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Australian households spent $62.3 billion buying physical goods online last year, according to data published by Australia Post today.

The Inside Australian Shopping Report says online purchases have almost doubled pre-pandemic levels recording a 12.3 per cent increase compared to the previous period. Four in five Australian households shopped online last year across a broad range of retailers and categories.

Metro areas recorded a 12.9-per-cent increase year-on-year while regional areas recorded a 10.6 per cent boost. Top categories for shoppers include athleisure, baby products, pet products and footwear.

Australia Post Group CEO and MD Paul Graham said e-commerce was a ‘lifeline’ for people and businesses alike.

“Even as restrictions eased, Australia’s love of online shopping has not faltered, evidenced by the 5.4 million households we saw buying online each month last year, representing a 39 per cent increase from 2019.”

He added that today’s online shoppers are looking for choice and convenience, reliability in supply and delivery and sustainability is having an enormous impact on which brands shoppers choose to buy from and where they spend their money.

In October last year, Australia Post announced an additional $400 million for new facilities, fleet and technology to meet the increasing demand from businesses trading online.

Auspost named Melbourne’s Point Cook suburb as the nation’s biggest shopping hotspot, followed by Liverpool in Sydney and Hoppers Crossing in Victoria.

Luxury retailers Missoni and Brunello Cucinelli have set a hectic pace in snaring prime leases in the Dexus-owned 25 Martin Place as the city comes back to life with workers and the influx of new residents.

Known previously as the MLC Centre, 25 Martin Place will be home to exclusive labels, including Valentino, as part of the centre’s $170 million transformation.

Upmarket retail has defied the global pandemic and stores across the city are have continued to open or sign leases over the past two years as consumer confidence improves, as evidenced by the latest ANZ-Roy Morgan Consumer Confidence Index, which rose by 1.3 per cent to 94.6 in the past week.

Stewart Hutcheon, Dexus’ executive general manager, industrial, retail and healthcare, said the group was excited that Missoni and Brunello Cucinelli have chosen to launch their flagship operations at 25 Martin Place in the Castlereagh Street luxe retail precinct.

“These premium and contemporary retail experiences will transform the boulevard of Castlereagh Street into a modern runway of luxury retail in Sydney’s CBD, with each luxury brand meticulously selected to curate a premium global shopping experience,” he said.

Dexus, the ASX-listed diversified property owner and manager with a market value of $11.63 billion, changed the name of the MLC Centre in Sydney’s city last year to 25 Martin Place to reflect the next phase for the long-standing tower.

It also sits close to the new Metro station and a swathe of new luxury apartment towers which will swell the number of people living in the city.

At the base of the Harry Seidler-designed 67-storey office tower, the retail destination will deliver around 6000 square metres of retail across four levels, with over 50 diverse retail, dining and cultural experiences.

The flagship stores are under licence from the family-owned Graaf Group, a property acquisition, development and management company that continues to expand its portfolio of luxury fashion retail, prestige property and high-end hospitality venues.

Italian fashion house Missoni is a globally recognised name across the fashion and design industries, recognised for their fine craftsmanship and iconic chevron pattern, while Brunello Cucinelli has ready-to-wear men’s and women’s collection, shoes, bags, small leather goods and accessories.

Gennaro Autore, founding director, Graaf Group said, as exclusive licensee he chose 25 Martin Place as a key destination to launch the flagship stores of well-known international brands Missoni and Brunello Cucinelli in the Australian market.

“We are delighted to bring these fashion ateliers to Sydney, extending their global presence as they join many of the world’s most-applauded fashion houses in the Australian market,” Autore said.

Dexus’ head of retail and healthcare leasing, Eddie Giraldo, said work was undertaken with Harry Seidler and Associates and architect Woods Bagot to build on Seidler’s original design principles to deliver a contemporary precinct and revitalised public spaces for Sydney’s CBD.

“The luxury retail, dining and entertainment offering at 25 Martin Place is reinvigorating the CBD day and night, reaffirming its status as the vibrant destination for fashion, culture and dining,” Giraldo said.

