Blackbird closes Australia’s largest venture capital fund at $1bn

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In addition to institutional investors, the new fund was also backed by more than 270 individual investors, many of whom, according to Blackbird, were founders and technology operators.

Blackbird said it will split the fund into three separate pools, with a $284 million base fund, a $668 million follow-on fund to support existing portfolio companies, and a $75 million neo pool. -Zealand reserved for investments based in New Zealand.

Mr Baker said raising the fund was made more stressful by the global tech valuation crisis, but he had been delighted that so many of his existing investors were coming in with bigger checks.

“Existential Moment”

“For us, it’s kind of that existential moment, because we know we need to raise new money to keep the activity going, even though the market has started to decline,” he said.

“But I really think the super funds understand venture capital now very well, and they’re really thorough in their due diligence, which is very time consuming for us, but a big development for the industry.

“Our feedback has been very solid. The first fund is sitting at 35 times its capital, even after the valuation drop this year, and all of our other funds are doing well.

These valuation declines were highlighted by Canva, which remains a standout player despite recent downgrades. In July, Blackbird followed its US backers in reduce the valuation of Canva from $14.4 billion to $25.6 billion.

Despite its success in closing the new fund in a depressed market, 2022 has not been all rosy for Blackbird.

$3 billion affected

At the end of last year, he revealed to Financial analysis that its $1.3 billion invested since its inception had grown into a portfolio valued at $10 billion. The revaluation of companies in its portfolio this year, amid falling valuations of publicly traded tech stocks, has caused the value of this portfolio to drop to around $7 billion.

Asked about the likelihood of falling valuations in pending funding rounds for existing portfolio companies, Scevak said if that happens, it should be seen in the context of similar ups and downs that are happening. are produced for established listed companies, rather than being terminal for the start-ups in question.

“High-growth companies in the public markets have fallen 80%, and ultimately the valuation frameworks of the most mature and best-performing software companies are plummeting,” Scevak said.

“If a company is unable to grow in its valuation, that’s not a death knell, it’s not even something to be too depressed about. Every company in the world, from Google to Meta and any other big tech company, have valuations falling by the minute, but on a longer arc of progression, these are all footnotes in history.

“We expect the market to be tougher next year than it was this year, it’s not just going to fall back into the euphoria of 2021.”

On Canva, Mr Baker said he was confident its valuation would recover to previous highs over time, and said it proved its status as both a world-class company and a focal point for d other budding Australian tech companies to follow. .

In October, Canva announced that it had reached a historic metric of 100 million monthly active users, shortly after unveiled a major product expansion to go beyond software design to broader office productivity, competing with Microsoft 365 and Google’s Workspace suite.

“You cannot underestimate the importance of Canva and Canva leaders to the ecosystem and to Australia as a whole in nurturing the next generation of business leaders and entrepreneurs,” said Mr Baker.

“In terms of valuation, the company continues to grow beautifully, it’s generating distinctly positive cash flow…It’s growing, so we’re very strong holders of our Canva shares.”

Mr Baker said Blackbird’s latest fund is likely to have a similar lifecycle to his previous funds of two to three years, before he looks to close his next one.

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