Australia's Rampersand targets $29m for fourth VC fund
Rampersand, an Australia-based VC investor, is looking to raise A$40 million ($29.6 million) for its fourth fund, which will address what the firm describes as a “chronic funding gap in early-stage seed funding.”
Founded in 2013 by Paul Naphtali, who has a background in marketing and communications, Rampersand has already received commitments of A$30 million for the new fund. These came from nearly 100 families and high net worth individuals (HNWIs).
“There is a gap in the Australian and New Zealand funding landscape between the A$2 billion super-backed funds, which do an amazing job driving the overall growth of the ecosystem and can write big checks for later-stage companies, and the smaller angel groups and funds, which do an amazing job writing smaller checks that help get companies started,” Naphtali said in a blog post.
The Rampersand Future Tech Fund will focus on early-stage opportunities but seek to participate in follow-on rounds in certain cases. The firm has backed 24 start-ups at the seed stage through its existing three funds, of which two-thirds have gone on to close Series A rounds. Nearly half have received Series B and C funding. The average valuation increase during its holding period is 8x.
Past investments include online consulting marketplace Expert360, sustainable livestock feed solutions provider Goterra, carbon-neutral delivery business Sendle, cloud-based productivity app Skedulo, and data forecasting start-up PredictHQ. Expert360 and Sendle closed Series C rounds in 2020 and 2021, respectively.
Rampersand raised A$6 million for its debut fund in 2013 and A$38 million for its second in 2016, according to AVCJ Research. The Australian Financial Review reported that the firm raised an opportunity fund in 2019 to make follow-on investments in the likes of Sendle, Expert360, and PredictHQ. It added that Fund I has achieved distributions to paid-in (DPI) of 1.5x.
Naphtali noted that it has become clear Australia and New Zealand can produce global start-ups, contrasting the environment with 2013. Companies now have more support and choice on where to seek funding, although he believes the ecosystem is still not robust enough.
“No matter how much funding is available, building the next generation’s great companies is hard. And there is no single right answer for which growth path works best. For some founders, escape velocity is key, and raising several, large rounds of capital will help pave the way. For others, porpoising is more natural and leads to great success,” Naphtali added.
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