Australian technology-focused venture capital fund Reinventure Group has outlined how it’s looking to invest into fintech startups.
It’s the second fund to be managed by Reinventure Group after Westpac doubled its exposure to VC in August, investing a further $50 million to bring the total to $100 million.
Reinventure’s first fund, seeded with $50 million in early 2014, invested in 10 companies: SocietyOne, Coinbase, Nabo, Zetaris, PromisePay, Hey You, Auror, Data Republic, Flare and Valiant.
Now founders Danny Gilligan and Simon Cant are gearing up to invest about $25 million in a further eight startups and have said they must be riskier, “non-consensus” businesses, and thus expect half of the investments to be wrong.
Speaking to The Australian, Cant said: “Part of our challenge sometimes is when things look really obvious or make a lot of sense, it’s probably not the right investment for us.”
As well as only backing disruptive innovations, as opposed to a sure thing, Gilligan and Cant said they prefer deals with entrepreneurs who “hustle their own cash” and introductions from their portfolio companies or Westpac.
“The best way to connect with us is via referrals. We place particular weight on referrals from other entrepreneurs,” Reinventure’s website says.
The VC fund will be looking into “transformative” areas such as data, security, identity and trust, as well as connecting industries such as health, real estate and agriculture.
Emerging opportunities in AI have also caught their attention.
“Now AI is starting to hit maturity because all of the enabling technologies and the processing power is sufficient to actually make it useful,” Cant told The Australian.
Back in 2014 when it was announced Westpac had first tipped $50 million into the VC fund, it was expected the fund would back “proven entrepreneurs” working on early stage banking, data aggregation and payment systems businesses.
The change in direction, two years on, is a reflection of the increased competition in the Australian VC space, while the closure of Reinventure’s Fund 2 also shows Westpac has high hopes for technology reshaping financial markets.
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