Venture capital firm Rampersand has announced a new $50 million startup fund that will aim to support and nurture the next generation of Australian entrepreneurs.
Rampersand managing partner Paul Naphtali says the fund will be focused on early-stage startups with impressive founders.
“We want not just a good piece of technology but a good business,” Naphtali tells StartupSmart.
“We’re backing them early and helping them reach the next level. It’s really important to get a volume of really successful entrepreneurs and backing them from almost the beginning of their journey.
“We want to support the next generation of Australian entrepreneurs and make them wildly successful.”
The firm has already closed nearly half of the fund and made its first investment, contributing to a recent $14 million funding round in PromisePay.
“We’ve got money in the bank and we’ve had our first close,” Naphtali says.
“We’re really comfortable with where we are and where we’re going.”
A diversified portfolio
Fellow Rampersand managing partner Jim Cassidy adds that the fund will be looking for early-stage startups with some provable market traction and commerciality, and it won’t zero in on any particular sector.
“There are so many diverse opportunities that exist that we wouldn’t want to particularly aim for one area of the market,” Cassidy tells StartupSmart.
“The great thing about a diverse approach is that you don’t just get diverse companies but you get diverse people as well. We want great people with large opportunities that are driving hopefully a game-changing approach to the market.
“With fund two we will follow that formula and spread the net even further.”
This focus on diversity in all its aspects is crucial to both the fund’s financial success and for the growth of the wider ecosystem, Naphtali says.
“Australia is this wonderful melting pot but there are sectors of the market that have been under-funded and under-supported,” he says.
“There aren’t many vehicles in Australia that have the appetite, capacity and capability to support this broad range of companies.
“We can understand them and add value to them. That’s relatively rare in this country.”
More than just funding
With a wealth of large VC funds being announced this year already, Naphtali and Cassidy say it’s their experience, and the background of their team, that’ll set Rampersand’s fund apart.
With the pair having experience as senior executives and investors in Silicon Valley, Europe and Israel, Rampersand wants to offer far more than just capital.
“Jim and I have been active as senior executives and investors in Silicon Valley, Europe and Israel and we’ve been involved in $10 billion of exits,” he says.
“When we came back to Australia we saw a really huge opportunity in this market to support early-stage Australian founders, not just with capital but with advice from people who have been through the journey before.
“It takes a village to raise a startup. We want to surround great founders with great advice that’s over and above the capital.
When Rampersand launched its first fund of $6 million in 2013, the Australian venture capital sector was virtually unrecognisable to what it is now, Naphtali says.
“Three years ago this was a pretty new idea,” he says.
“We were able to raise a few million dollars in a few weeks and now we’ve built a spectacular portfolio. On the back of that experience we’ve been really delighted with the level of investor support to go into another fund.
“Now there’s a much broader awareness that wealth creation in Australia is going to come from innovation. A third of our investors are successful tech entrepreneurs wanting to support the next generation and we have a bunch of people outside tech that have realised it’s critical as part of a portfolio to have innovation.
“Three years ago both of those things were less developed.”
Rampersand’s announcement continues a strong year for venture capital in Australia, with more than $100 million in planned VC unveiled already.
Most recently CapitalPitch launched its own “hybrid” $10 million fund, following on from the likes of StartMesh, Aura Group and Signal Ventures, who all announced large VC funds this year.