Sydney VC OIF Ventures bags $140 million for its third fund

Investors in OIF Ventures have given the Sydney VC a ringing endorsement pouring another $140 million into its third fund – $40 million more than the original plan.

A majority of Fund III’s capital came from existing investors in OIF Ventures Fund I and Fund II, which includes ASX-listed company execs, family offices and high net worth individuals, as well as portfolio company founders OIF Ventures have previously backed.

The raise comes as monthly data on Australian VC investment for August was down nearly half on 12 months ago.

The Cut Through Venture recorded 32 deals worth a combined $223.7 million for, down 49% on August 2021, following on from a similar drop in June and July.

While early stage raises remain strong, a lack of big ticket late stage investments compared to last year is responsible for the drop 12 months on. Notably, leading VCs AirTree and Square Peg cut no deals in August, while Blackbird’s only investment was backing construction software startup Sitemate’s $5.2 million raise.

OIF Ventures partner Jerry Stesel a decade-long bull market may be coming to an end but “we still firmly believe in the enormous opportunity ahead for the technology industry” in the years ahead.

“We are excited to be able to continue backing exceptional founders building this future and our new fund allows us to do just that,” he said.

“We have designed our fund and fund size around a very strong investor base of value-adding LPs who can help super charge the founders and businesses we partner with so that we can focus on the founders that we back and give them the attention they deserve.”

The investment firm backs tech startups at the Seed to Series A stages, and Stesel flagged the VC’s success in helping portfolio companies to crack the US market and specifically, and raise capital with US venture firms.

IOF recently had exits from XM Cyber and Instaclustr, as well as partial exits in Assignar and EFTsure, delivering an IRR of 45% in Fund I and 89% in Fund II on a net basis to investors.

Partner Laurence Schwartz said that based on the total capital deployed into these investments, the exits returned a gross multiple money return of 10.7x, and 3x of the entirety of Fund I net of all fees.

“When you look back on venture capital firm vintages post the dot com crash and the GFC, some of the most successful businesses and venture funds were launched in those periods,” he said.

“We’re long-term partners so despite the current challenging macro-economic environment we’re confident that great businesses will continue to be launched by exceptional founders and that OIF Ventures will be in their corner.”

Swartz said OIF continues to see strong pipeline activity with an average of 20-30 opportunities a week.

Other OIF investments include software companies such as Go1, Kasada, Clear Dynamics, Advanced Navigation, Enboarder, Bridgit and Mastt.

OIF Ventures is registered as an Early Stage Venture Capital Limited Partnership with Innovation Australia.