Venture

Revere is creating a ratings system for the venture capital industry • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in Revere, Startups, VentureNo Comments

The venture capital industry is built on signals. Lead investors help close rounds, pro rata rights show promise of a company, and the partner title gives validity to folks within firms looking to close deals. Revere, a new bet being built by former AngelList executive Eric Woo and family office operator Chris Shen, is playing upon these characteristics. The startup, launching publicly today, is building a rating system for the venture capital industry. The goal is to create a more standardized way to track information about emerging fund managers, so that institutional investors know how to navigate the shifting landscape. “There’s just too much influence in a small number of people, where if Keith Rabois or Elon Musk just tweet something, everyone just jumps on the bandwagon.” Woo said. “In the space of emerging managers, typically that signal comes from big anchor LPs.” How it works Revere’s pitch is that a wider audience wants to participate in backing venture capitalists; they just need the signal on where to go and how to gauge (since proof of consistent returns aren’t necessarily a reality thanks to the whole 10-year horizon thing). Using data provided by an emerging venture firm, Revere uses 20 categories to verify, aggregate and research into the quality of the firm across 5 areas: sourcing, team, value add, track record and firm management. It then creates a heat map, using the same provided data set, that shows, upon quick glance, a firm’s strengths and weaknesses in said categories. Research reports include everything from fund formation details, management structure, strategy and service providers, when evaluating the firm. It’s doing due diligence, and to date, Revere has written over 80 reports. The strategy is reminiscent of what Cambridge Associates has been doing for years, but the startup claims to do it cheaper, faster and with emerging fund managers as a key focus. For example, Revere doesn’t charge fund managers for reports; instead it charges LPs on a per-rating basis, or a monthly subscription fee for access to all reports. The 11-person startup currently takes around two weeks to whip up a report. Over time, if demand increases, it will get harder to turn around reports in that same timeframe. As Revere gathers more data, it sees an opportunity to create more performance benchmarks for the asset class, something that Pitchbook and Cambridge Analytics hasn’t done well, per Woo. “The moment we’re able to stand up and say here are the benchmarks, and we’re showing you why funds that are smaller, at an earlier stage are outperforming, then we think that’s going to be literally a sea change in terms of perception of risk,” from the LP side. The startup currently has over 100 funds on it platform. Revere declined to share any customer names, but said that one of its first customers was a sizable investment consultant. The company doesn’t see itself becoming a marketplace that helps conduct transactions between verified firms and interested LPs; but did confirm that millions have been invested in funds as a result of its reports. While Revere is not able to widely disseminate a report with actual fund manager data, the format, tone, and structure of the sample data in the template report below gives a good sense of what subscribers see. REVERE Ratings – Lantern Ve… by ZebethMedia But who rates the ratings? Ratings is a sensitive topic in venture, only reinforced by some of the reactions I got by investors when telling them about this ratings platform. VC ratings sites have popped up in the past, largely led by and for founders, but have always struggled with negative bias selection and the difficulty of verifying individual accounts. Backchannel, currently accepting beta users on its Testflight, wants to be a private subreddit for founders and LPs. Revere will need to convince investors that this isn’t a ranking of who’s hot and who’s not, but instead research-based recommendations meant for LPs (not tech twitter). Still, Revere could find itself falling into the same trap that other have. Subjectivity in some of the qualitative reporting of new venture firms could raise questions. The company doesn’t use hard science or artificial intelligence to make conclusions about a firm, meaning that bias could easily sneak in. Would Woo feel stronger about a former AngelList exec raising a new fund, or would Shen look especially for people who understand the depths of the family office world? The difficulty is getting people to lean on data, instead of brands, when it comes to backing new ventures. Woo and Shen believe that Revere’s job isn’t necessarily to give a thumbs up or thumbs down on if a certain venture fund or person is a good idea, but instead offer a whole picture on what one entity is offering in a current moment in time. That said, in a mock-up of a report, Revere showed that it rates firms using categories like “excellent” and “best in class,” a nomenclature reserved for “all-around performers who rate well across multiple categories.” Every year, the company ranks a few firms as either best in class, rising stars, or verified. “Part of the reason people love investing in venture capital is for the intangibles, right? If they just purely wanted returns, and sort of good risk-adjusted returns, there’s other asset classes,” Woo said. So far, Revere has raised $5.62 million since launching; including a May 2021 pre-seed round of $1.35 million from investors including AngelList, Twitch co-founder Kevin Lin and Blue Future Partners. It also raised a $4.27 million round from Cherubic Ventures, Overlay Capital, Benhamou Global Ventures, Oyster Ventures, MDSV, and others. Instead of trying to get rid of investor’s need to pattern match and check specific boxes, Revere wants to disrupt the industry through standardization. Let’s see if the market is ready to ask for help; and if the standard is tired enough to be disrupted, PDF style.

