CSIRO’s VC arm, Main Sequence Ventures, has rounded up several high profile institutional investors for a $450 million first close of its third fund, as the six-year-old deep tech investment fund notches up $1 billion in funds under management.
A range of large institutional funds, wealth groups and top tier climate investors backed the third fund, including Hostplus, LGT Crestone, Morgan Stanley Wealth Management, NGS Super, Australian Ethical Investment, Daiwa Securities Group and The Grantham Foundation.
The fund also includes the first half of a $150 million CSIRO investment announced as stage three of the federal government’s Australia’s Economic Accelerator program. Main Sequence has been charged with backing and helping build companies that will diversify and transform Australia’s industry and economy.
The original $240 million fund was raised in 2018, followed by a second $330 million fund in 2021. They’ve invested in 51 startups.
Fund 3 has already made two yet-to-be disclosed investments.
Main Sequence partner Mike Zimmerman said deep tech startups backed by the fund have created more than 2,100 new jobs and now have a combined market value of more than $6.8 billion.
“We embark on an extraordinary journey with this fund, guided by two key imperatives,” he said.
“First, decarbonisation—we want to ensure more translation of climate research into the solutions urgently needed to address our environmental impact. Alongside this, we are advancing critical technologies central to Australia’s national interest including cybersecurity to protect citizens and infrastructure, quantum computing to unlock new possibilities, and advanced semiconductor technology to fuel innovation.”
Zimmerman said their focus remains on “big, global challenges that need scientific backing, patient capital and long-term vision to solve” with what’s often referred to as “patient capital” prepared to wait longer term for a return on investment.
“The community we have created around this mission cares deeply about finding and scaling solutions to planetary problems like decarbonisation, feeding a growing population and enabling the next intelligence leap,” he said.
“Thanks to their support, we have the flexibility and fortitude to back and build breakthrough companies grounded in research, and help them actualise their impact for decades to come.”
Main Sequence has developed what it calls a ‘Venture Science’ model of investment.
Partner Gabrielle Munzer said that approach pairs deep scientific knowledge with the industry expertise and capital funding required to build entire industries and ecosystems around solving global-scale challenges.
“Our last fund saw the launch of five Venture Science startups— Endua, Eden Brew, Quasar Sat, Cauldron, and Samsara Eco,” she said.
“We are keeping up this momentum with Fund 3, pioneering new frontiers in biotechnology and plan to continue co-founding new companies at the bleeding edge of exciting advances in food and fibres.
The third fund is expected to make around 25 pre-seed and Series B investments, north of $100,000 each.
“We are continuing to harness the forces of entrepreneurship and research to address the ‘Valley of Death’,” Munzer said.
“We see incredible promise in pre-seed investments and our involvement with Australia’s Economic Accelerator, CSIRO’s ON Accelerator and University accelerator programs like UNSW Founders’ SynBio 10x program means we can deepen our focus on unearthing cutting-edge ideas.”
Susumu Handa, CEO of Daiwa Capital Markets Australia, said the investment bank was excited to be the first Japanese investor in the fund.
“Through the collaboration with Main Sequence, we are confident to be a bridge between two countries’ startup ecosystems to leverage our bilateral relationships for creating shared values,” he said.
“We can’t wait to work with partners who have passions for global challenges like decarbonisation, food, healthcare, space, and more.”