SafetyCulture boss Luke Anear Start-up to leave Australia amid ‘sensationalist’ coverage, growing losses

SafetyCulture’s chief executive says he will move his company overseas unless local laws around financial disclosures are changed.

SafetyCulture chief executive Luke Anear, alongside Inauro Co-CEOs Angus Kennard and Craig Kesby. Picture: Supplied

The chief executive of Australian start-up SafetyCulture has threatened to shift his company’s headquarters to the US in a bid to keep its financial results private, amid mounting losses and what he described as “sensationalist” reporting of its cash burn rate.

SafetyCulture, which was most recently valued at $2.1bn and employs north of 600 people, posted a net loss of $62m for the year ended June 30 2022, according to documents filed with corporate regulator ASIC and first reported by The Australian, up from a loss of $23.1m a year earlier.

Its boss Luke Anear said because of the financial reporting around the company losses he now wants to re-domicile his company in the US, where competitors wouldn’t be able to easily access its financial information.

Mr Anear told the Financial Review his start-up was seriously considering “flipping up” to being a US corporation “within the next month or two”, unless Australian laws which force large companies to publicly disclose their financial statements are changed.

The executive said he didn’t write an explanation for the $62m loss in a director’s report because it would be “just another thing to do … we’d rather be serving our customers”.

“If we were to run everything from a US accounting point of view, then those dollars won’t flow through, and we will invest more in the US market. It definitely will cost Australian jobs,” he told the Financial Review.

“In the US, companies can remain private until they publicly list. It’s no wonder that Canva and others are domiciled there, and now we’re looking to relocate there too.”

Canva has been profitable and cashflow positive for the last five years.

SafetyCulture chief executive and founder Luke Anear. Picture: Nic Walker

Mr Anear described the coverage as “sensationalist”. However, The Australian’s report included commentary from Mr Anear in which he explained the financial results and described them as in line with internal and investor expectations.

The report also quoted Blackbird Ventures co-founder and partner Rick Baker who is on SafetyCulture’s board and said he’s happy with how the company is tracking.

SafetyCulture company employs north of 600 Australian workers across its Sydney and Townsville offices and has avoided lay-offs that have affected other local technology start-ups amid challenging macroeconomic conditions. Mr Anear had said the company had used funds to complete its Foveaux street Sydney headquarters and to make acquisitions.

“Burning cash is actually normal, and it’s more about how we’re going forward in terms of the year we’ve had and the investments we’re making in the different parts of the business,” Mr Anear told The Australian.

Investors in high-growth, privately held technology start-ups, of which SafetyCulture is one, have said comfortable with a company losing money as long as its unit economics are strong, and they see a path to profitability.

SafetyCulture was most recently valued at $2.1bn, when it raised a $99m funding round led by Index Partners and with participation from existing investors Tiger Global, Index Ventures and Blackbird.

Mr Anear said he wants SafetyCulture, which provides software for auditing and safety checks, to grow into a household name when it comes to quality and excellence in the workplace.

“We are on that mission as much as ever, and we continue to increase our impact around the world,“ he said.

“The nature of venture capital is that you’re investing in a future outcome, and that’s what allows tech companies like ours to create world-changing products in a relatively short period of time compared to traditional businesses.”

Originally published as SafetyCulture boss Luke Anear Start-up to leave Australia amid ‘sensationalist’ coverage, growing losses