Australia's Square Peg closes third VC fund at $450m

Fund III had raised A$350 million as of June with support from Hostplus, which is also an LP in Square Peg’s first two funds, and AustralianSuper, which is making its first commitment to the firm. Commonwealth Bank and Roc Partners have also come in as new backers, according to The Australian Financial Review.

Square Peg closed its second fund at A$340 million last year with two super funds as LPs, including Hostplus. Its debut raised A$234 million in 2017, exceeding a A$200 million target. Early investments were made outside of a formal fund structure and included Uber in the US. About A$600 million has been returned to investors to date.

Square Peg was established in 2012 by Paul Bassat, co-founder of job listings site Seek, and Barry Bott, previously an early-stage investor for Jagen, a Melbourne-based family office. Bassat said the biggest change he has observed in the local VC ecosystem in the past 1-2 years has been the emergence of a more active late-stage market, made possible by growth in fund sizes. 

“When we started our journey, you could back companies at the seed stage, Series A, maybe Series B, but the ability to back companies right through their lifecycle was really limited. So, our ability now to continue to support our portfolio companies and invest in them four, five, six times over a six to eight-year period is really enhanced,” Bassat said in a podcast announcing the fundraise. 

“Our key limited partners such as Hostplus and AustralianSuper are really keen to invest alongside us in co-invest type of arrangements, so you bring to bear their financial resources, which are obviously enormous. That means we can continue to support our port companies as they grow larger, which is really important because these companies are pursuing global opportunities.”

Square Peg invests with a sector and geography-agnostic approach that focuses on Series A and B, as well as opportunities where the firm can lead rounds and nominate board members. Outside of Australasia, key geographies include Israel and Southeast Asia. An expansion office was opened in Singapore in September, led by Tushar Roy, a partner at the firm.

“2021 will see us really doubling down on [Southeast Asia]. We have spent a lot of time covering the region fly-in, fly-out. That model has reached its scale. We see such tremendous opportunity, we think it justifies having permanent boots on the ground,” Roy said, adding that Square Peg has done a significant amount of recruiting via virtual channels this year.

“We spent a lot of time and energy over 2020 building out the right team, the right footprint to take this strategy forward. I personally relocated to Singapore in the middle of the year and have made a really long-term commitment to the region. Moving in the middle of COVID with my family was not the most fun thing to do, but I’m just so passionate and excited about what we can do here.”

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• Topics
• Australasia
• Southeast Asia
• Fundraising
• Venture
• Australia
• Square Peg Capital
• AustralianSuper
• HOSTPLUS
• ROC Partners