OpenAI will give roughly 10 AI startups $1M each and early access to its systems • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in AI, artificial intelligence, funding, OpenAI, Robotics & AI, startup, Startups, VentureNo Comments

OpenAI, the San Francisco-based lab behind AI systems like GPT-3 and DALL-E 2, today launched a new program to provide early-stage AI startups with capital and access to OpenAI tech and resources. Called Converge, the cohort will be financed by the OpenAI Startup Fund, OpenAI says. The $100 million entrepreneurial tranche was announced last May and was backed by Microsoft and other partners. The 10 or so founders chosen for Converge will receive $1 million each and admission to five weeks of office hours, workshops and events with OpenAI staff, as well as early access to OpenAI models and “programming tailored to AI companies.” “We’re excited to meet groups across all phases of the seed stage, from pre-idea solo founders to co-founding teams already working on a product,” OpenAI writes in a blog post shared with ZebethMedia ahead of today’s announcement. “Engineers, designers, researchers, and product builders … from all backgrounds, disciplines, and experience levels are encouraged to apply, and prior experience working with AI systems is not required.” The deadline to apply is November 25, but OpenAI notes that it’ll continue to evaluate applications after that date for future cohorts. When OpenAI first detailed the OpenAI Startup Fund, it said recipients of cash from the fund would receive access to Azure resources from Microsoft. It’s unclear whether the same benefit will be afforded to Converge participants; we’ve asked OpenAI to clarify. We’ve also asked OpenAI to disclose the full terms for Converge, including the equity agreement, and we’ll update this piece once we hear back. Beyond Converge, surprisingly, there aren’t many incubator programs focused exclusively on AI startups. The Allen Institute for AI has a small accelerator that launched in 2017, which provides up to a $500,000 pre-seed investment and up to $450,000 in cloud compute credits. Google Brain founder Andrew Ng heads up the AI Fund, a $175 million tranche to initiate new AI-centered businesses and companies. And Nat Friedman (formerly of GitHub) and Daniel Gross (ex-Apple) fund the AI Grant, which provides up to $250,000 for “AI-native” product startups and $250,000 in cloud credits from Azure. With Converge, OpenAI is no doubt looking to cash in on the increasingly lucrative industry that is AI. The Information reports that OpenAI — which itself is reportedly in talks to raise cash from Microsoft at a nearly $20 billion valuation — has agreed to lead financing of Descript, an AI-powered audio and video editing app, at a valuation of around $550 million. AI startup Cohere is said to be negotiating a $200 million round led by Google, while Stability AI, the company supporting the development of generative AI systems, including Stable Diffusion, recently raised $101 million. The size of the largest AI startup financing rounds doesn’t necessarily correlate with revenue, given the enormous expenses (personnel, compute, etc.) involved in developing state-of-the-art AI systems. (Training Stable Diffusion alone cost around $600,000, according to Stability AI.) But the continued willingness of investors to cut these startups massive checks — see Inflection AI‘s $225 million raise, Anthropic’s $580 million in new funding and so on — suggests that they have confidence in an eventual return on investment.

Welcome to the late-stage discount market, where everything is on sale and few folks are buying • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in cb insights, EC Newsletter, EC venture capital, startup valuations, Startups, The Exchange, Venture, venture capitalNo Comments

If you are raising money for an early-stage startup today, there’s reason to be hopeful when it comes to the price that you might be able to charge for shares in your company. The later stage your startup is, however, the worse your chances are to raise funds at a price that you like. New data from CB Insights indicates that, on a global basis, the farther along the alphabet a startup’s next funding round is, the more valuation pressure that transaction will be under from a price perspective. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. The data is surprising in how clear it is in trend terms, but not too surprising. Recall that mega-rounds, or venture capital deals worth $100 million or more, have fallen precipitously this year. While median deal size through the third quarter has been flat in the early- and mid-stage startup market, late-stage deals have gotten smaller this year. With that backdrop, falling late-stage valuations are hardly surprising. Venture investor and SaaS aficionado Jason Lemkin had this to say today: My summary of Venture Markets in Nov 2022: Series B and later even worse than looks in data: 85%+ of investing here has simply ceased[.] Lower volume implies less demand; less demand implies less competition around deal price; less competition means lower prices.

