As it stands, Blackbird Ventures has visibility on most of the start-up pitches that circulate the market. In 2023, the firm tipped $183 million into Australian and Kiwi start-ups, stemming from 38 cheques. There were 14 new and 24 follow-on rounds.
But the shrinking size of the deals have started to trouble venture investors across the sector. Only 10 per cent of deals struck in 2023 exceeded $20 million, with only 2 per cent of deals exceeding $50 million, according to data from Cut Through Ventures.
Money to spend
This could pose a problem for the major venture funds, who raced to bank enormous funds in 2022 and now need to deploy it.
Blackbird, and fellow venture funds AirTree and Square Peg, broke records in 2022 securing funds that reached $1 billion. Most of the limited partners in these latest funds are superannuation funds.
But the US has not been immune to the tightening venture market. Throughout 2023, VC-backed start-ups raised $US140 billion; a 35 per cent drop on the year earlier, according to EY.
Rising interest rates, high valuations and a dearth of liquidity will continue to pour cold water on the sector.
“If 2023 performance is any guide, the market may record a sub $100 billion year in 2024,” Jeffrey Grabow, US venture capital leader at EY, said. “A few disruptive deals could change that outlook, but we are not returning to the exuberance of the bull run market anytime soon.”
