Seed-stage venture capital firm Investible has raised $35 million for its second fund, to bolster “critical” investment into Australia’s early-stage startup ecosystem.
This is the first close of the second fund, which came in above target. All in, Investible is seeking $50 million.
Supporting Australia’s seed-stage startups is “absolutely critical”, Investible chief executive Rod Bristow tells SmartCompany — even more so as the economy recovers following the COVID-19 pandemic.
“There’s quite a lot of money flowing into all asset classes, but particularly private markets,” he explains.
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This is where investors are seeing opportunities to generate returns.
If the pipeline of new companies dries up, this will become more challenging, he notes.
In the earlier days of the pandemic, we heard a lot about the opportunities COVID-19 could bring, and the possibility that crisis breeds innovation.
Now, Bristow sees two key trends emerging. First, both large and small businesses have realised they have to innovate if they’re going to survive.
“That’s driving tailwinds behind tech investment,” he says.
But there’s also a “softer” kind of trend afoot. The pandemic got a lot of people thinking carefully about what is really important to them, Bristow suggests.
Those who may have been thinking about stepping away from corporate life and launching their passion projects finally took the plunge.
“We’re seeing lots of founders stepping away from corporates and founding these extraordinarily innovative businesses,” he says.
“That’s been fascinating to watch.”
Focus on founders
This raise represents a considerable increase on Investible’s $22.5 million first fund, which was deployed in some 36 investments, spanning nine countries and 19 sectors.
Those startups have since raised a combined $50 million in additional capital, creating about 600 jobs.
This time around, about 30% of the funding will be allocated to overseas businesses, up from 20% in the previous fund.
Investible has always been sector agnostic, and that’s set to continue with the second fund.
All Bristow is looking for is the best founders and the best tech opportunities, he explains.
The team wants to unearth strong technology solutions that are globally scalable, but in terms of the sector, “we won’t pick winners,” he says.
Where they are looking to pick winners is in the founders they back. The strength of the founder or the founding team is the most important factor, Bristow says.
Investible uses tools to benchmark the motivations of founders against the global population of entrepreneurs, to try to understand exactly what makes them tick, and why they’re the ones to make their business work.
Bristow isn’t looking to invest “in tech for tech’s sake”, he says.
“We want to be backing founders solving real world problems.”