2022 has been yet another wild ride for Galileo Ventures and the tech industry.

Globally, just as the pandemic mostly ‘ended’ and borders reopened (thankfully), public markets nose dived and the frothy tech valuations of 2021 hit reality. VC’s pulled back and growth funding dried up, marking the beginning of the end for the tech bull-run of the last decade. 

At Galileo Ventures it has been ‘investing as usual’. 

We searched high and low for the next generation of exceptional emerging founders. Regardless of market cycles new entrepreneurs are always building, creating new companies that will change how the world operates and define the next cycle. And we’re investing in them.

Team Galileo has now made 16 investments with a few more closing to be announced. We’ve attracted and co-invested with leading global investors at seed, including A16Z and Insight, and we’re proud to quietly announce that fund 1 now ranks in the top quartile VC funds globally, but there is still a long way to go.

Most importantly, we supported incredible emerging founders to make a difference in this world. From userhing in electric flight (Kite Magnetics); to supporting mission-critical satellite launches in the UK (Nominal); helping usher sustainable practices in the top fashion brands (Rntr) and mine sites (Envirometrics); or simply helping over 50k people from around the world slow down and relax in a new category for ‘crowdhealing’ games (Kinder World) – our founders are at the frontier of the world's next biggest movements.

2023 is going to be busy. 

In 2023 we're on the hunt for exceptional emerging founders and we’re launching new initiatives for future top-tier operators in technology and product.

Stay tuned and happy holidays.

By the Numbers

• Invested in 16 seed-stage companies.
• Invested over $5m into exceptional emerging founders. 
• In-person events are back! We ran 3 major founder-only conferences including our first Melb Mini-Conf and annual Founder Retreat in Airlie Beach.
• Still the first VC fund investor in over 90% of our companies – first-time, first round is our rule, not an exception.

What we learned in 2022

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1. We’re founder-led. Not market-led.

We’re a founder-led investment firm and we filter for exceptional emerging founders – first-time high-growth founders, often diverse and overlooked by most VCs. 

We believe that backing the very best founders will naturally take us into new and different markets that may not even exist yet.

2. Companies should be fastest at the start, and slow down over time.

This lens applied means we only back founders who have demonstrated behaviour or executing and iterating very quickly before we invest – they’ve made productive progress and it's very obvious.

In practice this looks like multiple product experiments with customers, validation, multiple early-releases and product prototype iterations.

3.  Insight > experience: Companies need to be built on earned insight.

Why is it that most industry-veterans don't create world-changing startups? Why so often it is an ‘outsider’ that changes how an entire industry operates? 

We’ve found that exceptional emerging founders have deep customer insight into the problems of their industries because they’re earned it. This could be through thousands of hours of dealing with customers, or years building technology, or a new way to look at the world based on their lived experience.

Put simply, insight wins over raw experience any day. This is why industry veterans typically don’t create category-creating companies but emerging founders do. We believe this is a critical insight that might sound obvious but is much harder to filter for.

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What interests us in 2023

James, Partner: 2023 is going to be an important year for Galileo. We’re now attracting more incredible founders then ever before, competition is increasing in Australia as larger investors move earlier due to the lack of growth investing and more talented founders are starting companies than ever before.

Here a few trends I'm interested in exploring:

1. Generative AI: The emergence of large language models as our best approximate ‘AI intelligence’ and the pace of their applicability for all sorts of generative tasks from text to image to video, has stunned the world and researchers. Researchers are somewhat surprised that ‘more data’ would equal more applicability and better outputs. All the models will increase their size in orders of magnitude in the coming months (hello GPT4) leading to even better outputs. I’m very excited by founders and startups that are taking advantage of these models to create vastly different experiences and products. I believe the ‘next Google’ has already been created and that there will be more to come in the coming year.

2. Climate: We’ve made 3 climate related investments at Galileo – Rntr, Environmetrics and Kite Magnetics – and are looking for more. In particular I’m interested in new technologies, hardware or software, that have huge leverage in ushering in electric or hydrogen power in mobility, supply or storage. We’re also actively looking at high growth SaaS products and marketplaces that can help change industrial supply chains.

3. Gaming: Gaming is a special sector that is at the frontier of how we interact and relate to technology. The behaviour insights from games often find their way into other markets and enterprise products, for example our investment in Nominal, using gaming engines to produce mission critical space simulations or Lumi, using games to assist in players mental health creating a new category of ‘crowdhealing’ apps. I’m interested in founders that are building new types of games as well as the infrastructure around games that is one of the largest markets in the world today. 

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Hugh, Partner: With 2022 being the “year of the big valuation reset” in later, hotter markets (including public technology stocks!), 2023 will see returns “toward Earth”, which will be a lot more harmful for later stage companies who raised at high valuations with complex preference stacks than for earlier stage companies.

As a result, there’s never been a more exciting time to start a new company! Later-stage mess and distractions will open up talent markets (as we have seen in 2022) who will become available to be the next generation of founders and early team members.

2023 will see see more “AI toys” (think ChatGPT, the AI image generation apps, …) coming out on the market, but I think there’s still a time to go before we see them becoming too mainstream beyond these kind of isolated and “fun” examples. 

In that theme, here’s a song written by ChatGPT about why you should start a new company in 2023:

Verse 1: 

If you've got a dream and you're feeling bold
And you're ready to take on the world and go
Don't wait another day, don't hesitate
Now's the time to start, don't procrastinate

Chorus: 

There's never been a better time to start
A new startup, right from the heart
The world is waiting, the future is bright
So come on and join the fight

Verse 2: 

The opportunities are endless, the sky's the limit
You can build a business that's truly infinite
The world is changing, and so should you
Don't let anyone tell you what you can't do

Chorus: 

There's never been a better time to start
A new startup, right from the heart
The world is waiting, the future is bright
So come on and join the fight

Bridge:

Don't be afraid to take the risk
You never know what great things you'll accomplish
So go out there and chase your dreams
And make the most of everything it seems

Chorus: 

There's never been a better time to start
A new startup, right from the heart
The world is waiting, the future is bright
So come on and join the fight

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Luddy, Head of Platform: Coming into 2023,  I'm looking forward to being surprised. 

I think it's obvious what tech will be the highlights going into next year (ie. AI toys Hugh mentioned), however will be intrigued to see what use cases with benefit the most from it. 

As you know pre-seed and seed aren't just about the tech... it's about the founders and teams. Given how tumultuous the market and industry have been this year I am so looking forward to the new breed of founders/teams rising up from that. 

2023 will show founders to be even more creative, inspiring, and calculated than ever before, and I absolutely can't wait to be in awe, shocked, and inspired. 

See you in 2023!

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