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Blackbird’s latest $1 billion AUD fund signals maturation of the Australian, New Zealand venture scene • londonbusinessblog.com

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The startup community in Australia and New Zealand will see a boost in funding this year. Blackbird, a venture capital fund based in the two countries in the South Pacific, closed a fund on Wednesday for more than AUD$1 billion, which is about $640 million, which the company says is Australia’s largest fund to date. .

This is Blackbird’s fifth fund and it is twice the size of the last venture capital fund that closed in August 2020. Several institutional investors participated, including pension funds such as AustralianSuper, Hostplus, the Australian sovereign wealth fund, the Future Fund, the New Zealand sovereign wealth funds and New Zealand Growth Capital Partners Elevate fund, a government-backed fund.

Ten years ago, most Australian and especially New Zealand institutional investors didn’t want to put their money anywhere near tech startups. Their support today points to a maturation of the venture capital space in Australia/New Zealand.

“[Superannuation fund] capital can go anywhere. It can go into Silicon Valley’s best VCs,” Sam Wong, a partner at Blackbird, told londonbusinessblog.com. “And so the fact that they choose to invest their money on this scale with an Aussie and Kiwi fund, marks a moment for the ecosystem and shows that we have earned our right on the global stage to manage that capital.”

According to Wong, it makes sense for pension funds to support the tech space, as they have a horizon over the decades and can afford to be patient.

“What they really care about is high returns so people can retire with dignity,” she said. “And if you have that long-term horizon, you can look for higher-yielding assets that don’t have a liquidity profile that, say, public markets do. And that’s exactly what we found in the Australian pension system: they like technology because it’s high growth and high return. It’s very old and they don’t mind being locked up for 10 years.”

The fund is also backed by more than 270 individual investors, many of whom are tech founders and operators who Blackbird has supported through previous funds, the company said. Those founders will support the fund with their own capital as well as their expertise, knowledge and connections, Wong said.

The total AUD$1 billion consists of three separate vehicles: an AUD$284 million (USD$182 million) core fund for pre-seed and seed stage Aussie companies, an AUD$668 million (USD$472 million) follow-up fund to support Blackbird- portfolio companies anywhere from “Series A to the latest round at Canva”, and a NZD$75 million (USD$44 million) New Zealand special fund, which is also largely dedicated to pre-seed and seed stage companies.

Blackbird prides itself on reducing the earliest checks, which can range from $25,000 for a small pre-seed to up to $5 million for a seed round, Wong said. The company’s mandate is to invest in founders with an Aussie or Kiwi affiliation, which usually means based in those countries, but often extends to those who have founded companies abroad. About 40% of the companies in Blackbird’s portfolio are headquartered in the US, said Phoebe Harrop, president of Blackbird.

The fund has already made 18 investments in startups across a wide range of industries, from AI to manufacturing to e-commerce. Last month, Blackbird invested in Sonder, an employee and student wellness company, and Spice AI, a data and AI-driven infrastructure platform.

Blackbird said it predicts tech companies will contribute 20% of Australia’s GDP by 2032, which the Technical Council of Australia.

“We are here to change the culture of the ecosystems of Australia and New Zealand, to make a difference at the country level,” said Niki Scevak, a partner at Blackbird, in a statement.

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