Blackbird builds $1 billion nest egg with record VC fund

Venture capital firm Blackbird has raised Australia’s first $1 billion VC fund, with superannuation funds once again cornerstone investors.

The announcement comes just a week after Square Peg announced it had raised $860 million for its fifth generation of funds. Combined with another $700 million raised earlier this year by Airtree. that means the country’s top three VC funds have secured more than A$2.5 billion from investors in 2022.

The new Blackbird fund consists of a $284 million core fund, $668 million in a follow-on fund and NZ$75 million dedicated to investing in New Zealand startups.

AustralianSuper and Hostplus, anchor investors in Square Peg’s latest fund, have shared the love with Blackbird too, alongside HESTA, Aware Super, Telstra Super and NGS, with the Australian and NZ sovereign wealth funds, the Future Fund,  New Zealand Growth Capital Partners Elevate fund and ACC also putting cash on the plate.

Blackbird partner Rick Baker said the fund is also supported by more than 270 individual investors, many of whom are tech founders and operators.

“In a great circle of life moment, we’re proud to welcome some of the founders we backed in earlier funds as investors in this new fund,” he said.

“Our mission has been to help catalyse the startup community in Australia and New Zealand and this is a wonderful example of how our startup ecosystem is maturing and founders are investing back into the community.”

Having had its first close in May, the new fund has already made 18 investments into startups from AI to manufacturing to e-commerce, including employee and student wellbeing company Sonder and data and AI-driven infrastructure platform Spice AI.

“Our investment approach isn’t changing, we are still investing at the earliest stages and the majority of our first investments are made before there is revenue,” he said.

“This new fund gives us the privilege to invest in even more founders from the beginning, to give them the first capital they need to get started and then hopefully at every stage that follows.”

His fellow partner and cofounder Niki Scevak said they believe within the next 10 years, tech companies will contribute 20% of Australia’s GDP.

“The Aussie tech sector’s economic contribution has increased 79% since 2016, and our 2.2% share of unicorn companies well exceeds our 1.6% of global GDP,” he said.

“In 2032, we believe Australia and New Zealand’s five most valuable companies will be technology companies, and that the direct and indirect contribution of the technology sector will be more than $300B – bigger than mining, manufacturing or construction.”

New Zealand-based partner Samantha Wong said around 6% of people online globally now interact with ANZ tech companies (most recently Blackbird-backed Canva announced it has 100 million users a month).

“Over the past decade, we have seen generational companies forming from across Australia and New Zealand – companies that are now used by 1 in 17 people who access the internet, that have punched above their weight on the world stage, and that employ thousands of Australians and New Zealanders,” Wong said .

“In the next decade, employees will take their experiences from these companies and start the next generation of companies that follow, and Blackbird will be there to partner with them.”