Rampersand’s Paul Naphtali reviews 2022 and what lies ahead

2022 was a tough year for many, but in tough times our true characters are revealed.

I was inspired by Ben Armstrong’s post to reflect on and celebrate the growth and collaborative nature of startup Aus/NZ, especially what I’ve seen last year.

Australia is the lucky country, and our luck hasn’t run out.

For the first time in a generation (or ever), we have a growing community of highly ambitious, world-class founders together with a genuine venture capital industry with risk appetite and dry powder, a culture that now views startups as commercially and socially acceptable, and a really strong culture of capital efficiency and the ability to survive and thrive in capital-constrained environments.

Founders in Aus/NZ have access to high-quality venture funds and investors who (generally) genuinely care for the entrepreneurs they back and their long-term success and wellbeing.

I’m not saying things are perfect. There’s plenty more to be done here, but the trajectory of the early tech startup ecosystem is promising, and we have much to celebrate.

Last year Rampersand co-invested with 20+ Australian investors (plus a plethora of internationals).

We’ve had two investments we’re trying to close over the Summer break and in 2022 added six new companies and seven follow-on investments to the Rampersand portfolio.

We also had the opportunity to collaborate with 100+ funds via the Giant Warm Intro, which facilitated 200+ under-represented founder intros to the most active investors in Aus/NZ. To see the ecosystem come together for the greater good reinforces our optimism for the future of startup funding in the region.

In times like this, community and connections are crucial. For Rampersand, the collective and individual wisdom and experience in our network are critical to our success. The founders we back are so driven and inspiring, and it’s a genuine pleasure to partner with them all. And, of course, like any good partnership, it endures through good times and bad.

Rampersand started investing in and supporting startups at a time when very few people in Australia were doing it. We believed in the power of entrepreneurs and the potential for Australia to be a breeding ground of innovation. Since we started Rampersand, we have focused on our three foundational pillars: founders as the heroes upon whom all success relies, building a sustainable and inclusive ecosystem, and delivering returns to our investors.

Core to this was ensuring alignment between our investors, the founders that we back and ourselves as the manager. We focused on backing inspiring, visionary and execution-focused founders and giving them more than just capital. We believed in sharing our network, experience, insights, battle scars, deep and passionate belief and commitment to solving novel problems, and doing all we can to support the companies to Series A and beyond.

This has seen Rampersand consistently back 4–6 companies a year, each done with care and conviction. And everyone knows if a founder gets backing from Rampersand, it’s because we have a belief (that we are prepared to fight for) that the founding team has the capability and ambition to build a meaningful company, solving a problem they — and we — care deeply about.

Of course, as is the nature of early technology investing, we haven’t always got it right, but we’ve never gone down without a fight.

As the markets change, we will also make changes, but we will continue to do things in a Rampersand way: by being judicious, patient, commercial, and bold. For our new fund, the Future Tech Fund, we have core focus areas.

These include business software and automation, data-driven intelligence and disruptive digital marketplaces. We also invest in an area we call emerging frontiers, which is an opportunity for our investment team to constantly explore new technology. These frontiers are endless, and as a seed fund, we always retain curiosity and commitment to backing founders who are relentlessly solving big problems.

Our fund and team are structured to invest in the seed and pre-seed rounds. We keep investing in those founders that command further investment, either on our own or alongside leading Australian and international funds. We typically reserve 40–50% of a fund for follow-ons and have 150+ engaged and influential investors who often co-invest with the fund.

Over time, the Rampersand portfolio has created thousands of jobs and billions of dollars of value, and all have adapted to the new market with incredible creativity and resilience. I am in awe of the entrepreneurial spirit and how change creates opportunity, an ongoing reminder of why we started Rampersand in the first place.

This year will be different again, no doubt in ways none of us can predict right now. We’re seeing the cost of talent come down as availability goes up.

The number of new startups in Australia and New Zealand is growing exponentially. The adoption of tech, and particularly software, is still growing.

We will continue to explore new markets, technologies, structures, and frontiers. We will continue to open the VC ecosystem to emerging founders, from all backgrounds, through The Giant Warm Intro.

Looking to the year ahead, we will continue to work as a team to invest in the best and brightest ideas in Australia early on. We will continue to support founders on their journey, and we will continue to support the growing ANZ startup ecosystem.