Investors are either ghosting, quiet quitting or rewriting their entire playbook • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in Equity podcast, maternity leave, Startups, Venture, venture capitalNo Comments

Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. This is our Wednesday show, where we niche down to a single topic, think about a question and unpack the rest. This week, Natasha and Alex interviewed one of their favorite reporters, Business Insider’s Melia Russell! The trio chatted through how the role of a venture capitalist is changing. That means we spoke about emerging fund managers, seasoned operators and, of course, Russell’s latest story about how some investors are re-writing the playbooks when it comes to maternity leave policies at their firms. I don’t want to tease out all the hot takes, but let’s just say that this dispatch is a tad blunt. For one, apparently, no one thinks that venture firm M&A is a thing other than us. Anyways, we think you’ll love the episode, learn something new about how venture is changing and probably have a take on whether this is natural job cycle stuff or true structural changes. We’re back Friday with our weekly roundup, which, as you can imagine, is going to be packed. Chat soon! Equity drops every Monday at 7 a.m. PT and Wednesday and Friday at 6 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. ZebethMedia also has a great show on crypto, a show that interviews founders, a show that details how our stories come together and more!

Mozilla launches $35M venture capital fund for early-stage ‘responsible’ startups • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in Firefox, Mozilla, Mozilla Ventures, Startups, VentureNo Comments

It seems that every internet company and their dog have at least one venture capital (VC) arm under their wing, with the likes of Google Ventures (now GV), Microsoft Ventures (now M12), Salesforce Ventures, Twilio Ventures, and Zoom Ventures all serving their corporate namesakes potential cash cows via hundreds of equity investments. Today, it’s Mozilla’s turn to solidify its investment endeavors via a new dedicated $35 million VC fund targeted at early-stage startups. Formally announced at Web Summit in Portugal today, Mozilla Ventures builds on other recent investments the company has made as part of its Mozilla Builders startup incubator program, though in truth Mozilla has sporadically invested in nearly 20 companies over the past decade. More recently, Mozilla joined a $900,000 pre-seed funding round into password management startup Heylogin. While Heylogin confirmed Mozilla as an investor back in September, we now know that this represented one of the first three investments that Mozilla has made from its new fund. The other two include Block Party, which raised a $4.8 million seed round in September to combat online harassment, and Secure AI Labs which is reportedly in the process of raising $9 million for a product that fosters collaboration in the medical industry while safeguarding aggregated patient data. While it’s not disclosing exactly how much it’s plowing into these companies, the triumvirate of investments gives some idea as to what Mozilla Ventures is aiming for with the new fund. It’s focusing on seed to Series A stage startups, but more specifically it says that it’s targeting what it calls “responsible” tech companies that “push the internet and the tech industry in a better direction.” But first, let’s take a quick step back and look at how we arrived at “Mozilla the VC,” from a brand that is still pretty much best known for its web browser. The story so far The Mozilla “community” emerged from Netscape back in 1998, and today it constitutes a not-for-profit entity called the Mozilla Foundation and a for-profit subsidiary called the Mozilla Corporation. Mozilla’s open source Firefox emerged as a major player in the web browsing space, taking on the (then) mighty Internet Explorer and hitting the giddy heights of a circa-30% market share around 2010. In the intervening years, it has dwindled to around 4% market share, though this still places it in the top three browsers behind Chrome and Safari. Today, Mozilla is a vocal proponent of privacy and positions itself as the antithesis of Big Tech behemoths such as Google, even though it relies substantively on the internet giant for revenue. It has also introduced a bunch of new privacy products in recent years, including a virtual private network (VPN) and an email-masking service. It has dabbled in other projects too, such as the now-defunct operating system Firefox OS. But with the Firefox web browser recently hitting version 100, it’s clear that Mozilla is still heavily reliant on its browser for income. The organization makes around $500 million annually, the lion’s share arriving via a search engine partnership with Google. Other sources of cash include subscriptions (VPN and email-masking), advertising, and donations from the public. ‘People before profits’ This all takes us to today, with Mozilla now looking to extend its rake into the world of venture capital. The new fund is being spearheaded by managing partner Mohamed Nanabhay, a South Africa-based technology and media executive and investor, who also served as a Mozilla board member until August this year. Mozilla Ventures is keen to set itself apart from the pack by stressing its focus on “putting people before profits.” In truth, there are plenty of VC funds that can easily lay claim to a similar mission, whether it’s through investing purely in climate tech or other companies working in the environmental-social-governance (ESG) realm. Mozilla, however, is addressing slightly different areas of the technological spectrum, such as privacy; “trustworthy AI”; and products that ultimately help decentralize digital power, which could be code for web3. “There are a lot of funds focused on ethical investing in areas like climate and economic justice,” Mozilla Foundation executive director Mark Surman explained to ZebethMedia. “We’ve taken a lot of inspiration from funds like these. As far as we know, Mozilla Ventures is the first focused solely on responsible internet startups. And, while some other funds do have investments in this area, the startups we met through Mozilla Builders told us that much is needed here.” Mozilla’s experimental Builders incubator program was a short-lived initiative that pretty much started and ended in 2020, though Mozilla said it culminated in more than 80 small investments. “The Builders experiment made it clear that there are founders and teams out there hungry to ‘fix the internet,’ but they need support,” Surman said. “Earlier this year, we decided that Mozilla needs to make a sustained commitment to supporting people and projects like the ones we met through Builders. Mozilla Ventures is our first step in this direction.” It’s also worth noting that the initial $35 million fund is being provided entirely by the Mozilla Foundation for now, whose funds come from sources that include donations from the public — many of whom may donate purely to support their favorite web browser. However, Firefox is technically maintained by the Mozilla Corporation, with Surman stating that all the money the Mozilla Foundation receives from donations is put entirely to fund its advocacy and philanthropy efforts, including its Privacy Not Included guide and grants given to professors that teach about responsible technology programs. “Mozilla Ventures is being funded from Mozilla’s long-term savings,” Surman said. “In simple terms, we are moving funds from our existing investment accounts into an investment vehicle focused on companies whose mission is in line with Mozilla.” Nanabhay will be the only full-time member working on Mozilla Ventures at first, supported by a team of consultants in London, Boston, and San Francisco, but the process is currently underway to recruit more heads in the U.S. and Europe to bolster the fund’s investment

