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2
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· Posted on
February 21, 2024

Dovetail hit almost-unicorn status with a $89 million cap raise thanks to the funding bubble

Dovetail are a Sydney-based startup that produces data analysis software.

What's the key learning?

  • Aussie customer research start-up Dovetail just raised $89 million, in what they say is a 'bubble-like' time for venture capital
  • A bubble is an economic cycle where company market values increase quickly, only to crash, or 'burst' even quicker...just like a bubble.

Background: Dovetail is a Sydney-based startup that launched back in 2017. They produce data analysis software to help businesses interpret survey responses, user feedback and interviews. 

What happened: The founders were early employees at Atlassian (ya know, real good pedigree). Now, they've just raised $89 million, valuing the company at a huge $960 million.

What else: But according to the founders (post capital raise), venture capital might be heading into bubble territory.

So what's the key learning?

💡A bubble is an economic cycle where company market values increase quickly...only to crash, or 'burst' even quicker. 

💡There are generally five stages to a bubble. We've got:

  1. Displacement - investors become interested in a new, shiny investment
  2. Boom - prices gain momentum quickly as investors surge into the market
  3. Euphoria - valuations soar to unrealistic levels
  4. Profit-taking - investors start to realise the bubble's about to burst, so they jet
  5. Panic-mode (aka burst) - prices tank.

💡Dovetail founders believe venture capital is currently in the Euphoria stage...which means we're not too far from a 'burst' - aka funds could dry up for other start-ups seeking funding.

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