US investors’ appetite for Aussie investments is rising, says Equity Venture Partners’ Leibman

Sydney, Australia. Photo by Liam Pozz on Unsplash

The venture capital scene in Australia is relatively quiet – compared to Southeast Asia’s at least.

According to DEALSTREETASIA‘s 2018 private equity & venture capital data, Singapore raked in $7.77 billion worth of private capital last year, Indonesia took in $3.37 billion; and Vietnam, $2.28 billion. Australia drew slightly less – $2.1 billion (A$2.9 billion), according to Preqin estimates.

That figure however, represents an over two-fold increase from 2017. Dry powder entering the Australian VC market has also risen in recent months.

Sydney-based venture capital firm Equity Venture Partners (EVP) points to rising interest from foreign investors, particularly from the US.

“We’re definitely seeing increasing appetite from US investors who are actively looking for opportunities in Australia,” said Howard Leibman, founder of Equity Venture Partners. 

He added that US investors are stepping in where Australian VCs can’t: the larger Series B and C rounds.

Leibman added: “Our two largest companies SiteMinder and Deputy are both now funded by large US VCs. SiteMinder is now funded by Technology Crossover Ventures (TCV), while Deputy raised funds from OpenView Venture Partners, and more recently from Institutional Venture Partners.” 

Last year, data centre provider AirTrunk raised $621 million (A$850 million) from Goldman Sachs and TPG, making it one of the largest venture deals in the country.

“I think we’ll see some of the Australian funds be more able to support those larger capital raising rounds over time, but I think a number of US funds which are (already) quite active in Australia and will be increasingly so moving forward,” said Leibman.

Earlier this month, EVP closed its $35-million second fund focused on early-stage B2B software companies. The VC has $60 million under management across Australia and New Zealand, and a portfolio of 22 businesses including Hotelclub, Siteminder, Rezdy and Shippit.

Edited excerpts of an interview:

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