Super will help fund the next wave of unicorns

The country’s leading venture capitalists are tipping more direct investment will flow from superannuation firms such as Hostplus into start-up deals, as more $100 million-plus raises test the funding capacity of the VC firms.

Last week cross-border payments start-up Airwallex became the latest Australian company to achieve the lauded $US1 billion valuation milestone, making it the quickest local start-up to achieve unicorn status.

The valuation came on the back of a $US100 million raise ($141.3 million) for the fintech, which is less than four years old. The raising was led by US investor DST Global, with participation from Sequoia Capital China, Tencent, Hillhouse Capital, Gobi Partners, Horizons Ventures and Square Peg Capital.

Speaking to The Australian Financial Review, Airwallex co-founder and chief executive Jack Zhang said he did not think local VC firms would be able to support a raise of that size without international funds also investing.

“Square Peg is one of the largest funds in Australia, and even they aren’t large enough to lead a $100 million raise. Typically a fund of that size can back up to $30 million to $40 million at the maximum,” he said.

“DST have a new $3 billion fund every few years.

“Local businesses need the Square Pegs and Blackbirds to support them up to Series B stage, but after that they have to look at the global opportunity.”

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