It is expected that further retailers will join the 25 Martin Place precinct in the coming months.

In addition to the new luxury precinct fronting onto Martin Place will be a revitalised Theatre Royal Sydney, as well as greater connectivity for workers and visitors via a new commercial tower entrance from Castlereagh Street.

Listed online marketplace retailer MyDeal has launched a new activities platform, Amazed.com, using data to ramp up personalised local experiences for consumers in Australia.

Product director Sam Pinney is heading the business, who joined from rival online marketplace Redbubble about eight months ago.

Over 250 suppliers are already on the marketplace, including Melbourne Zoo, Liberty Balloon Flights and Experience Co. There are over 1000 experiences.

Mr Pinney told The Australian Financial Review there is a big opportunity on the back of COVID-19 with consumers looking for local and personalised activities with penetration growing as more sales shift online.

“We are also offering bespoke type experiences, which might be local foods and local history tours, through to cruising local distilleries and breweries. So, we’re really trying to bring the best of those secret adventures that are just around the corner, and you never knew about them,” he said.

“With a few taps and clicks, I can find it, book it, and be on my way. Data is going to drive the experience. [It is all about] connecting the right activity with the right customer at the right time.”

Amazed will use data to recommend relevant experiences, categories, and sellers at scale using real time 1-to-1 AI technology.

“With the power of data and insights, these suppliers in future will be able to expand their businesses,” Mr Pinney said.

MyDeal chief executive and founder Sean Senvirtne added Amazed had been 18 months in the making and the activities are resonating with MyDeal’s existing consumers.

He said Amazed is a “fully open marketplace” which means control remains with the supplier partners, helping to set it apart amid a crowded space with the likes of Booking.com, Red Balloon, Airbnb and Adrenaline all seeking a slice of consumers’ dollars.

Globally, consumers spend about $US145 billion ($193 billion) each year on experiences and activities, a market which is tipped to reach a nearly 20 per cent compound annual growth rate over the next five years, according to Euromonitor International.

Mr Senvirtne said while COVID-19 gave the experiences market “a bit of a punch in the guts”, it is starting to open back up again.

“We fundamentally believe you do not have to travel to try something new,” he said.

Amazed earns revenue via commission on gross transaction value (GTV) through the marketplace. GTV represents the total value of cash transactions before deducting refunds, discounts and coupons, but after GST.

Amazed is rolling out in Australia, with New Zealand to follow later this calendar year, and the US and the UK in 2023.

Mr Senvirtne plans to leverage existing marketing and customer acquisition capability, which means Amazed can scale up fast. MyDeal’s customer acquisition costs rose to $22.1 in the December half from $17.6 a year ago.

It will invest $1.5 million per year over the medium term into Amazed, which will be funded out of existing cash which stood at around $40 million as at December 31.

MyDeal is an online marketplace that sells mainly home and garden items, including outdoor furniture.

Like Temple & Webster, Kogan and Wesfarmer’s Catch, MyDeal reaped the benefits of the pandemic last year as consumers spent up on their homes since they could not travel overseas.

In the latest December half year, MyDeal revenue rose 55 per cent to $33 million, underpinned by a 20 per cent rise in gross sales to $153 million. More than 60 per cent of customers returned to buy again.

Mr Senvirtne said the group was on track to meet its full-year guidance for gross sales of $270 million and $500 million gross sales and positive earnings by fiscal 2025, which does not include Amazed gross transactions.

Twitter is on the hunt for a new Australian chief after former country head Suzy Nicoletti quietly departed the controversial social media platform.

Ms Nicoletti, who replaced Karen Stocks as managing director of Twitter Australia in 2016, is the third country manager from the Asia-Pacific region to depart the short form, text-focussed social media platform since last August.

A Twitter spokesman said Ms Nicoletti, who was a senior Google Australia employee before moving to Twitter, had decided to leave Twitter to “spend more time with her family” and would not be returning from her maternity leave.

