“There’s great availability of capital for young companies,” says Doron Kempel, the CEO of software defined data center company SimpliVity.
Since being founded in 2009, the company has had five rounds of funding and raised $276 million dollars in equity and debt.
The notable thing is Kempel says the banks are keen to lend money to his business, something that probably underscores how difficult it is for banks to find suitable places to place funds.
As one of the unicorns – Simplivity’s last fund raising gave the company a valuation of over a billion dollars – it shouldn’t be surprising that banks are comfortable lending money to the business but it also underscores just how much money is available to startups with the right investors.
For those investors the paper returns are good as well, with Kempel observing each round of funding sees the company’s valuation triple.
So for companies with good ideas and unique stories it seems right now is a good time to be raising money, particularly if the founders can get one of the pedigree venture capital firms to invest.
The question now though is how many coffee apps and delivery services can the also ran VCs support?
Maybe do a bit of local research and see how much VCs here have to invest and how easy it is for a start-up to borrow money from a bank.
I’m talking globally Matt, specifically about companies backed by top US venture capital firms. I’ve written plenty about the challenges facing Australian startups, in my view this one of the many weakness in Australia’s ‘miracle economy.’