Australia’s Blue Sky targets $144m VC fundraise

The firm, which closed its debut fund at A$10 million in 2013, is currently investing its second A$30 million second vehicle. Blue Sky concentrates on lower risk late-stage venture and early-stage growth deals. The objective is to identify validated platforms and technologies with global reach that can be scaled up rapidly.

"We find the proportion of good quality investment opportunities is much higher at the later stage due to survival bias. But it is much harder for these companies to find more significant amounts of capital for late stage development or early expansion as not many funds are focused on the late stage," said Elaine Stead, investment director at Blue Sky Venture Capital.

The new industry-agnostic fund will deploy an average of A$18 million per investment. Last year, the firm backed e-commerce platform Shoes of Prey, online logistics start-up ParcelPoint, casual retail chain Thrive and medical device manufacturer Conventus Orthopaedics.

There has been a resurgence of interest in Australian VC in the past year. Last month, Square Peg Capital, set up by the co-founder of job search site Seek, launched a A$200 million fund backed by James Packer, super funds and other high-net-worth individuals. It follows fundraising efforts by Blackbird Ventures and Brandon Capital that both won support from LPs including superannuation funds.

Blue Sky believes its later-stage approach - the other funds are early-stage investors - meets a particular local need. A recent report by the Australian Private Equity & Venture Capital Association (AVCAL) identified an "urgent need" to address the funding gap between seed and later stage, with only 23%, or A$85 million, of total VC funding dedicated to bigger start-ups.

"It's great to see investment managers such as Blue Sky attract significant capital to develop and nurture the local VC scene and invest in later stage companies. This represents and exciting turning point in the development of the Australian innovation ecosystem," said Wyatt Roy, assistant minister for innovation, in a statement.

The Australian government this week introduced a range of measures to boost local innovation and entrepreneurship that could see A$1.1 billion committed over four years.

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• Topics
• Australasia
• Venture
• Fundraising
• Expansion
• Australia
• Venture
• Growth capital
• Blue Sky Private Equity