“We will immediately start the search for our new Australia managing director, and will consider both internal and external candidates,” the spokesman said. “Angus Keene will continue to serve as acting managing director of Twitter Australia.”

Ms Nicoletti confirmed to this masthead she had this week joined Israeli e-commerce startup Yotpo as Vice President and General Manager of the Japan and Asia-Pacific region.

She said she was excited with the new role as Australian retailers flourished online. “Australian e-commerce brands have demonstrated they can play on the global stage, and it’s Yotpo’s mission to ensure we’re on the ground to help them succeed,” Ms Nicoletti said in a statement.

Twitter, which is facing increased scrutiny over its role in the spread of misinformation, has been hit by key executive departures across the Asia-Pacific region over the past year.

Southeast Asia managing director Arvinder Gujral departed his role in August after eight years with the company. At the same time Twitter made the role of managing director in India, which had been held by Manish Maheshwari, redundant and replaced the position with a “leadership council”.

Twitter co-founder Jack Dorsey resigned as chief executive late last year to focus on his other company, Block, which owns payments companies Square and Afterpay. Former Twitter chief technology officer Parag Agrawal now heads that company.

Along with other social media giants, Twitter has become a focus of debates about misinformation, free speech and content moderation globally, putting its bosses in the spotlight. In Australia, the federal government has launched a Parliamentary inquiry into online safety, legislated to give more powers to the eSafety Commissioner and flagged laws to help people unmask anonymous accounts that damage their reputations.

Yotpo, which was founded in 2011, and is valued at US$1.4 billion (AU$1.9 billion), offers a marketing platform to brands doing business online such as KMart, General Pants and Rip Curl, with features including text messages, referral codes and reviews.

David Michaeli, Yotpo’s head of new markets, said the company had been growing quickly in Australia as the country’s online retailers increased their numbers and trade as a result of COVID-driven restrictions.

“With this in mind, we knew we needed the local leadership team to be no less than excellent, and we’re now proud to welcome Suzy to join and lead this all-star team,” Mr Michaeli said.

Zip Co said its all-scrip acquisition of Sezzle will help it achieve faster profitability, pledging to get to positive cash earnings by the 2024 financial year as a larger user base makes the payments platform more attractive to US retailers.

Zip is raising $200 million via a placement and share purchase plan to drive growth on the back of the acquisition of United States-focused Sezzle, as the buy now, pay later industry races to get to scale and reduce bloated costs.

The deal values Sezzle at $491 million, according to Zip, a 22 per cent premium to spot prices of its ASX-listed shares, which remained in a trading halt on Monday. Investors have been pushing for loss-making technology companies to focus more on profits and show disciplined use of capital, given interest rates are set to rise.

The transaction, due to be completed in the July quarter, has been unanimously approved by the boards of both companies.

“We have taken stock of what is happening in the world around us and capital markets, so it was important to put in place a target to achieve sustainable growth much faster than we had originally forecast,” Zip co-founder Larry Diamond told The Australian Financial Review.

“We were already thinking about that and this transaction helps us sharpen our thinking and simplify the investor story as well.”

The combined business will have more than 13 million customers (Zip’s 10 million plus Sezzle’s 3.4 million); and 129,000 merchants (Zip’s 82,000 plus Sezzle’s 47,000).

Sezzle will be rebranded as Zip, which also took over the Quadpay brand in the US after buying it in 2020. Zip will become more focused on the US overall, with 60 per cent of sales to be generated there, up from 48 per cent now.

Zip expects $130 million of synergies from the deal as overlapping costs are eliminated, and for top-line growth to continue. Mr Diamond said buy now, pay later is expected to see the strongest growth of any payment method in the US, from a low base of 2 per cent.

In the US, Zip’s customer app is superior to Sezzle’s but Sezzle has been stronger in merchant relationships at the checkout.

Analysts said in the medium term, a larger Zip would be more attractive to financial institutions looking to acquire BNPL after its larger rival Afterpay was scooped up by Block, formerly Square.

