An Australian venture capital firm that has supported the likes of cyber security firm Kasada and Tyro Payments (ASX: TYR) has successfully raised $40 million for its sovereign capability startups fund thanks to a cornerstone investment from the Queensland Investment Corporation (QIC).
When Salus Ventures announced the sovereign capabilities fund in early 2023 it already had secured $25 million, and a year later claims the initiative was “significantly oversubscribed”.
The fund is focused on backing founders, typically at the seed stage, developing world-leading dual-use capabilities enhancing Australia’s national resilience including in cybersecurity, defence, quantum, artificial intelligence, automation, aerospace and software.
Salus Ventures has already invested in numerous companies that fit this profile, including Advanced Navigation which today announced it had received a $1 million Cooperative Research Centres Projects (CRC-P) grant to accelerate development and production of its breakthrough Light Detection, Altimetry and Velocimetry (LiDAV) technology for Earth applications.
Other Salus investments include quantum computing infrastructure software company Q-CTRL, Israel-based global freelance work marketplace Fiverr (NYSE: FVRR), and data analytics platform provider Instaclustr, which was acquired by NetApp (NASDAQ: NTAP) in 2022.
The firm says the investment by the QIC-managed Queensland Venture Capital Development Fund (QVCDF) supports Salus Ventures’ further expansion into Queensland, and accelerates its investment in promising Queensland startups developing world-class technology.
“Salus Ventures is delighted to have exceeded our ambitious fundraising target for our debut fund and by the strategic quality of the investor base,” says Salus Ventures general partner and co-founder Dan Bennett.
“We believe Salus has unlocked a meaningful opportunity for our stakeholders as the dual-use market in Australia and globally is experiencing accelerated significance as the appetite to strengthen government and defence capabilities with privately developed innovation grows, driven in part by a shifting geostrategic landscape and trending to deglobalisation.”
In its first year of operations for the new fund, Salus Ventures reviewed more than 600 companies before investing in five promising startups: defence and first responder AI support system Arkeus, circular-economy platform Phantm, space imagery enabler HEO Robotics, CIA-supported Australian computer vision startup Visionary Machines, and farm manager and biosecurity application ExoFlare.
“We are also absolutely delighted to have secured a highly strategic investment from QIC which includes partnering to align mutual resources, networks, and expertise towards a shared goal of growing the deep technology ecosystem,” Bennett adds.
General partner and co-founder Marten Peck highlights the Salus Ventures executive team includes highly experienced deep-tech investors who have held key operational and investment roles in various international hubs including the US, UK and Israel.
“Our uniquely experienced team is supported by a distinguished and highly strategic investor and advisor base all of whom serve as both expert mentors and powerful super connectors,” he says.
“The team at Salus Ventures is dedicated to backing heroic founders and unlocking valuable opportunities in Canberra, Washington DC and London, created by vital policy including AUKUS Pillar II, the National Reconstruction Fund and the Advanced Strategic Capability Accelerator.
“Whilst our capabilities extend across Australia and internationally, we identified Queensland as a strategic ecosystem with excellent characteristics to foster and accelerate innovation particularly relevant to our investment mandate.”
QIC Private Equity Partner Nicholas Guest says Salus Ventures’ expertise, networks and capital will deliver significant benefits.
“Salus Ventures has rapidly established itself as a centre of gravity for emerging Australian national resilience start-ups,” Guest says.
“Salus Ventures will play a central role in achieving this by strengthening our local venture capital industry and growing the amount of capital available.
“Queensland boasts a rich history of excellence in many of these industries, including aerospace and defence, artificial intelligence, enterprise infrastructure and cybersecurity. The thematic coverage gained by Salus Ventures’ participation in the QVCDF program affords us the opportunity to tap into these industries, where commercial outcomes can be achieved by solving critically important national challenges.”
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