As red ink applies to technology companies, SafetyCulture did well last fiscal year, with a cash loss of $35.5 million in FT22, an increase of approximately 50% from the $23 million loss in FY21.
Nasdaq-listed last week Atlassian Announced Results – A$52 Million Operating Loss for the September quarter. ASX-listed BNPL Zip Co posted a staggering loss of A$1.1 billion last fiscal year amid an impairment loss of $821.1 million on goodwill and intangible assets. Online retailer Kogan Posted a A loss of $35.5 million in FY22. Twitter’s new owner fired half of its staff over the weekend after saying the company was losing more than $4 million a day.
In that context, SafetyCulture’s losses are minor niggles. But coverage in a national newspaper of an after-tax loss of $62 million, based on the company’s own figures filed with company regulator, ASIC, has incensed Anear so much that he went to a rival national newspaper today to sue. about the local scrutiny his tech enterprises are undergoing, saying he is going to register the company in the US even though it will cost Australian jobs.
The US has less stringent reporting rules for private companies, and Delaware operates as a haven for companies that don’t tax non-state based companies. Fellow Surry Hills unicorn Canva is registered as a company in Delaware and Atlassian also moved to the US from the UK early this year.
Anear was mad at The Australian’s coverage last week, and tech editor David Swan’s use of “spiral” to describe the $62 million loss, calling it “sensational.” The figure includes the acquisition costs of two startups, $6 million for SHEQSY and $3 million for Inauro in June, but the founder, board member and CEO didn’t include that detail in the director’s report because it “would just be something else to do.” he told the AFR today.
“The word ‘spiral’ implies that everything is going down. In fact, the result was pretty much in line with what we expected this year, which was about $2.7 million per month cash burn,” Anear said.
He wants Australian corporate disclosure laws, which would require larger private companies to disclose their finances annually, or he will try to become a US company “within the next month or two”, acknowledging “it will definitely cost Australian jobs”.
“Why stay in Australia when we have all the disadvantages of a publicly traded company without the advantages?” he told the AFR and hinted that an American listing for the company is also in the pipeline.
The founder of SafetyCulture complained that the rules also gave foreign competitors an unfair advantage over Australian rivals.
“They can determine how much money they need to hire us; they can see where we invest and where we don’t,” he said.
“In the US, companies can remain private until they are listed. It’s no wonder Canva and others are based there, and now we want to move there too.”
But the opinion he gave the AFR is slightly different from the position Anear took with news.com.au last week to defend the company after the Australian report, which said competition was not such a big deal and losses will continue.
“We’re in a fortunate position to solve a problem in a unique way and we haven’t had many direct competitors, so we had the time to invest in the right areas in product and our operating platform,” he told news.com.au.
“We will continue to lose money for the next five years or more – it’s the nature of investing in high-growth companies and it’s unrealistic to expect us to make a profit early on as you invest in product development and bring in customers everywhere.”
The 18-year-old software company, valued at $2.2 billion at its latest VC raise in 2021, moved into a new, leased $38 million HQ in Sydney earlier this year.
US-based venture capital firm Insight Partners led a $95 million investment in SafetyCulture in May 2021.
ASIC’s financial reports show that FY22 revenue grew approximately 24%, from $74.5 million to $92.4 million, amid heavy investments in R&D and sales and marketing.
Startup Daily contacted SafetyCulture’s PR agency for a response to his comments, but was told Anear was traveling and “cannot comment at this time”.