The Australian and New Zealand startup community is poised to receive a significant boost in funding this year, thanks to the closure of Blackbird’s fifth fund at over AUD $1 billion (approximately USD $640 million). This represents Australia’s largest venture capital fund to date, and it is double the size of the VC’s last fund, which closed in August 2020.
Institutional Investors Backing Local Startups
The success of Blackbird’s fund can be attributed to the support of several institutional investors, including superannuation funds like AustralianSuper, Hostplus, and Australia’s sovereign wealth fund, the Future Fund. New Zealand’s sovereign wealth fund has also invested in the fund, as well as New Zealand Growth Capital Partners Elevate fund, a government-backed fund.
This influx of capital from institutional investors signals a maturation of the Australia/New Zealand venture capital space. As Sam Wong, a partner at Blackbird, explained to TechCrunch: "[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."
Long-Term Horizons and High Returns
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."
Sectors Where New Zealand Startups Are Poised to Win
The fund is also supported by over 270 individual investors, many of whom are tech founders and operators that Blackbird backed through earlier funds. These founders will support the fund both with their own capital, but also their expertise, knowledge, and connections, said Wong.
Three Separate Vehicles for Investment
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 $364 million (USD $231 million) growth stage fund for Australian startups
- A NZD $150 million (approximately USD $90 million) vehicle for New Zealand startups
What This Means for the Startup Community
The closure of Blackbird’s fund is a significant boost to the Australian and New Zealand startup community. With more capital available for investment, local startups will have greater access to funding and resources to help them grow and scale.
This development also underscores the growing importance of the Asia-Pacific region in the global startup ecosystem. As Wong noted, "We believe that the Asian market is a huge opportunity for us, and we’re excited to be investing in some amazing companies from this region."
The Future of Venture Capital in Australia and New Zealand
The success of Blackbird’s fund sets a new benchmark for venture capital investments in Australia and New Zealand. As the startup community continues to grow and mature, it is likely that more institutional investors will follow suit and back local startups.
This development bodes well for the future of venture capital in the region. With more capital available for investment, local startups will have greater access to funding and resources to help them grow and scale.
In conclusion, the closure of Blackbird’s fund represents a significant milestone for the Australian and New Zealand startup community. With more capital available for investment, local startups will have greater access to funding and resources to help them grow and scale. This development underscores the growing importance of the Asia-Pacific region in the global startup ecosystem.