“I think the deal makes a lot of sense, especially for Sezzle, which is too small and probably wouldn’t have survived on its own,” said analyst Marc Kennis from Stocks Down Under.

“The new combination probably puts Zip/Sezzle more prominently on the radar screens of large financial institutions ... An acquisition of Zip with Sezzle is still the likely end game for the company, in my view. In the US, the new combo is probably the most attractive independent player right now.”

However, one banker said the deal points to panic in the buy now, pay later sector, with shares in Zip and some smaller operators down around 80 per cent from peak levels. “Zip placing stock at a discount and buying a sub-scale business at a premium?” he said. “The banker in me struggles to remember a deal that smacks of more desperation, and where putting two failed strategies together makes a successful one.”

Stronger balance sheet

Zip will look to list its shares on a US exchange as part of the deal, opening up fresh capital-raising options. Its ASX stock is one of the most highly traded stocks among retail investors.

The $150 million placement and accompanying $50 million share purchase plan was first reported in The Australian Financial Review’s Street Talk column on Sunday evening. Zip will issue 78.3 million new shares, equal to 13.3 per cent of its current shares on issue. Street Talk reported on Monday morning the shares will be placed for $1.90 each, a 14 per cent discount to the last close.

Sezzle founder Charlie Youakim will join Zip as head of Americas and as an executive director of its board. Sezzle has relationships with several large US merchants not on Zip’s books, including Ikea, Target and Shopify.

Zip said the merger would take place under the laws of the US state of Delaware. Shareholders in Sezzle, whose shares jumped 14 per cent on Friday, will receive 0.98 Zip shares for each Sezzle share they own. When completed, Zip shareholders would own around 78 per cent of the combined group while Sezzle shareholders would own the remaining 22 per cent.

“With Sezzle, we are doubling down in the US, and believe we have what it takes to win in that core market,” Mr Diamond said on the investor call.

The deal comes as Zip released delayed interim results showing a deepening loss and bad debts. Last week it pre-reported a cash EBTDA loss for the first half of $108 million, much deeper than analysts had expected. It’s adjusted loss before tax was $153.6 million.

Zip pledged the acquisition of Sezzle would help it reach positive EBTDA by the 2024 financial year, although analysts said more detail is needed to get confidence it can hit the target.

“Achievement of [free cash flow] break-even will require a combination of higher volumes, which will require Zip to grow its loan book, and right-sizing of its current cost base, in addition to revenue and cost synergy targets being achieved,” said UBS analyst Tom Beadle.

Improving credit quality

Zip revealed net bad debts had risen to 2.6 per cent of sales, an increase of 132 basis points on 2021 levels. Bad debts plus expected credit losses rose 402 per cent to $148.3 million, representing 3.3 per cent of sales. Marketing expenses rose by 182 per cent to $74.5 million.

Zip co-founder Peter Gray said close attention is being given to improving credit quality to reduce losses to the target of 2 per cent of sales. He added it is well able to withstand rising cash rates; a 25 basis point increase in base rates will increase funding costs for a “pay in four” transaction by 2 basis points, he said.

“We are committed to our global expansion plans but are taking a more disciplined approach,” Mr Gray said.

Strong transaction growth continues: Zip reported record sales volumes of $4.5 billion through its platform over the first half, up 93 per cent, and around half the value that is going through Afterpay. Revenue is also at record levels, up 89 per cent at $302 million for the half.

Zip’s total customers grew to 9.9 million, up 74 per cent compared with the end of the previous first half; its merchant numbers grew 113 per cent to 81,800.

Path to profitability

The focus on creating a path to profitability comes as Zip’s share price suffered a horror run, falling 30 per cent in the past month as investors worried about deteriorating unit economics, although it rose sharply at the end of last week.

While Zip pointed to record volumes it said higher than expected bad debts had squeezed the “cash transaction margin” to 2.1 per cent, down from 3 per cent in the second half of last year. Zip said it would lift this margin when the merger is complete to target higher than 2.5 per cent over the medium term.

