The Australian and New Zealand startup neighborhood will see a lift in funding this yr. Blackbird, a VC fund based mostly within the two south Pacific international locations, on Wednesday closed a fund at over AUD $1 billion, which is about USD $640 million, which the agency says is Australia’s largest fund up to now.
That is Blackbird’s fifth fund, and it’s double the dimensions of the VC’s final fund which closed in August 2020. A number of institutional buyers participated, together with superannuation funds like AustralianSuper, Hostplus, Australia’s sovereign wealth fund, the Future Fund, New Zealand’s sovereign wealth funds and New Zealand Progress Capital Companions Elevate fund, which is a government-backed fund.
A decade in the past, most Australian and particularly New Zealand institutional buyers didn’t need to put their cash anyplace close to tech startups. Their assist at this time indicators a maturation of the Australia/New Zealand enterprise capital area.
“[Superannuation fund] capital can go anyplace. It might go into the most effective Silicon Valley VCs,” Sam Wong, a accomplice at Blackbird, informed TechCrunch. “And so the truth that they’re selecting to speculate their cash at this scale with an Aussie and Kiwi fund marks a second for the ecosystem and exhibits that we’ve got earned our proper on the worldwide stage to handle that capital.”
In keeping with Wong, it is sensible for superannuation funds to again the tech area as a result of they’ve horizons within the many years and might afford to be affected person.
“What they actually care about is excessive returns so individuals can retire in dignity,” she mentioned. “And when you’ve got that long-term horizon, you possibly can search increased return belongings that don’t have liquidity profiles that, say, public markets do. And that’s precisely what we discovered within the Australian superannuation system — they love tech as a result of it’s excessive development, excessive return. It’s very lengthy dated, and so they don’t thoughts that it’s locked up for 10 years.”
The fund can also be supported by over 270 particular person buyers, a lot of whom are tech founders and operators that Blackbird backed via earlier funds, based on the agency. These founders will assist the fund each with their very own capital, but in addition their experience, information and connections, mentioned Wong.
The overall AUD $1 billion consists of three separate autos: an AUD $284 million (USD $182 million) core fund for pre-seed and seed stage Aussie corporations, an AUD $668 million (USD $472 million) follow-on fund to assist Blackbird portfolio corporations anyplace from “Collection A to the final spherical at Canva,” and a NZD $75 million (USD $44 million) devoted New Zealand fund, which can also be largely for pre-seed and seed stage corporations.
Blackbird prides itself on slicing the earliest checks, which may very well be anyplace from $25,000 for a small pre-seed to as much as $5 million for a seed spherical, mentioned Wong. The agency’s mandate is to spend money on founders with an Aussie or Kiwi connection, which often means they’re based mostly in these international locations, however usually finally ends up extending to those that based corporations overseas. Round 40% of Blackbird’s portfolio corporations are literally headquartered within the U.S., mentioned Phoebe Harrop, a principal at Blackbird.
The fund has already made 18 investments into startups in a broad vary of industries from AI to manufacturing to e-commerce. Final month, Blackbird invested in Sonder, an worker and pupil wellbeing firm, and Spice AI, an information and AI-driven infrastructure platform.
Blackbird mentioned it predicts tech corporations will contribute 20% of Australia’s GDP by 2032, which might be up from 8.5% at this time, based on the Tech Council of Australia.
“We’re right here to alter the tradition of Australia and New Zealand’s ecosystems, to make a distinction at a rustic stage,” mentioned Niki Scevak, accomplice at Blackbird, in a press release.