☕️ Money muscle

Good morning.

Non-bank lender Fundabl is muscling into the VC scene with a $3.2m capital raise, aiming to compete with venture giants Airtree and Blackbird.

Fresh from the raising and with its new fund targeting between $500k and $5m investments, the Sydney-based fund wants to capitalise on a tough capital-raising environment for Aussie tech businesses.

Co-founder Ethan Singer told Capital Brief’s Jack Derwin Fundabl wants to eventually compete with the big VC funds with debt funding that allow founders to retain greater control of their company, usually over a three-year period.

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Market movers

PolyNovo's shares leaped almost 8% on Tuesday to $2.60 each, thanks to a healthy dose of full-year trading results that saw revenue balloon to $104.8m, up 57.5%.

"There are many highlights in the year just past,” said chair David Williams. “Organic growth… the strength of the UKI market from a slow start in non-burns. A third is the enormous need for our product in conflict zones and developing countries supported by WHO, charities and governments".

Looks like investors agree.

The quick sync

• ASIC’s probe into ANZ market trades during a $14b government bond sale involves suspected illegality and is more than a “please explain”, chairman Joe Longo says. (AFR)

• Demographic shifts may partly explain widespread selling of bank stocks by mum and dad investors - which has driven retail ownership of three of the big four to its lowest levels. (Capital Brief)

• The Greens are eyeing Labor seats in Melbourne in their bid to expand their representation in parliament. (Capital Brief)

• DroneShield CEO Oleg Vornik defends his company's lofty earnings multiple and criticised sceptics, first aired by Capital Brief, in its first investor call since the market darling's sharp selloff. (Capital Brief)

• Big bank CEOs say they are prepared to partner with private credit funds but have called on major players in the $2.3t sector to provide better disclosures to investors. (AFR)

Trading floor

M&A

• Bell Potter raised DroneShield's 12-month price target from $1 to $1.60 but downgraded its rating to 'hold' due to recent share price volatility. (Capital Brief)

• Quadrant Private Equity is set to sell its automotive products business, MotorOne, with Macquarie Capital handling the sale. (The Australian)

• Arc Energy renews efforts to find a backer amid increased M&A activity in its sector. (AFR)

• Adamantem Capital and Stephen Tindall have bid NZ$1.50 to NZ$1.70 per share for The Warehouse. (The Australian)

• Transurban and the Queensland government are planning to widen the Logan Motorway's western section to reduce congestion and improve safety. (Capital Brief)

• Affinity Equity hires UBS to sell Waste Services Group, expected to fetch around $1bn. (AFR)

• JPMorgan, Goldman Sachs, and Citi managed block trades, including Sidara's sale of Worley shares and Samurai Investments' offloading of 15.2m shares for $227m. (The Australian)

• Google's $23bn acquisition talks with cloud security startup Wiz fell through, which would have been its largest acquisition and nearly doubled Wiz's valuation. (Capital Brief)

• SunRice is buying SavourLife, a pet food company that donates half its profits to rescue dogs, for $20.3m. (BNA)

• Following its Boral acquisition, Seven Group may target new deals, with the Buckeridge Group's construction materials business rumored to be up for sale. (The Australian)

Capital Markets

• Iluka Resources reported lower first-half earnings despite quarterly growth, while discussing government funding for a $1.7bn rare earths refinery. (Capital Brief)

• Arena REIT is raising $120m to acquire 10 new early learning centre assets and support future growth. (Capital Brief)

• Insignia Financial shares rose as analysts balanced upgraded earnings guidance with balance sheet concerns. (Capital Brief)

• Telix Pharmaceuticals shares rose after Wilsons Advisory reaffirmed an 'overweight' rating and raised the 12-month target price, citing ASX 100 inclusion and business growth. (Capital Brief)

• Zip shares soared after announcing a $267 million capital raise and reporting a 22.1% increase in Q4 revenue and 19% growth in transaction volume. (Capital Brief)

VC

• Cuttable raised $5.5 million in seed funding to expand its AI-driven digital advertising services. (Capital Brief)

• Crimson Education retains its unicorn status following a successful funding round, with investors boosting valuations. (AFR)

People moves

• Birchal has cut costs by 30% through layoffs, contractor removals, and salary reductions after underperforming in funding volume in the first half of the year. (Smart Company)

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The watercooler

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