The acquisition of Sezzle comes amid a wave of industry consolidation. Afterpay’s co-founders Nick Molnar and Anthony Eisen sold to Block, which will use BNPL as part of a broader range of services in a financial super app. Meanwhile, Humm, a sub-scale operator, is being acquired by Latitude.

Zip has already been scooping up BNPL investments, including Quadpay, a transformative deal to grow in the US market, struck in the middle of 2020.

Like Block’s Cash App, Zip also aspires to create a multipurpose digital wallet for users that provides banking and investment options as well as BNPL products. Late last year it formed a partnership with WebBank and will compete more directly with US neobanks.

Some have a dim view of Zip’s ability to win in the US, even with Sezzle. “Zip buying Sezzle is basically the Titanic buying the Hindenburg,” consultant Brad Kelly said on social media last week.

But Mr Gray said bad debts will not deter it from releasing new products in the US. “Despite the current credit conditions affecting this jurisdiction, the growth trajectory continues, and the US continues to present growth opportunities, given low BNPL penetration levels,” he said.

• Smart receipt startup Slyp has raised $25 million in a Series A funding round to fuel its mission to digitise receipts for businesses and individual consumers. 
• The Australian fintech says it wants one in two Australians accessing Slyp through their banking apps by the end of the year. 
• The company is among a raft of startups globally seeking to build products around digitised receipts.

Smart receipt startup Slyp has raised $25 million in a Series A funding round to fuel its mission to digitise receipts for businesses and individual consumers. 

The Australian fintech says it wants one in two Australians accessing Slyp through their banking apps by the end of the year. 

Along with further investment from the big four banks, which backed and helped build the technology behind Slyp, the funding round was also supported by new investors including Luke Sayers’ advisory and investments firm Sayers Group, and Catch Group’s Gabby and Hezi Leibovich.

The company, which was founded in 2016, is among a raft of startups globally seeking to build products around digitised receipts, as e-commerce and online banking has innovated and businesses have raced to catch up. 

At its core, Slyp enables receipts to be shared directly into a customer’s banking app in near real-time.

Beyond the improved experience for consumers, such as reminders about product warranties, or the ability to connect directly to the retailer’s website, Slyp follows a raft of similar startups globally that have sold themselves to businesses as a way to use receipts as another touchpoint for digital marketing, with the ability to accumulate and analyse more data.

The UK’s Flux partnered with Barclays in October last year to onboard its digital receipts platform for the bank’s customers. 

While Slyp’s product is free for consumers to use, banks and merchants currently pay a fee. Banks are charged a recurring subscription fee based on the number of active users, while there’s a transaction fee for merchants.

The raise follows several business developments in recent months, including a deal signed with Chemist Warehouse along with more than 100 other retail and hospitality groups like General Pants Co, Harris Farm and Mitre10. 

And in October the company partnered with its main Australian competitor, Divipay, an all-in-one smart corporate card and expense management platform, to launch in-app digital receipts for businesses at the point of sale. 

Co-founded by Paul Weingarth and Spiro Rokos, previously PayPal executives, along with former ANZ group data officer Mike Boyd, at this stage the Slyp technology only works with NAB’s banking app or via SMS. 

However the company has planned to go through the integration process with another of the banking giants by the end of the year. 

Weingarth said moving toward integration with its backers, the big banks, was crucial for its ability to scale in coming months, with the funding round giving it another 18 to 24 months of runway.

“NAB has been our foundational banking partner, and they’ve supported us and helped us grow into a product-ready scalable platform,” Weingarth said. 

“That gives you confidence and conviction when you walk into another bank that you’ve already gone through the red tape with another tier one bank,” he said. 

“It derisks the decision for a large bank. NAB took that risk, and we owe a lot to NAB.”

The next step is building a new loyalty product, which Slyp intends to launch within six months, that will let consumers link loyalty cards to their payment cards and “set and forget”.

Peter Mastos, founding partner at VC firm Sayers, said the last few years have seen an explosion in the breadth of fintech startups. 

