News & Analysis

Alchemy Ventures launches Australia's newest $200 million fund

- July 6, 2016 2 MIN READ

After years where the prevailing thought around the state of Australia’s venture capital landscape was that it was too dry, the conversation has over the last few months turned to the question of over-saturation as new fund after new fund has launched. The debate will likely surge again now, with the AFR reporting that Australia is getting another $200 million fund, Alchemy Ventures.

A new Early Stage Venture Capital Limited Partnership (ESVCLP), the fund has been launched by cofounders Darren Patterson, CEO and cofounder of property investment platform BrickX and executive director of Blaze International, and Mathew Walker, currently managing director of Corizon Limited and chairman of Star Striker Limited.

It will focus on early to later stage mining technologies, fintech, agritech, and consumer technology startups from across Australia and the Asia Pacific that have the ability to scale globally, with 20 percent of its investments to come from outside Australia.

Walker told the AFR, “We are broadening our horizons not just to focus on tech startups but on agritech and also a lot of opportunities in the technology metals space, lithium, cobalt, graphite, anything involved in the production of a Tesla. We believe our founders have the networks in both the east and west states.”

The fund states it expects that 60 to 90 percent of its investments will be in the early expansion stage of development, with 10 to 40 percent in the earlier stages, providing a balance of risk and reward for investors. It will invest between $100,000 to $5 million.

Alchemy is, of course, just the latest in a long line of funds to launch over the last 12 months, with a rush coming this year. It follows the launch of Rampersand’s new $50 million fund last month, and that of Start Mesh’s $20 million fund and Aura Group’s $30 million effort in May.

Sydney fintech startup CapitalPitch also announced it was raising a $10 million fund through which it would co-invest in startups that went through its program, while through its new $10 million fund Signal Ventures will look to invest in early stage companies.

With Australia’s venture capital landscape now flush with well over $1 billion in funds, the rush has come as conditions for investors continue to improve, with the tax incentives for early stage startups cited by both Aura Group and Start Mesh as a significant contributing factor in the launch of their VC efforts.

Joining Alchemy Ventures in the $200 million club are Blackbird Ventures, Square Peg Capital, and Brandon Capital, which is dedicating its $200 million Medical Research Commercialisation Fund to healthtech.

Image: Darren Patterson.