New startup investment fund AirTree Ventures has raised $60 million since launching in March.
Leading AirTree is former Microsoft exec and tech investor Daniel Petre and his offsider, former Expedia MD Craig Blair.
The pair announced the fund back in March, setting a raising target of $50 million. Petre said the demand has been strong and there was potential to raise up to $80 million if they wished.
“It was incredibly kind of easy, it was relatively quick. We were only really in market for maybe 8 to 10 weeks total,” he told Business Insider, adding “Because we had a track record that really helped a lot.”
There are 17 investors involved in the venture, including a number of Westpac, UBS and Macquarie Bank clients as well as several of high net worth individuals.
AirTree is looking to invest between $2 million and $5 million in about 15 tech startups over the next three years at an expected rate of about five companies a year.
“We’re quite a conservative technology investor,” Petre said, adding AirTree will be focussing on startups at the growth stage.
Petre said at his previous fund Netus* they looked at 550 businesses and did nine deals.
He sees opportunities for startups which are disrupting both financial services and real estate marketplaces.
“Financial services is going to get disrupted. It’s a far more regulated environment, they’re bigger players and it won’t be quite as easy as what happened to classifieds,” he said.
“Definitely in the short term payments and lending [will be challenged].”
Petre said in the real estate sector paying thousands of dollars to list a property on a website is “ludicrous”.
“You’re putting bits on a server,” he said.
“That model is going to go away and it’s going to pay-for-performance instead of pay-to-list.
“There are going to be disruptive plays in real estate and they will challenge both REA [Group] and Domain.”
AirTree will be looking at startups which are generating revenue, but they don’t necessarily have to be cash-flow positive. So far the group has looked at 30 companies, averaging about 10 a week.
“We spend a lot of time on the business model, the metrics and the people,” he said.
“We’re very patient and we’re not going to rush into it.
“There’s two that are maybes…that look ok.
“I’m confident by the end of the year we may have closed maybe two or three deals.”
*Netus is the parent company of Allure Media, Business Insider Australia’s publisher, and is now owned by Fairfax.