“[This year] is going to be all about finding innovative solutions that scale rapidly and efficiently. Smart receipts are one of those solutions where we scratch our heads and ask ’why doesn’t this exist already?’,” Mastos said. 

• A newly-released report on hiring trends by global recruitment firm Talent reveals the impact of talent shortages in the tech sector.
• Its analysis of global markets showed workers’ salaries had soared by 15% to 30% on average.
• Legacy organisations, including the big four banks, recruited the lion’s share of talent.

Australian tech workers are fielding counteroffers of up to 30% and tech roles are seeing pay rises of around 15%, according to new data, as restricted border access and the resulting skills shortage offer a boon for those in in-demand fields. 

A new report from global recruitment giant Talent examines global market conditions, along with hiring trends and predictions for the 16 cities the organisation works across in Australia and New Zealand, Africa, Europe, the Middle East, and the US. 

Along with revealing the most in-demand tech skills for 2022, it released findings on the local tech talent pool and skills trends, along with the benefits beyond salary candidates are looking for.

Globally, the widespread dearth of talent in growing sectors continued to be reflected in soaring salary increases and jumps in counteroffers. 

Tech salaries are increasing 15-30% on average globally, Talent’s analysis showed.

Additionally, it said counter offers for tech roles were up 20% to 30%, with candidates reporting they were fielding two to three opportunities on the go per job search. 

Unsurprisingly, given the noise from tech companies committing to permanently transitioning to remote-first work, the report showed the ability to work from home was now a non-negotiable for candidates. 

Legacy organisations gain largest share of talent 

Talent’s data showed tech workers in Sydney generally have a tenure of 1.9 years, with the top employers Telstra, Optus, Westpac, Commonwealth Bank, and IBM.

In Melbourne the top-hiring companies also included NBN Australia, Australia Post, along with NAB and ANZ. Employees clocked an average tenure of 1.8 years. 

Several industry experts have told Business Insider Australia in-demand workers are less attracted to the stability of legacy organisations and even established tech companies, favouring startups innovating in newer areas like fintech and crypto. 

A wave of early- and mid-career Australians jumping ship from legacy businesses, global consultancy firms, and even the fast-growing fintech space, in order to get in on the ground floor of the crypto boom.

However, the data suggests the ability for banks and government to offer salaries pushing the top end of the bracket, along with their relative size, are continuing to recruit a wide pool of the country’s talent. 

Talent’s salary guide places the average salary of a senior developer and business analyst in Sydney at $170,000.

Data scientists, data analysts and analytics managers salaries round out at $150,000, $90,000 and $150,000 respectively, it said.

In Melbourne, the average highest paying tech salaries before C-suite positions included big data architects at $230,000 and cloud architects at $220,000. 

The average salary for business intelligence architects is $200,000, the report said.  

Borders will reopen but impact will lag

Simon Yeung, managing director at Talent in Victoria, said he expected continuing merger and acquisition activity within the superannuation and wealth management sectors, along with “further activity in the banking sector as it gears up for open banking in February 2022 and a continued rise in digital businesses”.  

The next few months will only accelerate demand for tech skills to enable these projects, he said.

Matthew Munson, managing director at Talent in NSW, said with the exception of travel and hospitality, every sector in Australia had seen significant growth since the start of the pandemic. 

He expected the market would continue on this trajectory for the next six to 12 months, but conceded future COVID-19 variants and the ongoing relaxing of international borders could influence conditions.

“When the borders are opened to skilled migrants there will still be a lag effect when it comes to the impact this will have,” Munson said. 

“The demand for top talent looks to continue to increase and all the organisations that we work with are expecting to grow their teams in 2022.” 

Liam Millward and William Gao might be the youngest founders that venture capital firm Blackbird has ever worked with, but both have had plenty of tech experience before raising cash for their e-commerce start-up Instant.

After finishing year 12 at the age of sixteen, Millward had already launched a number of business enterprises including his own online store, while Gao spent school holidays working for ASX-listed WiseTech Global before going on to study computer science and creating a pet accessories business as a side hustle.

