BlackBird seeks to be long-term investors in Australian startups: Niki Scevak

BlackBird Ventures, an A$200 million ($153.2 million) venture capital fund which seeks to be long-term partners with Australia-based startup founders, invests in companies that have a  global outlook from day one, Niki Scevak, its managing director, said in an interaction.

The VC firm also operates AMA Sunrise, a platform for start-up founders to collaborate with and help each other, and Sirius A, a program for Computer Sciences recent graduates.

Niki Scevak, Managing Director of Blackbird Ventures , has plenty of insights to offer in his email conversation with DEALSTREETASIA.

One subject he weighs upon is the trend of science, technology, engineering & mathematics (STEM) education in Australia. He comments: “Education needs to be reformatted for the world we live in. I’m optimistic that the teachings of computer science and entrepreneurship will make their way earlier and earlier into our school system and that ultimately will create the raw ingredients for our success.”

Another area which he feel continues to stagnate is the commercialisation of intellectual properties and concepts invented in Australian universities. Despite their consistent top-tier global rankings, anecdotal evidence suggests that these universities attracts elite researchers without offering a platform for commercialisation of their research.

He offers, “Unfortunately I don’t have any hope that they will change. It’s not just Australian universities, it’s nearly every university in the world that is not Stanford. Real innovation comes from the wild spirits who become obsessed with a problem in the world, not those who are fascinated by technology for technologies sake.”

Edited Excerpts:

You are currently managing three funds – an A$30 million ($22.98 million), A$70 million ($53.62 million) and A$130 million ($99.58 million) – all with considerably large amounts of money. Could you disclose the profiles of your investors? 

We originally raised our first fund predominantly from the founders of successful technology companies like AtlassianCampaign MonitorRedBubbleRetailmenotAconex and many more.

That was an essential ingredient for founding Blackbird because at the heart of what we do is to help the next generation of successful companies through a community of already successful founders.

The second series of funds was the same community of founders doubling their commitment and then supercharged with two superannuation funds, First State Super and Hostplus.

You would not invest in startup founders who have exit strategies – but, in their pitch to you, they would not necessarily disclose that, but may have drawn up such strategies. What sort of measures you have taken to prevent such that?

We are looking for people who are doing their life’s work because nearly all of the economic value in the world in the past decades has been created by such people.

Accordingly, rather than looking at just the absence of an exit strategy, we look to answer the question of why the founder cares so much about the problem and what they have done in their life that has led them to the unique insights.

You tend to favour investing in Seed and Series A, with occasional investments in Series B and C. Can you offer some examples of your Series B and C investments? What were the rationales behind those investments? What sort of products/services those start-ups offer on a global basis? What made them stand out?

Our job is to find the most ambitious Australians as early as we can. That usually means we first invest in the seed round of a company. However, unlike other venture capital firms, we don’t see ourselves as investors in a specific stage.

We want to be an investor all through a company’s life and our dream is to one day be able to buy more ownership at events like an IPO rather than sell; hence, that means our later stage investments are tied nearly always to our follow-on investments and that’s because we always want to make decisions with the bad news. I think you make better decisions when you have had a court-side seat to the story over a number of years.

From your blog, you indicate the type of businesses you would like to invest. Could you provide some investments you have made with respect to each type of businesses?

70% of our first fund was invested in SaaS companies that sold to the worker of an organisation rather than in a top down way to the CIO. The remaining was a mix of marketplaces and frontier investments in autonomous vehicles. In our second fund, the mix has changed only slightly with SaaS and marketplaces roughly half, and frontier investments the other half.

The Australian VC scene is not ideal for startups. From a lack of capital, to investors demanding large stake without offering anything on the table, and lack of support from the government. In what ways, do you expect these hurdles will be overcome ?

Australian startups who are trying to be the best in the world operate in a global market for financing, which means that as well as Australian Venture Capital they can raise from Silicon Valley investors or anyone from around the world. Three quarters of companies we have invested in have a US investor on their cap table too.

So I think if startups are more ambitious, then the market will be even more global for the financing needs. The government is very friendly to startups with the R&D tax grant and things like investor incentives like our fund structure (ESVCLP) and the additional angel investor tax write off credits. But really it’s up to founders to create startups not governments.

Your AMA Sunrise is a platform where startup founders will have the opportunity to connect and learn from each other. Could you elaborate more on the mission of this platform and what has it been able to achieve?

The foundation of BlackBird is founders helping other founders and that includes founders we have not invested in. We believe that if we help spread the collective knowledge of Australia’s successful founders through things like the weekly AMAs and our annual The Sunrise conference, more great startups will succeed and in turn we’ll benefit from that.

Ultimately, I hope our community work will help spread our beliefs and values and in turn create a magnetic force for great founders to speak to us when they are seeking capital for their startups.

Blackbird is also running Sirius A, a graduate program that aims at recent graduates of Universities in Sydney with a Computer Sciences degree. What sort of experiences do you offer the graduates and what do you expect out of the graduates?

We’re trying to open up the eyes of our best students to the world of startups. Most of the best get recruited by global technology companies like Facebook and Tesla. We want them to consider working for the next great Australian companies where their work will have a bigger impact and they’ll be able to work in a much faster growing environment than the large US companies.

Also Read:  

QIC announces $800m first close on global infrastructure fund

VC Index Ventures leads $23m Series B round in Australia’s SafetyCulture

Accel-backed Atlassian shares soar in market debut, brings light to IPO market

Australia’s PE firm Wattle Hill hits first close at $200m

Blackstone, KKR said to arrange bid financing for Valeant’s Australian unit

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.