Today, we are pleased to announce our fourth fund of $500M. We thank those institutions and individuals who continue their belief in the mission of Blackbird and will enthusiastically invest the capital into Australia’s and New Zealand’s most ambitious startups over the coming decade.
Alongside announcing the fund, we would like to make public the performance of every dollar of capital we have invested, to signal our intention to build our management company with the same ambition as the startups we invest in and repeat our mission to become life-long owners of the best businesses. This starts with investing hundreds of thousands of dollars before a startup has a product and hundreds of millions of dollars as they succeed.
Our fourth fund is led by local institutional investors such as the Future Fund, Australian Super, HESTA, institutional clients of Cambridge Associates, First State Super (who from the middle of September will be known as Aware Super), and Telstra Super, as well as international investors Cendana Capital, Greenspring Associates and Pavilion Capital.
Importantly, this means that the fruits of our portfolio’s success - like Canva, SafetyCulture, Culture Amp and rising stars like Propeller - will grow the retirement savings of millions of Australians.
Our new fund takes the total committed capital across all Blackbird Funds to $1.24B, making us the largest venture firm in Australia and New Zealand.
Ultimately, what matters in investing are the quality of returns to investors. The net IRR of every dollar of invested capital in all Blackbird funds is currently 46.7% as of June 30.
Like the companies we invest in, we have the ambition for Blackbird to be the best in the world. As greater numbers of world-leading startups are created outside of Silicon Valley, so too will world-leading venture capital firms.
The dynamics of venture capital are such that just a few outlier successful companies are needed to make this happen.
Blackbird has invested in the first and every round of Canva, Zoox, SafetyCulture, Culture Amp as well as rising stars in our portfolio like Propeller, Baraja, Gilmour Space, Proxy, Harrison AI and nura which all are worth over A$100M.
The Blackbird Master Plan is to invest hundreds of thousands of dollars right at the beginning of a company’s life before there is product or revenue, earn a courtside seat to the best companies by building a great relationship with them and then invest hundreds of millions over their lifetimes.This philosophy is in contrast to the traditional model in the venture capital industry, which is currently structured around rounds of financing rather than companies. Funds invest in just the seed round or just the series A round before they know a company will be successful and then invest nearly nothing after they know it has succeeded.
In the case of Canva, Blackbird first invested $250,000 in the very first round before there was a product and now has invested more than $165M in the company.
As a result, Blackbird holds a 14% ownership stake in Canva, by far the largest of any investor.
We want to invest hundreds of millions, if not billions of dollars, in each world-leading company, starting right at the beginning. As investment partners at Blackbird, we are not allowed to tell a startup that they are ‘too early’ as a reason for not making an investment.
Just like the startups Blackbird invests in, we too have the ambition to be the best in the world.
Traditionally, venture capital firms have not been very ambitious in building their own operations. There are a set of investment professionals with a few support staff, and the firms themselves have not focused on winning a majority market share, investing in research and development or creating great cultures.
Blackbird was five people at the beginning of its third fund, is currently 24 people and we have plans to grow to 40 by the end of 2021.
Our ambition is to become Australia’s best place to work. We want to attract and nurture the best talent from a diversity of backgrounds. We are a fully distributed workforce with offices in Sydney, Melbourne and Auckland, and our team now comprises more women than men, including on the investment team.
To help create a great investment firm that survives a hundred years, Blackbird is pleased to announce that Atlassian co-founder Mike Cannon-Brookes has joined the board of directors as Chair of the Blackbird management company.
He describes Blackbird as “three things at once - a startup, an investment firm and an incredibly talented group of people backing ambitious founders. I share with the team a deep belief that the world change comes from entrepreneurs who are wildly wrong, then wildly right. I’m honoured to be able to help the team on their next stage of growth.”
Additionally, with this fourth fund, all Blackbird employees have become owners of the Blackbird management company in addition to receiving carried interest in the funds.
We are also proud to welcome Blackbird’s Partners Samantha Wong, and Nick Crocker into the partnership on an equal basis to Rick and I. If we are going to flourish as a firm for decades, we need to empower the next generation of Blackbirds to succeed here.
Just like we encourage our portfolio companies to have generous employee share schemes, we want everyone at Blackbird to be an owner of the business and share in its success.
The coming years for Australian and New Zealand startups will be our greatest yet; the good ole days are right now.
Niki on behalf of Blackbird