That early experience led the duo to create Instant, an online checkout platform that has just closed out a $2.2 million pre-seed raise with backing from well-known investors, including Blackbird Ventures, Tinder co-founder Justin Mateen, Zip founder Larry Diamond and Reinventure.

The teenagers’ tech backgrounds have also helped shape the ambitions for their company: to build the future of a frictionless economy.

“Anywhere you see an item, we want to give you the ability to purchase that item instantly. We’re sticking away from being a one-click checkout and want to be the Amazon Marketplace of ecommerce,” Millward, 18, says.

Instant launched in a small handful of stores at the end of 2021 and its founders are now ready to formally launch the company and expand its user base.

The company’s core product is a one-button payments platform that can be used anywhere online. Customers fill out their payment and delivery details once and then every time they shop at a store that uses Instant, they can make purchases instantly.

Both Millward and Gao have seen first-hand the high levels of “abandoned carts” in their own online stores, and believe their platform will help solve this headache, whether that’s for paying bills or buying products promoted on social media.

“One of the main problems I encountered as a merchant was really high abandonment rate. From my experience, I knew this was a real problem,” Gao says.

Millward notes they have ambitions of evolving beyond one-click checkout companies like Fast.

“We’re focused not just on the one-click checkout, but how we can become that marketplace for merchants where we can give them a whole suite of tools,” he says.

Instant’s raise is the largest known pre-seed round in Australian history, and the founders acknowledge it happened “accidentally”.

The duo had applied to the Startmate accelerator program last year, and while not successful in joining the program, their application got them on Blackbird’s radar. When Blackbird checked in a few months later on the company, Millward and Gao had made significant progress and were ready to make a formal pitch.

“Liam was seventeen years old when we met him six months ago, and William is only two years his senior,” says Blackbird partner Niki Scevak.

“They’ve shown a level of composure, maturity and conviction that would be impressive for founders twice their age.”

Millward and Gao also have had the benefit of watching a range of fintech founders hit global success before them.

Their fintech heroes include the founders of Afterpay, Zip and Eucalyptus, all of which have raised significant capital and made significant innovations in their industries.

“Larry [Diamond] has been building an incredible business... [with Zip] - and Afterpay has shown what Australian tech can do,” Gao says.

As the duo starts hiring staff to build out the company, they are confident they’ll work out how to be effective bosses of a growing company.

“I guess we’ll figure it out -we’ve gotten to this point,” Millward says.

“[It’ll be] a bit of fun and a bit of organised chaos - that’s what startups are,” says Gao.

More than a decade after selling their first payroll start-up to local tech giant Xero, Karbon co-founders Stuart McLeod and John Freeman have scored $US66 million ($93 million) for their accounting practice management software company from one of the world’s best investors in industry-specific software businesses.

The renowned investor behind Tidemark Capital, former Technology Crossover Ventures (TCV) veteran David Yuan, got in touch with Karbon late last year. Despite not actively looking for more capital, the Aussie founders said they felt compelled to engage.

The funding from Tidemark came with a $US285 million ($402 million) post-money valuation, which represents a 5.7 times jump in 11 months since Karbon raised $US10 million in a round led by Five Elms, which valued it at $US50 million.

“When Dave reached out we stood up and took notice because he’s one of the premier investors in vertical SaaS [software as a service],” Mr McLeod told The Australian Financial Review.

“He is world-class, is extremely intelligent, has an amazing team he’s built at Tidemark, and has the history and capacity to invest in portfolio companies like Toast, Siteminder and Xero even.”

While at TCV, Mr Yuan was also involved in investments in a rollcall of tech success stories, including TikTok’s parent company ByteDance, Facebook, Splunk and LinkedIn.

Cloud-based company Karbon, which is headquartered in the US but has about half of its workforce (including co-founder Mr Freeman) in Australia, provides software for small and medium-sized accounting firms to run their practices, including client and project management tools, performance analytics and workflow automation.

