// OneVentures has just closed its fourth venture credit fund, and wants WA startups to apply …
OneVentures, an Australian venture capital firm which invests in innovative technology and healthcare companies solving global problems, has completed the final close of its fourth fund, the 1V Venture Credit Fund (the Fund), at approximately $80M.
The Fund was first launched to investors at the end of 2018, and is now looking to invest approximately $120M over the next 3 to 4 years, making it the largest Australian venture credit fund.
OneVentures Managing Partner Dr Michelle Deaker said they are delighted with the progress of this new fund since launch, with fund metrics on deployment and interest yield paid at or ahead of expectations.
“The final close was well supported, with investors recognising the product as an attractive way to get exposure to Australia’s fastest growing technology companies at lower risk, with a strong and stable income yield,” she said.
Michelle Deaker
The Fund can make investments between $500k and $10M (per company), though has capacity to do up to $20M in conjunction with its co-investors and Israeli partner Viola, into expansion stage technology and tech-enabled companies with strong revenue growth.
Venture credit
Venture credit (or venture debt) is suited to those looking to accelerate their business, or companies looking to incorporate venture credit within the funding mix of their capital raising round and is less dilutive for founders and early investors. It typically makes up 10% of total venture capital and 25% of later funding rounds in the U.S., serving a role where traditional lenders such as banks are unable to support.
OneVentures is seeking companies that are differentiated through technological innovation and operating in the B2B SaaS, fintech, proptech, healthtech, marketplace, consumer and e-commerce spaces, who are led by exceptional founding teams and generating upwards of $3-5M in revenue.
The Fund is the most active domestic venture credit provider in Australia, with six transactions across five companies and a sixth investment soon to close.
The portfolio has also proved to be very resilient in the current climate with several companies advantaged. Ecommerce shipping and logistics business Shippit, which the Fund backed in December 2019, has seen exceptional growth, along with strong performance in other investments in the SaaS, edtech and BI spaces.
According to OneVentures, venture credit is an attractive option for technology companies, as it offers less ownership dilution to founders and existing shareholders and can be put in place faster than traditional equity financing. It provides a longer capital runway, allowing companies more time to achieve important milestones before a subsequent round of financing.
In the same way as it does with equity investments, the OneVentures team will continue to provide insight, network and strategic knowledge to the investee company.
William On, CEO of Shippit, said “the additional funding from OneVentures Credit Fund has allowed us to more rapidly scale our business and meet demand from e-commerce and home buying during the COVID lockdowns. We’ve also been able to launch a new product into market.”
Nick Gainsley (see main photo) Principal of the Fund says that “venture credit is an excellent product in this current time, providing a flexible solution for a company’s financing.”
“Uses of capital include scaling a business more rapidly through investment into sales and marketing, or extending runway without setting a valuation which is particularly applicable to businesses that may have experienced a setback or delay in progress such as through the COVID-19 pandemic.”
Nick Gainsley
Support for Perth’s startup scene
Nick – who was over in Perth last year for West Tech Fest – said he would love to get interest for the fund across Australia, including Perth’s vibrant tech startup scene.
“When I was there last year, I was very impressed by the quality of the businesses there and the visions local startups have” said Nick.
He explained that Perth’s startup scene is “very different to the rest of Australia due to its remoteness. As a result, we’ve seen a wide range of great entrepreneurs who are punching well above their weight in terms of ideas and technical expertise.”
“We would love to see Western Australian companies in the portfolio and we encourage local startups that meet the fund’s criteria to reach out to our team. OneVentures already has a strong investor base out of Perth as well.”
Nick Gainsley
Creating partnerships
The Fund launched in April 2019 after creating the first Australian-Israeli venture partnership with Viola Credit, which is part of Viola Group, Israel’s largest technology investment group managing $US3B.
The combination of Nick Gainsley from Europe’s leading venture credit firm, Kreos Capital, and the partnership with Viola has brought in world-class venture lending expertise to Australia. Viola and OneVentures are about to close their first joint investment.
The Fund is backed by a suite of OneVentures’ new and existing local and international investors which include many of Australia’s largest family offices and high net worth investors.
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To learn more, visit the OneVentures website: www.one-ventures.com/
MAIN IMAGE: Nick Gainsley, Principal of the 1V Venture Credit Fund. Image supplied.
