Leading entrepreneurs and two major superannuation funds will combine forces to launch Australia’s biggest-ever technology start-up venture capital fund, with more than $200 million set aside to back growing companies.
The new fund will be managed by Blackbird Ventures and has been backed by 96 technology entrepreneurs including Atlassian co-founder Mike Cannon-Brookes, as well as two major superannuation funds, First State Super and Hostplus Super.
It will target tech companies that would previously have headed overseas in search of bigger investments, and will exclusively back Australian companies. The new Blackbird fund is more than double the size of the next-largest Australian tech fund, Daniel Petre and Craig Blair’s AirTree Ventures at $60 million.
by Chris Becker
Its hard to be positive in an environment of negativity, particularly when both the government of the day and the government in waiting lack any narrative or leadership for a post-mining boom Australia – we’re in a wait and see mood for Turnbull to turn that ship around. The same applies, in the main, to corporate Australia and the investment banking industry, who are focused on how to keep seeking their exorbinant rents, ticket clipping retirement savings or blowing property bubbles left right and centre.
So on the back of news of a possible real leader at The Lodge, I’m harkened to see news that some elements of corporate Australia are making strides in the areas that are desperate for investment funding, namely technology.
From the AFR:
This is promising because finally, the bloated superannuation sector is putting their finger – a small finger mind you – into this huge bowl of potential opportunity, opportunity that is leaving Australia in droves seeking international capital with a higher tolerance for risk.
More on the super funds involvement – the corporate funds absence notable because its not-for-profit leading here:
First State Super has invested most at $110 million, and its chief investment officer, Richard Brandweiner, said it was a relatively low-risk, but important move. “It is a lot of money for the ecosystem, but it’s a tiny proportion of our $58 billion under management,” Mr Brandweiner said.
“The super sector has become so large in Australia that we need to think about our impact beyond just returns for our members. This also about investing in the country, because we need lots of strong technology companies in the future, and if we can help them stay here, that’s a win for everyone.”
Blackbird’s record with local start-ups is promising. The group co-ordinates an accelerator for early stage ideas, the initial fund for seed funding, and now the new fund means it can feasibly follow a company the whole way through its life cycle.
Its first fund has invested in 13 companies with two successful exits, and only one of its start-ups failed and shut down completely in its two years.
The fund is designed to boost the local ecosystem by backing companies with worldwide visions. Unlike many non-US funds, Blackbird has a ruthless focus on companies with global growth potential, rather than companies making Australian versions of successful existing overseas models.
Mr Scevak said it would be following the same approach in selecting investments for the new fund, and that about 70 per cent of capital would likely go to business software makers, while the remaining 30 per cent was earmarked for more outlandish bets such as the cryptocurrency tilt it made with Coinjar.
“This fund is for people with companies that they’re going to stick with for decades, that will be their life’s work, who never sell out and want to change the world,” Mr Scevak said.
This is not just about open chequebooks, rather the right type of funding at targeted stages of development. The environment for funding not only start ups but applied and pure research is stark and requires much more assistance from the superannuation sector. This is an excellent time to stop buying bank stocks and start funding the real future.