Five things one of Australia’s VC firms says it’s looking for in startups
Tuesday, January 23, 2018/
With a number of investments in prominent Aussie startups such as Spaceship, Sendle, Expert360, and Mentorloop, Australian venture capital fund Rampersand has already made a name for itself in the local startup scene.
After launching a brand new $50 million startup investing fund, founders and managing partners Paul Naphtali and Jim Cassidy told StartupSmart in 2016 the fund was keen on early-stage startups with strong commerciality from all sectors.
Two years on, the VC fund still labels itself “unapologetically broad” in its approach, but Naphtali highlighted 10 key areas and themes Rampersand is focused on heading into 2018 via a blog post, while noting that strong founding teams are still the fund’s bread and butter.
“We are unapologetically broad in our focus, but one thing ties all the companies together — we back outstanding and ambitious teams solving genuine problems that enhance the way we, as a society live and work,” he wrote.
StartupSmart has picked out five of Naphtali’s 10 areas to help startup founders get an idea of what Australian venture capitalists are looking for.
1. Communication and collaboration
“We’ve never lived in a noisier time,” writes Naphtali.
He’s not wrong. Notwithstanding the wider political and social news streams, there’s a hell of a lot happening in the world of innovation and technology, even in the (relatively) small Australian scene.
This is why Rampersand says it is focused on startups offering enhancements to how “people, organisations and machines” interact and communicate.
“We’re very interested in anything that makes communications easier between people, between people and machines/software, as well as enabling different softwares and machines communicate more effectively,” he writes
2. Logistics and transportation
Despite the ever-interconnectedness of the internet, physical goods still need to be moved around the world (unless 3D printing REALLY takes off). In an expansive landscape such as Australia, this becomes doubly important, and major retailers have only recently begun to offer same day or next day delivery in major cities.
Rampersand believes the logistics and transport industries are ripe for a major “shake up”, and have already backed a company operating in the space, Sendle.
“This space in particular poses big questions about what the future of human life looks and feels like. How cities will look, how we move around, what impact drones and autonomous vehicles will have (on transport and life), how infrastructure will need to change and what new approaches to it could produce,” they say.
3. Trust and fidelity
Touching on the burgeoning crypto and blockchain space, Rampersand believes startups and platforms that enhance trust will be a “major new frontier”. Numerous blockchain tech startups in Australia have seen success over the past six months, some through massive initial coin offerings and others through partnerships and acquisitions.
“Decentralisation and distributed ledgers are relatively new, and already generating a lot of interest in how they could transform trust and fidelity,” Naphtali writes.
“We’re particularly interested in startups that are exploring how tech could enable these fundamental human values, whether it’s through confirming providence, enabling verification or validation or identity management.”
4. The picks and shovels
It’s not just the end product that Rampersand is keen on, but the tools and services that help businesses create and build those products. Things that enable people to build “quickly, efficiently, accurately, [and] intelligently”.
“We’re in the middle of a human capacity revolution, powered by internet-enabled technologies, its scope unseen since humans became unique in our ability to store information outside of our bodies,” he writes.
“Over the next ten years we’re going to encounter an already rising wave of unprecedented changes. We’re looking to back the companies that will be at the front of this, either directly or by enabling it to happen by building the infrastructure, networks or communications tools to make it work.”
Finally, Naphtali touches on a consistent issue in the broader tech space — diversity and inclusion — which Rampersand believes must be addressed if the startup world (and humanity in general) is to reach its “full potential”.
While the company put a focus on funding more startups founded by women in 2017, this year it’s continuing that focus while also acknowledging that diversity and inclusion goes beyond just gender.
“This year we’ve made a commitment to seeking out and amplifying the companies that come to us that aren’t launched by straight white guys,” Naphtali writes.
“We’re working hard to ensure we’re as open and inclusive as possible to people from every gender, cultural background, class, able-bodied or those with disability, and sexuality.”