This year, funding will increase for the New Zealand and Australian startup communities. Blackbeard, VC . FundIt is headquartered in the South Pacific nation and closed on Wednesday a fund of more that A$1 Billion, or approximately US$640 M, which it claims is the largest Australian fund.
This is the fifth Blackbird Fund. It’s twice as large as the last VC funds that closed in August 2020. Elevate, a government funded fund, was attended by many institutional investors including pension funds like AustralianSuper, Hostplus or Future Fund.
Approximately a decade ago, most Australian institutional investors and New Zealanders didn’t want their money to be near tech startups. Their support today signifies the maturing of venture capital in Australia and New Zealand.
“[Superannuation fund]Capital can be used anywhere. Blackbird partner Sam Wong told TechCrunch that the capital could be used by Silicon Valley’s top VCs. “So the fact that they chose to invest their money on this scale with an Australian and Kiwi fund represents a moment for the ecosystem and shows that we have earned our right on the global stage to manage that capital.”
Wong says it makes sense that pension funds support technology because they have contract opportunities and can be patient.
She said that what they really care about are higher returns to allow people to retire with dignity. You can also look for higher-yielding assets with a longer-term horizon if you don’t have the liquidity profile of public markets. This is exactly what we found in Australia’s pension system. They love technology because it offers high growth and high returns. It’s quite old, and they’d be happy to keep it for 10 years.”
According to Blackbird, the fund is also supported by more than 270 investors. Many of these are tech founders and operators who Blackbird has previously supported through other funds. Wong said that the fund will be supported by these founders with their own capital as well as their experience, knowledge, and connections.
The A$1 billion total is comprised of three separate vehicles. A$284million (US$182million), a seed fund for pre-incorporation, and seed stage companies. A$668million follow-up fund (US$472million), to support Blackbird portfolio businesses. You can find “Series A to Canva’s latest round” anywhere. The dedicated NZ$75 million (US$44 millions) fund is the same for preincorporation as seed stage businesses.
Blackbird prides themselves on cutting early checks. These checks can range from $25,000 for small seeds to $5 million for large seed rounds. The company’s mandate to invest in founders with Australian and Kiwi connections is usually to ensure they are based there, but it can also include those who have set up companies abroad. Phoebe Harrop (principal at Blackbird) stated that approximately 40% of Blackbird’s portfolio businesses are actually based in the United States.
The fund has made 18 investments in startups across a range of industries, including artificial intelligence, manufacturing, and e-commerce. Blackbird invested last month in Sonder, a student and employee wellness company, and Spice AI (an artificial intelligence-driven, data-driven infrastructure platform).
Blackbird stated it expects tech firms to contribute 20% to Australia’s gross domestic product by 2032. This will increase from 8.5% today. Australian Technology Council.
“We are here to change the culture of ecosystems in Australia and New Zealand, to make a difference at the country level,” Nikki Shivak, partner at Blackbird, said in a statement.
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