AirTree dangles new A$275m fund in front of Aussie, Kiwi tech startups

L-R: AirTree Ventures partners Craig Blair, James Cameron, Helen Norton, Daniel Petre and John Henderson. Photo / Supplied.

AirTree Ventures says it has raised A$275m for a new fund to "double down on early
stage Kiwi and Australian technology startups."

The Sydney-based venture capital outfit raised its first A$60m fund in 2014, and followed up with a A$250m effort in 2016.

Along the way it has invested in a raft of Aussie startups including fin-tech highflyer Athena, online learning platform A Cloud Guru, and the red-hot Canva - a maker of design tools for social media posts that last week raised A$125m fresh capital at A$4.66 billion valuation - or nearly 19x the breakeven startup's revenue.

AirTree has also invested in three techs with Kiwi links: Auckland-based Joyous, Thematic (a Kiwi-American company incorporated in Delaware) and 90 Seconds (now based in Singapore).

AirTree invested along with Sam Morgan and Icehouse as Joyous, a maker of HR software, raised $1.2m last year.

It also participated in a $1.75m raise by Thematic, which aims to take the legwork out of analysing survey data, in 2017.

And it was one of a number of investors who backed an $11m raise in 2016 for 90 Seconds, which runs a cloud platform for marketing videos and which at one point was seen as an investment hope for Sky (Sky ditched its stake last year).

AirTree said its third fund, backed by six institution investors including three Australian superannuation funds, was heavily oversubscribed but deliberately constrained to A$275m - putting it a tier below the likes of Telstra Ventures (A$675m) and the latest Square Peg Capital fund A$340m, though ahead of rival Blackbird Ventures' latest effort A$225m).

"Constraint imposes discipline and we felt it was the right thing for our investors to maintain discipline and a consistent fund size across vintages," AirTree partner John Henderson said.

Although AirTree's investments on this side of Tasman have so far been restricted to Joyous, Thematic and 90 Seconds, Henderson offered broad enthusiasm for Kiwi startups; performance over the past half decade.

"We continue to be enamoured by the unique qualities founders here bring to the table - a real Kiwi ingenuity paired with an understated drive," he said.

"This has resulted in several successful New Zealand companies tackling some of the biggest problems globally in fields that have nothing in common from space access with RocketLab to sustainable footwear with AllBirds to emission reductions with Lanzatech.

"We remain very focused on supporting Kiwi entrepreneurs and are excited to partner with many more."

Joyous co-founder Mike Carden said: "We actively chose AirTree after discussions with all
the usual suspects. Why? They have capital and relationships that can help us well beyond the current round. When we've really needed them over the last 18 months they've leaned in to help instinctively."