Latest AUD $1bn Fund of Blackbird Marks a Huge Feat for VC Scene

Financing for startups in Australia and New Zealand will increase this year. Blackbird, a venture capital company located in the two South Pacific nations, closed a fund on Wednesday for over AUD $1 billion, or roughly USD $640 million. The firm claims this is the largest fund ever raised in Australia. Furthermore, this sixth fund from Blackbird is twice as big as the last one, which closed in August 2020. Superannuation funds including AustralianSuper, Hostplus, Australia's sovereign wealth fund, the Future Fund, New Zealand's sovereign wealth funds, and the government-backed New Zealand Growth Capital Partners Elevate fund were among the institutional investors that took part. [caption id="attachment_58061" align="aligncenter" width="1600"] image credit: blackbird[/caption] On the other hand, ten years ago, the majority of institutional investors in Australia and, in particular, New Zealand, didn't want their funds near tech businesses. Hence, their support today symbolizes the development of the Australian/New Zealand venture capital market. What's more Sam Wong, a partner at Blackbird, stated, "[Superannuation fund] capital can go anywhere. It can go into the best Silicon Valley VCs. 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.” Additionally, Wong asserts that superannuation funds should support the tech sector since they have long-term plans and the financial resources to be patient. [caption id="attachment_58060" align="aligncenter" width="1600"] image credit: nzherald[/caption] “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 a high growth, high return. It’s very long-dated, and they don’t mind that it’s locked up for 10 years.” Moreover, more than 270 individual investors also contributed to the fund, many of them digital entrepreneurs and founders who previously received funding from Blackbird through other funds, the company claims. According to Wong, those founders will support the fund not just with their own money but also with their skills, connections, and knowledge. More details An AUD $284 million (USD $182 million) core fund for pre-seed and seed stage Australian businesses, an AUD $668 million (USD $472 million) follow-on fund to support Blackbird portfolio companies from "Series A to the last round at Canva," and an NZD $75 million (USD $44 million) dedicated New Zealand fund, which is primarily for pre-seed and seed stage companies, make up the total AUD $1 billion. [caption id="attachment_58059" align="aligncenter" width="1600"] image credit: nzherald[/caption] According to Wong, Blackbird takes pride in writing the earliest checks, which can range in size from $25,000 for a modest pre-seed round to $5 million for a seed round. In addition, the company's mandate is to invest in entrepreneurs who have an Australian or New Zealander link, which typically means their headquarters are in those nations, but often extends to individuals who founded businesses elsewhere. According to Phoebe Harrop, a principal at Blackbird, about 40% of Blackbird's portfolio companies have headquarters in the United States. On another note, the fund already invested in 18 firms across a variety of sectors, including artificial intelligence, manufacturing, and e-commerce. Additionally, Blackbird made investments in Sonder, which focuses on student and employee welfare, and Spice AI, a platform for data and AI-driven infrastructure, last month. [caption id="attachment_58058" align="aligncenter" width="1600"] image credit: medium[/caption] According to the Tech Council of Australia, Blackbird predicted that by 2032, tech businesses will contribute 20% of Australia's GDP, up from the current 8.5%. Niki Scevak, a partner at Blackbird, remarked in a statement, "We’re here to change the culture of Australia and New Zealand’s ecosystems, to make a difference at a country level."