Australian VC Square Peg Capital has raised US$550 million (A$860m) for its fifth fund, which it plans to use to continue backing its existing portfolio companies in later stage raises.
The new fund takes total capital Square Peg has raised in a decade to more than US$1.6 billion (A$2.5bn) using the funds to back companies such as fintech unicorns Airwallex, Athena and Stripe, Canva, Deputy, Prospa and Zero Co.
Square Peg has invested in more than 60 startups and has already returned more that US$580m (A$905m) to investors across 11 exits.
The latest fund – split into two, called Fund 4 and Opportunities Fund 2 – was raised from a combination of returning and new investors, with superannuation fund Hostplus, Square Peg’s first institutional investor, contributing for the fourth time, chipping into fund 5 alongside existing backers AustralianSuper and Roc Partners, as well as several new institutional investors.
“The capital raised will be deployed across two strategies, (1) our core venture fund Square Peg Fund 4 which typically invests in early stage companies from Seed to Series B, and (2) our follow-on fund Opportunities Fund 2, which typically invests in later stage rounds of our emerging winners, once we have utilised available venture funds,” Square Peg said in a blog post announcing the success of its new fund.
“We have already made a handful of exciting new and follow-on investments out of our new funds, including welcoming Kula and Supabase to the Square Peg family, and continuing to back the team at Airwallex, one of Australia’s highest valued private tech companies.”
The VC said raising its fifth generation fund came at a time of “significant global economic uncertainty” but they remain “as excited as we have ever been about our opportunity set and believe the coming years will be an incredibly attractive time to be deploying in private tech markets”.
While there have been concerns about access to capital drying up for startup founders, it’s been a big year for Australia’s leading VCs, with Airtree Ventures raising A$700 million , having secured the investment commitments in just three months, to invest via three funds: for seed rounds, Web3 and subsequent rounds on growth startups.
Blackbird has also been working on building a $1 billion fifth fund, but nearly 12 months after first reveal the plan, has yet to announced its finalisation.