Byju’s eyes $1 billion IPO for physical tutor chain Aakash • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in aakash, byju's, india, Startups, VentureNo Comments

Indian edtech giant Byju’s is engaging with bankers to put together a plan for the initial public offering of its physical tutor chain unit Aakash, which it acquired last year, a source familiar with the matter told ZebethMedia. The Bengaluru-headquartered firm is looking to raise $800 million to $1 billion in the initial public offering of Aakash at a valuation of over $3.5 billion, the source said, requesting anonymity as the details are private. The startup may file the paperwork for the IPO as early as February, the source said. The deliberations are at an early stage, so the terms of the deal may change or get completely abandoned, the source cautioned. Byju’s and its founder, Byju Raveendran, did not immediately respond to requests for comment. A plan for the IPO of Aakash, which Byju’s acquired for nearly $1 billion last year, comes as the group firm has postponed its own listing plan amid the global market downturn. Byju’s seriously explored going public earlier this year through the SPAC route at north of $40 billion valuation but changed the plan after the market dramatically reversed most of the gains from the past 13 years of the bull run. Raveendran told ZebethMedia in an earlier interview that Byju’s was watching the macro market conditions closely and will file for an IPO in nine to 12 months. “I don’t think the markets will turn this year,” he said at the time. Another reason why Byju’s is considering listing Aakash on Indian stock exchanges is its apprehension about the consumer awareness of the Indian unit in the global markets, a person familiar with the matter said. The 34-year-old Aakash runs a chain of physical coaching centres across India. Prior to the acquisition, the firm was planning to list in the country. Aakash, which has been profitable for years, is on track to clock a revenue of over $360 million in the financial year ending 2024 at a 25% margin, the person familiar with the matter said.

For immigrant founders in the UK, office hours with VCs are rocket fuel • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in Column, EC Column, EC DEI, EC Europe, investors, professional networking, Startups, United Kingdom, VentureNo Comments

