Global pre-seed venture capital investment firm Antler has closed its second Australian fund, raising more than $77 million, well above its original target of $60 million.
The fund, for which capital raising began in 2022, passed its target in less than 12 months, which Antler noted was much faster than the prevailing typical venture fundraising period of 18 months to 24 months.
The firm’s first Australian fund raised $46 million in 2019 and was also oversubscribed.
The second fund will be used to invest in more than 100 new technology start-ups following Antler’s established process of identifying and nurturing potential founders, in some cases even before they know what problem they will seek to solve.
Antler Australia Fund II achieved a first close in May 2023 and has already invested in more than 40 companies including Enaxiom, Altai and Enrola.
Most of the investors in the new fund are individual investors but the fund has received commitments from the Queensland state government’s Queensland Venture Capital Development Fund which is managed by Queensland Investment Corporation (QIC). Antler’s Global Access Fund (GAF) is also a limited partner (LP). GAF is designed to give Antler investors exposure to a globally diversified early-stage fund through 12 Antler regional funds. Other notable investors include wealth manager Morrows.
In total, 32% of commitments came from investors who had backed Antler’s first Australian fund.
Antler chief commercial officer and Antler Australia founding partner Bede Moore said: “We are very pleased to be augmenting the continued support of our local LP base with an increasing pool of offshore institutional investors who recognise the health and opportunity of our local ecosystem. Australia Fund II represents a further advance for us locally and will allow us to provide deeper support to our founders from Day Zero to Series A.”
Antler is also introducing its new follow-on investment structure, agreement for rolling capital (ARC) to its Australian investments. The ARC structure was developed by Antler’s New York office and is now being rolled-out across the firm’s 27 locations.
Under ARC, Antler will continue to invest an initial cheque of $225,000, but ARC also guarantees Antler’s follow-on participation in the subsequent pre-seed round, where the firm will take up to one-third of the next round, if the founder can secure at least $300,000 from sophisticated investors in their first 12 months. Antler says ARC effectively increases the pace of securing early-stage capital while still managing the risk of investing in companies that may struggle to raise funds from other sources.
“Our data shows that companies which fail to raise capital within their first 12 months are unlikely to reach Series A,” Moore said. “However, across the 1300+ investments Antler has made globally since 2018, we’ve found that those that secure at least US$250,000 during that period have nearly a 50% chance of advancing to Series A.
“We’ve designed the ARC instrument to be a key support for Antler founders as they scale to that stage, and we’re excited to implement it across the Australian portfolio.”
Antler has brought forward by 12 months plans to open its first Brisbane founder residency program. The program will now be launched in February.
Antler said the decision followed strong market interest and founder demand from the Queensland ecosystem. The Queensland residencies, backed by the Queensland Venture Capital Development Fund, will aim to fund over 15 Queensland-based start-ups.
Antler has so far partnered with more than 145 start-ups in Australia, with its sector-agnostic approach spanning sectors such as deep-tech, B2B SaaS, climate-tech, fintech and consumer-tech.
Companies which received backing from the first Antler Australia fund include: Tactiq, Upcover, Sapyen, Reach Alts, and Sync Technologies. A total of $160m in external capital has been raised across the portfolio.
Image: Antler Australia founding partner Bede Moore.