speaker 4: unfortunate reality is that just twenty two percent of all

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Speaker 4: the money invested in ossie startups in twenty twenty one

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Speaker 4: had at least one female founder, and that's actually down

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Speaker 4: from twenty eight percent in the year before. In twenty

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Speaker 4: twenty and a pretty crazy start for you, the co

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Speaker 4: founder of one company accounted for sixty nine percent of

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Speaker 4: all female funding in Australia for a month of October.

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Speaker 4: Lucy Loeu is the co founder of air Wallax, which

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Speaker 4: is an online payments company, and she founded the business

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Speaker 4: with her two Melbourne unimates in twenty fifteen at age

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Speaker 4: twenty five. The business is now worth eight point six

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Speaker 4: billion dollars. But what has been coined the Lucy Effect,

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Speaker 4: she actually accounts for twenty two percent of all VC

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Speaker 4: funding to Ozzie female founders since beginning of twenty twenty one.

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Speaker 2: We're going to take a short break. We'll be right back. So,

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Speaker 2: you guys, female founders of a budding media company, and

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Speaker 2: we have a female founder in Zara Seidler here at

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Speaker 2: the Daily Os. What can we do to have more

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Speaker 2: female founders in the Australian ecosystem.

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Speaker 4: I think a lot of this really comes down to

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Speaker 4: the networks that exist within bench capital. So you know,

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Speaker 4: you can imagine that if you're looking to raise money

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Speaker 4: for your company, you're going to go first point of

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Speaker 4: call to the people that you know. So it has

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Speaker 4: this network effect of I guess guys reaching out to

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Speaker 4: guys that really compounds. So I think a big part

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Speaker 4: of it really comes down to getting more females in

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Speaker 4: investment positions so that they can see the potential of

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Speaker 4: female founders and the products that they're trying to sell.

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Speaker 2: I hope that that twenty two to twenty eight percent

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Speaker 2: gets well above fifty percent in the years to come.

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Speaker 2: And thank you so much, Maddie for those really valuable insights. Sophie,

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Speaker 2: if you were a VC fund, would you invest in

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Speaker 2: robots changing the restaurant industry?

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Speaker 5: Funny you ask that, because my story is about robots

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Speaker 5: changing in the restaurant.

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Speaker 2: This is my four hundred and thirty eighth episode of.

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Speaker 5: What a Segue? Sorry, well, yes, my story today is

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Speaker 5: all about robots changing the restaurant industry because a new

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Speaker 5: robot has been developed by the University of Tokyo which

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Speaker 5: can peel a banana, which I know sounds not that impressive,

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Speaker 5: but for a robot, fine motor skills are something that's

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Speaker 5: they have really struggled to master because it's something that's

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Speaker 5: unique to primates. So this university has shown a robot

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Speaker 5: how to peel a banana over seventeen thousand times, and

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Speaker 5: it can only peel it fifty seven percent of the time.

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Speaker 5: But the reason why this story is really interesting is

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Speaker 5: because it may point to the future of how robots

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Speaker 5: are going to be used in the restaurant industry.

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Speaker 2: So I can only peel banana fifty one percent of

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Speaker 2: the time, so that's already doing better than me. Do

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Speaker 2: we actually think that robots can place humans in the kitchen?

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Speaker 5: Yeah, well, I guess. For a bit of background, automation

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Speaker 5: has been really slow to take off in the food industry,

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Speaker 5: particularly in economies like the US. A major part of

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Speaker 5: this is that, you know, restaurant wages have been historically

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Speaker 5: really low, and so it's almost there's no incentive for

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Speaker 5: owners to shell out the money to actually invest in automation.

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Speaker 5: You know, for example, there's a machine called Flippy. Can

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Speaker 5: you guess what Flippy does?

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Speaker 2: Sanz appel a banana?

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Speaker 5: No Flippy flips burgers. But to run this machine it

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Speaker 5: costs three thousand dollars a month to do so. And

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Speaker 5: if you do a bit of quick math with the

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Speaker 5: minimum wage in the US, which is about that seven

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Speaker 5: dollar mark, it's actually cheaper to employ someone. But I

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Speaker 5: think posts the pandemic, things are really starting to change.

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Speaker 5: You know, between March and July twenty twenty two, an

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Speaker 5: average of seven hundred and sixty thousand people quit their

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Speaker 5: jobs in the US across the accommodation and food services industry,

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Speaker 5: and and restaurants are really experiencing shortages in workers. Plus

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Speaker 5: including that the fact that technology is coming down in cost,

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Speaker 5: I think we're really going to start to see robots

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Speaker 5: come into certain areas of the restaurant industry. Because we'll

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Speaker 5: just caveat that they don't have taste buds, so I'm

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Speaker 5: sure they can't necessarily take over everything.

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Speaker 2: They don't have taste buds. Yet they might have taste

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Speaker 2: buds one day. But it's interesting that they're kind of

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Speaker 2: reframing of this automation v. Human labor question that there

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Speaker 2: might be a situation where it's actually more about humans

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Speaker 2: not wanting to do the task rather than robots replacing

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Speaker 2: them out of kind of a too quick of a

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Speaker 2: succession in the transition.

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Speaker 5: And I also think that there is an element of

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Speaker 5: what consumers demand. I mean, for example, there's a really

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Speaker 5: cool company called Stellar Pizza, which has been founded by

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Speaker 5: the former SpaceX engineer, and pretty much this pizza is

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Speaker 5: made in a minute in the back of a truck.

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Speaker 5: Can you go anywhere, find you anywhere? Been done really quickly.

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Speaker 5: So I think there's definitely an element of you know,

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Speaker 5: consumers demand more, they want it in a faster time,

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Speaker 5: they want it made by an engineer of SpaceX. So

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Speaker 5: it's definitely a mix of things.

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Speaker 2: It was funny I was in La a couple of

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Speaker 2: months ago and I saw these little robots buzzing along

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Speaker 2: the sidewalk and stopping at crossings and everything, and they

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Speaker 2: were automated delivery of pizza. And they looked like little

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Speaker 2: Warlely machines. And they were buzzing around La stopping at

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Speaker 2: traffic lights and dodging cars, and they were doing their things.

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Speaker 2: So automation, automation is here. You know, it could be

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Speaker 2: only a matter of years until we're replaced in the

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Speaker 2: kitchen by Flippy.

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Speaker 5: I mean, I wouldn't mind that. I would love to

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Speaker 5: come home to a homemade burger from my automatic robot.

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Speaker 2: That's weird, but you know what, It's Friday, so we'll

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Speaker 2: let it slide. Sophie and Maddie, thank you so much

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Speaker 2: for coming on the Daily. I was this morning. I

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Speaker 2: hope you have a fantastic weekend. If you need some

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Speaker 2: weekend listening, check out the Mirror. We've got three episodes

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Speaker 2: up there and the final episode, the Big Finale, is

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Speaker 2: dropping on Monday morning early. Have a wonderful weekend wherever

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Speaker 2: you are.