Lyubov Guk is a founding partner at Blue Lake VC. She supports early-stage international founders working in the U.K. Robyn Klingler-Vidra Contributor Robyn Klingler-Vidra is associate dean of global engagement and associate professor in entrepreneurship and sustainability at King’s Business School. Juanita Gonzalez-Uribe Contributor All three of us are immigrants to the U.K. We were each greeted with the classic “catch-22” of trying to open a bank account and finding a place to live: To get a bank account, you need an address, but to rent a flat, you need a bank account. This is just one of the (very minor) points of friction immigrants face when moving to a new country. Entrepreneurs who set up a business in a new country encounter more challenges. Lyubov’s own experiences as a Ukrainian immigrant in the U.K. gave her both great empathy for the trials immigrant founders face, and the belief that immigrants often make and build world-leading businesses. Beyond personal experiences, academic research seems to point to an almost inverse relationship between the contributions immigrant founders make and early acceptance by the ecosystem. Designing an international founders open office hours pilot With personal experience as her motivation, Lyubov piloted a program that would offer a softer landing for immigrant entrepreneurs in the U.K. The pilot was an “International Founders Open Office Hours” program that would help immigrant founders boost their social networks and local know-how by meeting with VCs in the U.K. Instead of the usual pitch format, the meetings were informal conversations that aimed to help founders build up this essential — and for immigrants, missing — social capital. The program was inspired by Playfair Capital and its Female Founders Office Hours. The initial start was rocky, as it coincided with the Russian invasion of Ukraine. Lyubov and her Blue Lake partner, David Gilgur, were helping families and friends in Ukraine by day and drafting the program plan by night. Early on, there was the challenge of bringing VCs and partners on board. Blue Lake had been active for a few years but was still a new name in the investment ecosystem. Asking for investors’ time meant that we had to prove we could launch something impactful that key players would want to be a part of.

One of Canada’s biggest climate-tech backers pulls back • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in Business Development Bank of Canada, Canada, Climate, climate fund, VentureNo Comments

A prolific investor in climate-tech companies in Canada is back with a second fund for “low-carbon technologies” — only this time the firm plans to pump less money into the scene, over a longer period of time. The Business Development Bank of Canada (BDC) came out with a new, $400 million climate-tech fund on Wednesday, which it called a “renewed commitment” to help build “world-class Canadian cleantech” companies. The BDC is owned by the state and was set up to drive economic development in Canada. Its recent venture deals include joining Samsung in a round for VueReal, which makes tiny, low-energy displays. And earlier this year, BDC chipped in with Toyota to fund e-Zinc, which builds zinc-air batteries that could help utilities store renewable energy for when the sun is not shining. The BDC debuted its first climate fund in 2018, with $600 million that it invested locally over four years. The investment corporation plans to make its second, smaller fund last five years, even as climate change accelerates. Asked about the pullback, fund managing partner Susan Rohac told ZebethMedia that the firm is “sizing the offer to a more robust market with many more partners that we can work with.” According to Rohac, BDC’s first fund was as large as it was because it was made to “address the lack of risk capital” for climate and clean-tech startups in Canada. Since then, “for every $1 that [BDC] committed, $6 has been raised in additional funding from the private sector by our portfolio companies, concurrently or after we invested,” Rohac said. In other words, the firm argues its supersized first fund created “more private sector appetite,” which will apparently make up for the BDC Cleantech Practice‘s downsized second act. To date, BDC says it has funded 50 climate- and clean-tech companies via the fund, which puts it in the same camp as other busy investors in the scene, including Active Impact Investments and Sustainable Development Technology Canada (which is also backed by the Canadian government).

‘CZ’ Zhao on why Binance bet big on Twitter despite Musk’s machinations • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in Social, VentureNo Comments

