22 July 2020
OneVentures reaches final close of its Venture Credit Fund at $80M, positioning the Fund as the top provider of venture debt in Australia
The OneVentures Credit Fund investment team, left to right: James McGrath (Investment Manager), Nick Gainsley (Principal) and Kate Madden (Investment Analyst)
Sydney, AU – 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 approx. $80M. The Fund was launched to investors at the end of 2018, reaching first close in April 2019 and is now looking to invest approx. $120M over the next 3 to 4 years, making it the largest Australia-domiciled venture credit fund.
The final close was over-subscribed with the fund already in profit at 30th June.
Dr Michelle Deaker, OneVentures Managing Partner said “OneVentures is 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.”
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 (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 US and serves 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.
Ventures 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 Principal of the Fund said, ”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.”
The Fund launched in April 2019 after creating the first Australian-Israeli venture partnership with Viola Credit. Viola Credit is part of Viola Group, Israel’s largest technology investment group managing $US3 billion. 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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