Experience
Technology & Communication
The asset values for e-commerce and technology start-ups have fallen significantly and a number of capital raising have resulted in what are “down rounds” highly dilutive capital raisings.
In the past 6 months we have then started to see layoffs across the start up space as they sought to become cash flow positive or at least decrease the cash drain. This has not however stopped the closures in the fast grocery delivery space and with food operator Deliveroo.
Key Challenges
- Olvera has worked with a number of start-up organisations working through changes in the industry supporting them through safe harbour programmes and new capital raises. Investors have become more reticent in continuing to fund new businesses that are focused solely on revenue growth demanding that they manage the cash burn and move to positive cash generation.
- Falling demand for fixed line services and strong price competition in the mobile services space have significantly constrained the subdivision’s ability to generate revenue. Consequently, industry revenue has fallen at an annualised 1.2% through 2021-2022, to $35 billion, but is projected to recover over the five years through 2026-27, to $37.2 billion.
- NBN is also forecast to drive sector declines, as a switch from copper systems to fibre optics has increased the number of internet retail services. Internet service providers have historically been among the fastest growing operators in the technology sector.
- Projected rise in subscribers and internet usage will support industry revenue growth. However, the market has become increasingly saturated over the period, reducing the total scope for industry expansion. Overall, industry revenue is forecast to grow at an annualised 1.1% over the five years through 2026-27, to $6.9 billion.
- Australia is home to some of the market leaders in technology security and data management but has one of the world’s smallest venture capital markets for technology startups.
- The recent data hacks which have affected a number of high-profile companies have highlighted to the public and corporate Australia the need for stronger cyber security and data management.
- The appetite in capital markets for technology startups with cash intensive operations has greater reduced while the recent collapse of FTX has further highlighted the need to strong corporate governance around these new technology platforms.
Our experience
Olvera has worked with a number of start-up organisations working through changes in the industry supporting them through safe harbour programmes and new capital raises.
Investors have become more reticent in continuing to fund new businesses that are focused solely on revenue growth demanding that they manage the cash burn and move to positive cash generation.
Case Studies
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