It has 2500 accounting firms signed up in 20 countries and is increasing its revenue by about 100 per cent year-on-year. Based on LinkedIn data, there are between 160,000 and 170,000 accounting firms globally, giving Karbon a little over 1 per cent of the market.

Depressing days

Mr McLeod said the latest raise was a contrast to its earlier rounds, where investors were less enthusiastic.

“In the series A round, we did 65 or 66 meetings. We had some very depressing and disheartening days up and down Sand Hill Road [in Silicon Valley] and [the investors] were probably right, we weren’t ready,” he said.

“We didn’t have a massively expanding market, or the growth figures they expected. It was a hard lesson, but one that we took as an opportunity to really work hard, persevere, and be resilient and ... now, two years into COVID-19, everyone is looking for progressive and well-thought-through software like ours that give accountants an edge.”

Mr McLeod and Mr Freeman started Karbon in 2014, three years after selling their previous company, Paycycle, to Xero for $1.5 million.

While Xero and MYOB have practice management software, Karbon’s largest rivals are legacy desktop-based incumbents from companies including CCH and Thomson Reuters.

Push into larger firms

Mr Mcleod said Karbon was focused on building more features into its platform, including time-based billing, invoicing, accounts receivable integration and, ultimately, payments.

It is doubling its client base every year, and he said the next big milestone would be to hit 10,000 accounting firms on the platform.

As part of this plan, the company is pushing into larger firms, and is looking to hire an additional 170 people this year.

“We want to push up market and service some larger firms,” he said.

“We also want to hit $100 million in revenue in the next five to six years. We’re on target for that, and that’s what we’re aiming for.”

Karbon’s raise is the latest in a series of big rounds announced already in 2022. Last week, Cyara banked more than $US350 million from K1 Investment Management. In January, Milkrun scored $75 million from Tiger Global Management, Dovetail raised $89 million at a $960 million valuation, and Sydney-based digital health start-up Eucalyptus locked in $60 million in a round led by Mary Meeker’s Bond Capital.

Mr Yuan said Karbon was exactly what he looked for in a vertical SaaS company.

“[It’s] a clear category leader and a magical user experience that empowers modern accountants to serve their clients better,” he said.

“Accountants are rapidly shifting to digital as the key trust advisers to SMB. We’re excited to support Stuart and the Karbon team build the next great vertical platform to drive this industry transformation.”

Amazon.com is more than doubling the maximum base salary it pays employees to $US350,000 ($491,370) from $US160,000 ($224,620).

“This past year has seen a particularly competitive labour market, and in doing a thorough analysis of various options, weighing the economics of our business and the need to remain competitive for attracting and retaining top talent, we decided to make meaningfully bigger increases to our compensation levels than we do in a typical year,” the company told employees on Monday US time in a memo reviewed by Bloomberg.

Amazon also said it was increasing the compensation ranges of most jobs globally and was changing the timing of stock awards to align with promotions.

Like many big employers, Amazon has struggled to hire and keep workers of late. The company has long relied on stock awards, betting it can entice workers to take positions even if the base pay is low. But the stock languished in 2021, gaining just 2.4 per cent while the S&P 500 jumped 27 per cent, and the strategy began to lose its appeal.

Media reports indicate the turnover rate inside Amazon has reached crisis levels, and a record 50 vice presidents departed last year.

Amazon’s salary rise was reported earlier by Insider.

The e-commerce giant employed 1.6 million globally as of December 31, including warehouse workers who are paid hourly and office staff who earn annual salaries. Amazon declined to say how many employees would receive the bump in pay announced on Monday.

Amazon pays warehouse workers at least $US15 an hour and in September said it had raised average wages for these employees to $US18 an hour. During the pandemic, the company has spent heavily on its logistics operation, hiring hundreds of thousands of people and paying bonuses to new recruits.

Investors have been warily watching Amazon’s rising costs and expressed relief when the company reported a strong fourth quarter last week and said an annual Prime subscription would rise $US20 to $US139.

The shares soared almost 14 per cent on Friday and were up a further 1 per cent to $US3174.47 at 1.35pm on Monday in New York.