It’s been a busy year!
I’ve been taking a break from blogging as its been too hectic going into the end of this year but will aim to do more in the coming break and new year.
Sprinting into the end/last work-week of the year I did a little recap on the first year of Galileo since we launched our fund officially in Dec 2020. Read it here. I can not believe its been only 12 months.
I’ve learned a lot being on the VC side of the table but also having to launch a fund, invest in companies, manage a portfolio, run a support program, hire a small team, invest more, raise more money for our companies and our fund, manage a fund and our LPs all the while dealing with the ups and downs of a pandemic. I’m ready to take a (mini) break!
Galileo pre-seed fund by the numbers
- Invested in 14 new seed-stage companies (averaging 1 new investment per month)
- Our portfolio have attracted over $12m in investment in under 12 months
- Galileo has invested over A$3.5 million into first-time and diverse founders!
- We are the first VC investor in over 90% of our companies – being the first investor is the rule, not the exception for us, and we’re often the first investor, ever.
- Our first follow-on investment into a portfolio company, Relevance AI, led by Insight Partners
- Our portfolio have already created over 72 jobs in high-growth companies
What does this mean in a global context?
VC is experiencing a cash-fuelled boom that has been years in the making. The pandemic was the trigger for VC to go ‘more mainstream’ as the entire asset class matures.
In the US we have seen an increase new micro VC funds/1-person funds as well as the later-stage ‘crossover’ investors jump into early stage with funds like Tiger really making a lot of noise in the US (and starting to in AU) with extremely fast cheque writing.
While everyone points to the US it’s important to remember that globally VC has seen $580bn invested this year. That is nearly 50% more than was invested in 2020, and about 20 times that in 2002. A much of that is outside of the US.
This means global big investors will need to seek for good deals everywhere, as we have already seen at Galileo. Valuations for ‘hot’ companies will keep rising into 2022 in the earlier stages (make it hard for small funds to compete) and Series A-C rounds are in danger of getting disrupted totally by crossover funds.
For Galileo it’s an interesting time – pre-seed/seed is still very much a local game. We think our focus on first-time founders (where its very ‘noisy’) and our focus on pre-seed rounds (where they’re too small for international players to get interested) means that pre-seed will stay very much a local game.
What about in Australia?
Australia VC/Tech/Startups is right now 🔥. Australia saw a continued rise in VC funding between 1 July 2020 and 1 July 2021, to a record US$2.5 billion. Things are only going to get hotter in 2022 as companies keep raising more cash to dominate global markets from local(ish) offices.
Locally we now have some stellar performing funds, on a global scale, that we can all point too. Blackbird recently published their results with at $10b return so far from their funds – which puts them in the top firms globally for their fund vintages (although many of the funds are still not wrapped up).
If Blackbird plans go well, next year we’ll see our first $1b VC fund locally – a prediction I made about 5 years ago to a mentor actually (he did not believe me, but rightly still points out that will you make a good return on a $1b fund is yet to be seen).
For VCs this is great. This means VC as an asset class will keep growing and we’ll keep funding global success companies that perform well.
For founders this is truely a new age – ‘mo money, mo support’ is one Galileo’s key differences but it also broadly applies to Aussie founders.
It truely is the best time to start a global tech business from AU – more funding coming in, more talent that wants to work in high-growth businesses and more investors that want to back you.
Australia used to be considered a tech ‘backwater’ but now everyone is starting to pay attention.
My prediction? We’re going to see ASX 100 all replaced in the coming decade by tech – but I’ll flesh that out in my first holiday blog post to come!
Have a great Xmas and New Year.
