Australia's Hostplus commits $65m to seed investor Artesian

Artesian started out in 2004 as a manager of fixed income funds focusing on corporate bonds. Four years later it entered the early-stage VC investment space in Australia and China. The firm now operates a range of venture funds, an equity crowdfunding platform, and a vehicle that leverages the significant investor visa program, whereby overseas business people can become eligible for permanent residency in Australia if they commit a certain amount of capital to a local venture or growth equity fund.

Artesian pre-screens more than 2,000 start-ups each year, selecting the top 5-10% to participate in its accelerator programs. It partners with accelerators, incubators, university programs and angel groups such as Sydney Angels, BlueChilli, iAccelerate (UoW), Slingshot, ilab (UoQ), SproutX and Energylab. The firm has the right to invest in every pre-screened start-up and pro rata rights for subsequent rounds that typically feature angel, corporate and larger venture capital investors.

As part of the agreement with Hostplus, the superannuation fund will also partner with Artesian in identifying and investing in start-ups based in China.

“There are now more than 10,000 startups being formed in Australia over a five-year period. The challenge for VCs, corporate investors and acquirers, and other later stage institutional investors is that 90% of the 10,000 startups being formed are uninvestable and to be avoided. It is difficult for traditional VCs and other late stage investors to scale their normal deep-dive due diligence processes across so many ventures at this early stage,” Jeremy Colless, managing partner at Artesian, said in a statement.

Australia’s start-up ecosystem has seen a surge in activity at all levels in recent years, from seed funding through institutional venture capital. Between 2012 and 2016, VC investment came to $1.4 billion, up 63% on the previous five years, according to AVCJ Research. Meanwhile, in 2016 alone, venture fundraising reached a record high of $788 million.

Hostplus has played an active role in this development – Colless added that it “has almost single-handely reinvigorated institutional support for Australian start-ups and entrepreneurs” – allocating more than A$350 million to vehicles raised by M.H. Carnegie & Co, Brandon Capital, Blackbird Ventures and Square Peg Capital. The superannuation fund has more than A$20 billion in capital under management.

"There is no doubt that technology has shaped our society and is pervasive in our everyday lives. In fact, technology companies have become the most valuable companies in the world. We believe it makes sense to further diversify our portfolio into VCs and foster greater innovation for Australia," said David Elia, CEO of Hostplus.

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• Topics
• Australasia
• Venture
• Fundraising
• GPs
• Technology
• LPs
• Australia
• HOSTPLUS
• Venture
• TMT