In addition to the institutional investors, the new fund was also supported by more than 270 individual investors, many of whom, Blackbird said, were tech founders and operators.
Blackbird said it would split the fund into three separate pools, with a $284 million core fund, a $668 million follow-on fund for backing existing portfolio companies, and a $NZ75 million pool set aside for New Zealand-based investments.
Mr Baker said raising the fund was made more stressful by the global crunch in tech valuations, but he had been delighted by so many of its existing investors coming in with larger checks.
‘Existential moment’
“For us, it is sort of this existential moment, because we know that we have to raise a new fund to keep the business going, even though the market had started to decline,” he said.
“But I really feel that super funds understand venture capital fully now, and they are really thorough in their due diligence, which is intensive time for us, but a great development for the sector.
“Our returns have been very strong. The first fund is sitting on 35 times its capital, even after valuation decreases this year, and all our other funds are performing well.”
Those valuation decreases have been headlined by Canva, which remains a standout performer despite recent downgrades. In July, Blackbird followed its US backers by cutting Canva’s valuation by $US14.4 billion to $US25.6 billion.
Despite its success in closing the new fund in a depressed market, 2022 has not been all roses for Blackbird.
$3 billion hit
At the end of last year, it revealed to the Financial Review that its $1.3 billion invested since inception had grown into a portfolio valued at $10 billion. Re-rating of its portfolio firms this year, amid the plunging valuations in publicly listed tech stocks, had resulted in that portfolio value shrinking to about $7 billion.
Asked about the likelihood of lower valuations in pending funding rounds for existing portfolio companies, Mr Scevak said should it happen, it should be viewed in the context of similar rises and that happened to established listed companies falls, rather than being terminal for the start- ups in question.
“High-growth companies on the public markets have been down 80 per cent, and ultimately the valuation frameworks of the most mature and best software companies does cascade down,” Mr Scevak said.
“If a company is unable to grow into its valuation it is not a death knell, it is not even something to be too down about. Every company in the world from Google to Meta and any other big tech firm has valuations that are down at the minute, but over a longer arc of progress these are all footnotes in history.
“We do expect the market to be tougher next year than it was this year, it isn’t just going to snap back into 2021’s euphoria.”
On Canva, Mr Baker said he was confident its valuation would make its way back up to its previous heights over time, and said it was proving its status as both a world-class company and a focal point for other aspiring Australian tech companies to follow .
In October, Canva announced it had hit a landmark metric of 100 million monthly active users, shortly after it had unveiled a major product expansion to take it beyond software design into broader office productivity, in competition with the likes of Microsoft 365 and Google’s Workspace suite .
“You can’t understate how important Canva and the leaders of Canva are for the ecosystem, and for Australia as a whole in putting up the next generation of business leaders and entrepreneurs,” Mr Baker said.
“In terms of valuation, the company is continuing to grow beautifully, it is significantly cashflow positive … It is powering ahead, so we are very much holders of our Canva stock.”
Mr Baker said Blackbird’s latest fund would likely have a similar lifecycle as its earlier funds of two to three years, before it would look to close its next one.
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