{"id":42831,"date":"2023-10-20T15:24:05","date_gmt":"2023-10-20T15:24:05","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/new-200-million-fund-to-focus-on-later-stage-startups-startupsmart\/"},"modified":"2023-10-20T15:24:05","modified_gmt":"2023-10-20T15:24:05","slug":"new-200-million-fund-to-focus-on-later-stage-startups-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/new-200-million-fund-to-focus-on-later-stage-startups-startupsmart\/","title":{"rendered":"New $200 million fund to focus on later-stage startups – StartupSmart"},"content":{"rendered":"
Australia will soon have its first $200 million VC fund focused entirely on later-stage startup investments in an \u201cexciting turning point\u201d for the sector.<\/p>\n
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Blue Sky Venture Capital has announced it will be raising the fund to help plug the current funding gap and help founders find assistance locally without having to look overseas.<\/p>\n
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It\u2019s a big step up for the VC firm, with the new fund set to be nearly seven times bigger than its 2014 capital, but investment director Elaine Stead says it\u2019s a \u201cnatural progression\u201d of what Blue Sky has been doing across the last decade.<\/p>\n
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\u201cWe\u2019ve developed such a strong deal flow that in the last quarter alone we could have deployed over $180 million,\u201d Stead tells StartupSmart<\/i>.<\/p>\n
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\u201cThat\u2019s in deals that actually went through formal diligence that we loved and that we would have put more in to if we had the capital.<\/p>\n
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\u201cThere\u2019s a high quality of deals and a high volume, and we want to take advantage of it.\u201d<\/p>\n
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Another turning point<\/b><\/p>\n
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Blue Sky Venture Capital\u2019s 2014 fund has invested in the likes of Shoes of Prey<\/a>, THR1VE and Hatchtech, which recently exited in a deal worth nearly $280 million<\/a>.<\/p>\n <\/p>\n Two more investments are on the horizon before that fund is closed, and the firm hopes to have raised the $200 million for the next one by the second quarter of next year.<\/p>\n <\/p>\n This is another big moment for the startup ecosystem, assistant minister for innovation Wyatt Roy says.<\/p>\n <\/p>\n \u201cIt\u2019s great to see investment managers such as Blue Sky attract significant capital to develop and nurture the local VC scene and invest in later-stage companies,\u201d Roy says.<\/p>\n <\/p>\n \u201cThis represents an exciting turning point in the development of the Australian innovation ecosystem.\u201d<\/p>\n <\/p>\n Plugging the later-stage gap<\/b><\/p>\n <\/p>\n It will join three other $200 million Australian-based VC funds<\/a> \u2013 with Square Peg Capital and Blackbird Ventures recently announcing their own, and Brandon Capital closing a biomedical-focused fund earlier this year.<\/p>\n <\/p>\n But all these other large funds are focused on the early-stage of a startup\u2019s life, and that\u2019s where Blue Sky\u2019s focus will be different.<\/p>\n <\/i><\/p>\n <\/p>\n \u201cWe focus on the later-end of the VC spectrum where the quantum of capital that companies are seeking is much higher,\u201d Stead says.<\/p>\n <\/p>\n \u201cThey\u2019re much more mature and are executing on expansion and scale-up strategies.<\/p>\n <\/p>\n \u201cThe key differentiator is we are focusing on companies for which product-market fit has been established. It\u2019s really about commercial execution and expansion.\u201d<\/p>\n <\/p>\n These large later-stage funding rounds are often the time when local startups are forced to look overseas for assistance. A recent AVCAL report identified an \u201curgent\u201d need<\/a> to address the funding gap between early and later-stage, with only 23% of the country\u2019s entire VC funds dedicated to these large rounds.<\/p>\n <\/p>\n