Venture capital firm King River Capital says it has completed the first close of its second fund (KRC Fund 2) with US$95 million (A$128m) committed.
The VC says backers in its second fund include tech entrepreneurs and execs from leading local tech companies such as Xero and AfterPay, as well as family offices such as Ariadne Australia, Belfer Management and Marinya Capital. The firm is expecting full participation from existing Fund 1 investors in the new fund.
The debut fund, which launched in March 2019 with initial investments in FinClear and Cover Genius, has also just had its first exist with Sentropy Technologies, which helps protect digital communities from abuse and harassment, planning to merge with communication service Discord. King River led Sentropy’s Series A capital raise in November 2019.
The first fund backed companies spanning sectors such as fintech, digital health, logistics, industrial automation, gaming and enterprise software, including courier business Sendle, customer data platform Lexer and digital weight loss coach Lark.
KRC co-founder Zeb Rice said Fund 2 will continue the firm’s strategy of working closely with entrepreneurs and management to build innovative, iconic technology companies in the US and Australia.
“King River Capital’s ability to provide our portfolio companies with a bridge to high quality networks in Silicon Valley and key global markets has continued to be a key differentiator for us, not only for the founders we work with, but also for our investors,” he said
“We are delighted to have had strong support from our existing investor base and are delighted to also welcome new investors into the fund.”
KRC primarily makes early to growth stage minority equity investments in the software sector.
The first investment from the new fund has just been made, with King River chipping into a US$50 million (A$68m) series C round for California-based blockchain-enabled B2B payment network Paystand. The fintech automates the entire cash lifecycle to offer businesses cashless, fee-less, real-time payments.
The VC has offices in Sydney’s Surry Hills, San Francisco and Santa Monica. The firm’s three partners are former Goldman Sachs investment banker Chris Barter, Zeb Rice and Megan Guy. The trio have a legacy portfolio of more than 50 companies across multiple markets.
Barter said Sydney is “fast becoming the Palo Alto of Asia”.
“We are currently witnessing a once in a generation moment of world-leading tech innovation emanating from Australia,” he said.
“The flywheel moment has arrived with the plethora of capital, engineering talent, and successful exits embedded in a vibrant ecosystem.”