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Venture capital in Australia

Venture capital (VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which have demonstrated high growth.

Venture capital firms or funds invest in these early-stage companies in exchange for equity, or an ownership stake. Venture capitalists take on the risk of financing risky start-ups in the hopes that some of the companies they invest in will become successful. When an investment is successful and is either acquired or achieves an initial public offering (IPO), venture capital firms have an opportunity to realise returns. Because startups face high uncertainty, VC investments have high rates of failure. Successful funds rely on returns from 'outlier successes' offsetting their losses.

In Australia, there are more than one hundred active VC funds, syndicates, or angel investors making VC-style investments.

In 2022, the largest Australian funds are Blackbird Ventures, Square Peg Capital, and Airtree Ventures. All of these three funds have more than $1 billion AUD under management across multiple funds. These funds have funding from institutional capital, including AustralianSuper, Hostplus, and sophisticated family offices such as Grok and Skip (the family offices of Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar).

Outside of the 'Big 3', other notable institutional funds include AfterWork Ventures, Artesian, Folklore Ventures, Equity Venture Partners, Our Innovation Fund, Investible, and Main Sequence Ventures (the VC arm of the CSIRO).

Several Australian corporates have corporate VC arms, including NAB Ventures, Reinventure (associated with Westpac), IAG Firemark Ventures, and Telstra Ventures.