$275 million of your retirement dollars could soon be invested in Aussie tech companies, as super funds give new venture capital a spin

Super funds are given tech venture capital a spin (Photo by William Thomas Cain, Getty Images)
  • Airtree Ventures has raised $275 million in a new funding round, that has been tipped into by by the likes of AustralianSuper, Sunsuper and Statewide Super
  • The fund will back local tech start-ups, having previously invested in design platform Canva, and lenders Athena and Prospa.
  • With $275 million one of the largest raises for local tech investment, it remains unclear if there’s a sufficient number of quality start-ups to absorb that funding.

Some of the country’s biggest superannuation funds have agreed to pour Australian retirement savings into local tech companies.

In total, $275 million — one of the largest amounts ever amassed for emerging Australian tech companies — has been raised by the likes of AustralianSuper, Sunsuper and Statewide Super. That amount tops up a war chest that has already raised $60 million and $250 million in two separate funding rounds.

Managed by Sydney-based venture capital fund Airtree Ventures, the investment fund will be used to invest in and grow a selection of new Australian tech companies. It’s already jumped in on companies like Canva — recently valued at $4.7 billion — and digital lender Athena.

Others investments have been less of a runaway success. Take Prospa, which launched on the ASX in June. It’s had a rollercoaster ride since but is currently around 10% on its opening stock price of $4.46 per share. While Airtree’s investment predates that, it does demonstrate the volatility of the sector.

That too highlights the dangers inherent to investing in tech start-ups. While early investing can prove highly lucrative, it also comes with considerable risk. This no doubt is why some have suggested that Australia’s super funds are well placed to take on the sector.

Receiving around $650 million every month in members’ contributions, AustralianSuper isn’t going to be troubled a great deal by any losses, and holding $142 billion in assets ensures that it has plenty of diversification to offset them at any rate.

Managing retirement savings, and with a government guarantee that members can’t call upon them until their twilight years, the funds also have the enviable kind of time horizon required.

Airtree for its part will use the money to make investments of between $200,000 and $20 million in size. For the next generation of local start-ups, it’ll be welcome news. However, it remains unclear whether or not Australia has enough quality start-ups to absorb that kind of investment. For every Canva or Atlassian, there are no doubt at least dozens of failed attempts to become the next big thing.

The counter-argument would be that without sufficient funding, those fledgling diamonds in the rough will never get off the ground.

For $275 million, it appears there’s at least a couple of funds willing to take that bet.

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