smart company I spoke to Alex Khor from Afterwork Ventures about the current startup landscape and the great success stories that are now channeling talent and ideas into a new generation of leading Australian and New Zealand companies.
In early September, Khor joined the jury. the pitchUpfront, he helps us understand how his outlook is being shaped by current market forces.
We are in an ongoing pandemic and face economic uncertainty. How would you describe the current startup and venture capital landscape?
We spend a lot of time thinking about the macro environment and whether there has been a big move. There is geopolitical uncertainty across Europe, supply chain issues that all boil down to COVID-19, and of course inflation. They have all joined the pandemic as a headwind. While this is undeniably related to the factors just mentioned, the biggest phenomenon of the VC and startup landscape in Australia has been the reaction of the markets. And most importantly, the public markets are falling in love with the technology. On the corporate side, we see a near-term slowdown in the pace of allocation across several funds and are playing with closer scrutiny, particularly on valuations.
How has it changed your approach and how do you respond to pitches?
We haven’t changed the principles we use to understand and identify the best early-stage startups. While markets may recalculate to value a company, our job has always been to focus on the part of the curve where short-term market divergence has little or no relevance, and that’s where founders don’t build anything – from zero to one walk. A founder’s ability to do so independently of what is happening in the capital markets is the most important value driver.
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Have you ever had a difficult time for new startups? What are your biggest challenges at the moment?
It is fun. As far as it’s been a tough time for new startups, I think it’s worth taking a step back and saying: Many factors haven’t changed at all due to the recent boom in startups and tech activity. Afterwork has always believed in creating a self-sustaining cycle. The first group of founders and operators on the road to great success of companies like Canva and Atlassian and many other Australian and New Zealand tech startups are beginning to recycle their talent and knowledge into a second generation of iconic companies. and it’s not going to change any time soon.
The flip side of the picture would be that despite some of the short-term reactions mentioned, there are many venture funds like Afterworks that have raised record amounts of home-hunting capital. We are very open to actively exploring opportunities for new and follow-on investments.
What got you excited about the last 12 months in space?
It’s really stimulating for us to see the collaboration and support that has taken place within the early-stage startup ecosystem. In response to some of these near-term challenges. A good example of this is Afterwork, we teamed up with another great ecosystem operator at EarlyWork and started a project called BetweenWork, an initiative to bring together workers who have recently been made redundant in Australia and New Zealand. With companies that are hiring.
Want more Alex Khor? do not miss the pitchWhere he will join our jury.