It’s hard to imagine committing to invest $500 million in someone’s vision for a company, only to watch that individual almost immediately try to distance himself from it. But Changpeng “CZ”Zhao told an audience tonight at Web Summit in Lisbon that he wasn’t bothered when, after committing to invest $500 million in Elon Musk’s takeover of Twitter, Musk then tried for months to torpedo the deal. First and foremost, suggested the founder and CEO of Binance, the world’s largest cryptocurrency platform, “When we invest in a deal, we’re very comfortable if the deal goes through. We’re very comfortable if the deal doesn’t go through. We always want to get to a point where we’re in that position.” In fact, while, Zhao admitted that he was “honestly” a “little bit surprised” when the deal finally went through — Musk is “pretty hard guy for me to predict,” Zhao said with a laugh on stage — getting on board again as an investor and active user and web3 proponent was a no-brainer for “many different reasons,” he told interviewer Katie Prescott of The Times. He said, for example, that Binance wants to be “completely supportive of free speech” because Binance’s great ambition is to “increase the freedom of money” and free speech, he said, is inextricably tied to the freedom of money. Free speech is also paramount to Zhao as a founder who finds himself in the headlines and doesn’t always like what he reads. “Little guys like us,” said Zhao, whose personal fortune is estimated in the tens of billions of dollars, “have our followers. We can correct the news.” (Asked by Prescott if Zhao thought Twitter was constricted on this front previously, he said no.) Zhao also sees Twitter as an important business development tool, he suggested, calling himself an “active Twitter user” who uses the app more than he uses the Binance app. (“I don’t trade. I just store my crypto on Binance and then I use Twitter,” where the “crypto community” lives and “where politicians go.”) Naturally, however, the biggest driver is Musk himself, who Zhao said Binance “loves to support for his “different ideas.” Despite forking over a massive check to Musk, Zhao insisted that he doesn’t receive much detail about what’s happening inside Twitter HQ right now, telling Prescott that he heard of Musk’s apparent plan to charge verified Twitter users $8 per month at the same time as the rest of the world. But he said that “we’re very supportive of anything that can reduce the bots on Twitter.” Zhao further suggested that what he appreciates most is that Musk doesn’t deliberate for long. “You can see the speed of change in Twitter is much faster now. Last year, I don’t know how many new features (the company rolled out); I didn’t see that many new. But I fully expect that with Elon now in charge, the speed of new features rolling out will be much much faster.” Not all of them will stick, Zhao added. “I would actually say probably the majority of them will not stick,” he said. “But that’s how you figure out the rest of the 10% of the features that will stick; by defining a lot of new features.” As for when Zhao expects a return on his money — Musk has said he plans to take Twitter public again in a few years — he demurred, unsurprisingly. “We’re very long term investors so we anticipate to be involved in the next 10 to 50 to 100 years. We’re not bothered by short term; we don’t care about that. We care about long-term potential for the platform, and with Twitter plus Elon? Independently, they have a lot of potential, but combined, there is such high potential. Ten to 20 years from now, we’re very confident that this will be a much stronger platform than Twitter yesterday.”

Blackbird’s latest $1B AUD fund signals maturation of Australian, New Zealand venture scene • ZebethMedia

By zebethcontrolPosted on November 2, 2022Posted in Australia, Blackbird, New Zealand, Startups, VentureNo Comments

The Australian and New Zealand startup community will see a boost in funding this year. Blackbird, a VC fund based in the two south Pacific countries, on Wednesday closed a fund at over AUD $1 billion, which is about USD $640 million, which the firm says is Australia’s largest fund to date. This is Blackbird’s fifth fund, and it’s double the size of the VC’s last fund which closed in August 2020. Several institutional investors participated, including superannuation funds like AustralianSuper, Hostplus, Australia’s sovereign wealth fund, the Future Fund, New Zealand’s sovereign wealth funds and New Zealand Growth Capital Partners Elevate fund, which is a government-backed fund. A decade ago, most Australian and in particular New Zealand institutional investors didn’t want to put their money anywhere near tech startups. Their support today signals a maturation of the Australia/New Zealand venture capital space. “[Superannuation fund] capital can go anywhere. It can go into the best Silicon Valley VCs,” Sam Wong, a partner at Blackbird, told ZebethMedia. “And so the fact that they are choosing to invest their money at 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 superannuation funds to back the tech space because they have horizons in the decades and can afford to be patient. “What they really care about is high returns so people can retire in dignity,” she said. “And when you have that long-term horizon, you can seek higher return assets that don’t have liquidity profiles that, say, public markets do. And that’s exactly what we found in the Australian superannuation system — they love tech because it’s high growth, high return. It’s very long dated, and they don’t mind that it’s locked up for 10 years.” The fund is also supported by over 270 individual investors, many of whom are tech founders and operators that Blackbird backed through earlier funds, according to the firm. Those founders will support the fund both with their own capital, but also their expertise, knowledge and connections, said Wong. 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-on fund to support Blackbird portfolio companies anywhere from “Series A to the last round at Canva,” and a NZD $75 million (USD $44 million) dedicated New Zealand fund, which is also largely for pre-seed and seed stage companies. Blackbird prides itself on cutting the earliest checks, which could be anywhere from $25,000 for a small pre-seed to up to $5 million for a seed round, said Wong. The firm’s mandate is to invest in founders with an Aussie or Kiwi connection, which usually means they’re based in those countries, but often ends up extending to those who founded companies abroad. Around 40% of Blackbird’s portfolio companies are actually headquartered in the U.S., said Phoebe Harrop, a principal at Blackbird. The fund has already made 18 investments into startups in a broad range of industries from AI to manufacturing to e-commerce. Last month, Blackbird invested in Sonder, an employee and student wellbeing 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 would be up from 8.5% today, according to the Tech Council of Australia. “We’re here to change the culture of Australia and New Zealand’s ecosystems, to make a difference at a country level,” said Niki Scevak, partner at Blackbird, in a statement.