Main Sequence, CSIRO’s deep-tech focused venture capital firm, has closed its second funding round, scoring $250 million for investment into startups tackling some of the world’s biggest challenges.
And, while the funding will continue to focus on commercialising research and funding high-growth potential startups, the team is also going to be taking a problem-first approach, and creating businesses from scratch.
Breaking down the barriers
Main Sequence was established to invest in tech that solves issues facing the whole of humanity.
Those issues include feeding a growing global population; democratising healthcare; ‘bridging the gap’ to space; and modernising industries, all with focus on commercialising science and research developments.
The fund’s portfolio companies include the likes of satellite IoT startup Myriota, quantum computing business Q-CTRL, autonomous vehicle tech company Baraja and rocket tech venture Gilmour Space.
Speaking to SmartCompany, Main Sequence partner Mike Zimmerman says the current global environment has led to more recognition of the opportunity for science and research to have an impact on some of the challenges facing humanity.
“It feels like a very unique time when you can actually marry impact and commercial opportunity,” he explains.
That’s led to investor interest, with the new fund attracting support from both existing and new backers. But it’s also sparked an increase of founders launching businesses with purpose at their hearts.
At the same time, part of Main Sequence’s purpose is around breaking down the barriers between the science and research going on in Australian labs and universities and commercial success.
With the firm able to double down on its goals and invest in more growth businesses, Zimmerman hopes to double down on this, too.
The idea is to deliver a better return on investment for the Aussie research ecosystem, he explains.
Increasingly, the research industry is actively looking for routes to commercialisation, he adds.
“We want to be a catalyst for that.”
Where is the money headed?
This fund will focus on continuing the investment thesis, but with a couple of enhancements, Zimmerman explains.
First, the team is honing in on a growing opportunity in decarbonisation technology— that is, solutions that remove carbon from the atmosphere.
“That has been driven really by governments, corporations and investors all aligning to demand solutions to climate change,” he notes.
Indeed, just last week, Elon Musk launched the XPRIZE Carbon Removal competition, offering US$100 million in prize money for startups doing just that.
The other thing that is of increasing interest to Main Sequence is what Zimerman calls “venture science”.
This is a strategy the fund established with its investment in plant-based meats business v2food, which was created by the venture firm and CSIRO, who appointed Nick Hazell as founder and chief executive. v2food also received backing from Hungry Jack’s boss Jack Cowin.
It was a collaboration between the research industry, the investment fund, the right founder and a strong industry partner, Zimmerman explains. And it’s been wildly successful.
“We start with the problem,” he says.
“Then Main Sequence will pull together the opportunity, and start the company from scratch with all those elements.”
In fact, the second fund is already replicating the model, with announcements expected soon.
Eventually, Zimmerman anticipates that about 20% of the capital distributed by this fund will go to businesses created in this way.
And, while he admits replicating the success of v2food may be easier said than done, Australia has the research capability in various areas that align with the challenges it is striving to address.
We also have industry partners who are “hungry for the solutions”.