Australia's Main Sequence hits $305m first close on Fund III

Investors include Hostplus, Morgan Stanley Wealth Management, Temasek Holdings, NGS Super, Australian Ethical Investment, The Grantham Foundation, and LGT Crestone, a firm representing local high net worth individuals. Daiwa Securities Group joined as the firm’s first Japanese LP.

“Deep technology companies have the potential to deliver strong long-term returns on behalf of our members whilst aiming to provide solutions to societal, technological or ecological problems,” Hostplus CIO Sam Sicilia said in a statement.

The first close also includes half of a AUD 150m commitment from Australian science agency CSIRO, which set up Main Sequence in 2017. Main Sequence retains close ties to CSIRO, especially in terms of portfolio support, but has secured independence in operations and given comfort to financial LPs via the local ESVCLP limited partner structure.

CSIRO provided a AUD 100m anchor commitment to the debut fund, which closed on AUD 240m in 2018. Hostplus and the University of Melbourne Endowment Trust were also LPs. Fund II had to be raised entirely from outside sources and closed oversubscribed on AUD 250m in 2021 with all existing LPs re-upping plus some contacts that were not ready to commit in Fund I.

As of Fund II’s final close, there was an eight-strong investment committee with only one vote from CSIRO and no veto, and decisions need not be unanimous. This gives Main Sequence a powerful combination: independence in calling deals plus access to government resources in due diligence and company building, including some 3,500 scientists.

“The community we have created around this mission cares deeply about finding and scaling solutions to planetary problems like decarbonisation, feeding a growing population and enabling the next intelligence leap,” Mike Zimmerman, a partner at Main Sequence, added.

“Thanks to their support, we have the flexibility and fortitude to back and build breakthrough companies grounded in research and help them actualise their impact for decades to come.”

Main Sequence has invested in 53 companies to date, split approximately evenly across the first two funds, and claims that their combined market value has grown to more than AUD 6.8bn. Climate and impact-related themes are core to the mandate, as are national security-linked domains such as cybersecurity and advanced computing.

Some of the most recent activity includes participation in a USD 18m round for Quantum Brilliance, a quantum computer maker, and a USD 73m round for Loam Bio, which uses microbes to sequester carbon in farm soils. Last April, the firm backed a USD 20m round for Fivecast, a collaboration between governments and research institutions focused on artificial intelligence in national defence.

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• Topics
• Australasia
• Fundraising
• Venture
• Technology
• Cleantech
• Australia
• Main Sequence Ventures
• HOSTPLUS
• Morgan Stanley
• Temasek Holdings
• Daiwa Securities Group
• deep-tech