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

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 greatest Silicon Valley VCs,” Sam Wong, a partner at Blackbird, told TechCrunch. “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 businesses, an AUD $668 million (USD $472 million) follow-on fund to support Blackbird portfolio businesses 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 businesses.

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 businesses abroad. Around 40% of Blackbird’s portfolio businesses 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 businesses 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.