Australia’s Adventure Capital targets $100m VC fund

Fundraising efforts will focus on international LPs as much as domestic investors, given the Australian superannuation funds' weakening appetite for venture capital.

"A lot of them have a sour taste in their mouth because of poor performance by the 2000 vintage funds," Stuart Richardson, Adventure Capital's founder and managing partner, told AVCJ. He also noted concerns regarding fees. "If you raise $400 million then you will burn through $100 million in fees over the lifecycle of the fund. You need to perform very well to justify that."

Adventure's investment strategy is just as international as its approach to fundraising. The firm targets Australian technology companies that have the capacity to expand overseas. For example, recent investee 121Cast, which makes personalized radio products, relies on the US for the vast majority of its 75,000 users.

David Scott Carlick, Adventure's chairman and venture partner, is leading internationalization efforts. An executive at Rho Ventures, he was previously chairman of MySpace and co-founded DoubleClick, the online advertising business bought by Google for $3.1 billion in 2007.

Adventure's Digital Accelerator fund is expected to invest in 25-50 companies, committing $500,000 to $5 million per transaction. Richardson sees a gap in the market at this level, with traditional VC funds normally coming in at $10 million-plus and angel investors generally unwilling to go beyond $500,000.

"This situation isn't unusual in Australia or Asia but less so in the US where the super angel fund model and the micro VC model have been defined," Richardson said. "The Silicon Valley ecosystem will take time to become established in other locations."

Adam Jacobs, managing director of The Iconic, an Australian online fashion retailer that recently received $20 million in start-up funding from Berlin-based Rocket Internet, took a swipe at the country's VC community, saying it is very conservative towards online retail and e-commerce in general.

His statement was criticized in some quarters, with the Australian Private Equity & Venture Capital Association (AVCAL) noting that domestic VC fundraising has been difficult in recent years so there isn't a lot of capital available for investments.

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