Venture capital: Blackbird raising at least $80m for new NZ fund

Despite growing competition for investors’ attention as interest rates climb, 2022 is already shaping up to be another boom year for the local venture capital scene.

The sector has been bolstered by newcomers NZVC, headed
by Ukrainian-in-Queenstown Mark Pavlyukovskyy, which is raising $20m; Derek Handley’s new climate fund, which has raised $44m; and Alt Ventures, a new fund targeted at the gaming sector. Established players like Movac, Icehouse and the prolific Peter Beck and Sir Stephen Tindall are also making fresh investments.

Now Australasia’s largest venture capital firm, Blackbird Ventures, is raising between NZ$100m and $150m to invest in Kiwi startups – as part of a broader A$1 billion raise, according to a report across the Tasman. The firm’s NZ principal Phoebe Harrop confirmed to the Herald that a A$1b raise was under way with a dedicated Blackbird Aotearoa fund of “at least $80m”.

There would also be potential for NZ investments from a follow-up A$700m fund that Blackbird plans this year, Harrop said.

Blackbird, which opened an Auckland office in 2019, headed by general partner Samantha Wong, has already made a number of investments on this side of the Tasman – including AskNicely, AO Air, chicken-free chicken-maker Sunfed, Multitudes, FirstAML, Mint Innovation, electric ferry maker Seachange, Partley, smart cow outfit Halter and “microwaving metal” startup Foundry Lab (the latter three were also backed by Beck, among others).

Its first dedicated NZ fund ran to $59m, including a $21.5m contribution from the Crown-backed NZ Growth Capital Partners.

Now, according to the AFR, Blackbird has sent documents to fund managers and high net-worth individuals outlining plans to raise A$1b this year across three new funds, including a A$200-$300m dedicated Australian fund and the aforementioned NZ$100-$150m dedicated NZ fund.

For context, the firm – founded in 2012 and best-known for its early investment in Canva – has raised A$1.2b until now.

Six of the companies it had invested in had been valued at more than A$1b: Canva, Culture Amp, Safety Culture, PsiQuantum, Redbubble and Zoox. A quarter had been valued at over A$100m, the investor deck said.

Blackbird would continue to invest in very early-stage companies, with potential follow-up investments through to Series F.

“For the first five years of Blackbird’s existence we were focused on the Australian market,” Wong said. “Within 18 months of making our first investment in a New Zealand start-up in 2018, around a third of the meetings our partners were taking were with Kiwi founders.

“Looking into the growth in demand from New Zealand, we realised we’d seen this pattern before in Australia, with a relative shortage of early-stage venture capital, a crop of successful start-ups like Xero, Vend and RocketLab spinning off the next generation of founders, and the opportunity to better connect founders to other founders.

“Given the New Zealand fund is already outperforming the initial Australian fund at the same stage, we see enormous potential for the next generation of local start-ups to become some of the largest companies in the New Zealand economy – and from there, take on the world.”

Tesla chair onboard

With the new raise, Tesla’s Sydney-based chair, Robyn Denholm – last seen on our shores, virtually, lobbying Apec governments to coinvest in lithium mines – has joined as an operating partner.

Denholm joins a senior investment team that already includes Wong, founders Rick Baker and Niki Scevak, partners Nick Crocker and Alex Apoifis, and billionaire Atlassian co-founder Mike Cannon-Brookes.

Aussie PE takes majority stake in Auckland firm

Meanwhile, Australian private equity firm Advent Partners has taken a 55 per cent stake in Auckland-based Integrated Control Technology (ICT) for an undisclosed sum.

The Albany-based ICT makes a single system for managing building access, intruder detection and building automation.

ICT founders Hayden and Rachael Burr have retained the balance of the shares and will continue to run the business.

ICT is Advent’s third investment in a New Zealand-based company in the past two years after SaaS business Medtech Global and trade revenue management software company Flintfox.

Advent typically takes stakes in companies worth up to $150m, targeting those, like ICT, that are chasing global growth.