Square Peg, Australia’s largest pensions-backed venture capital (VC) firm, announced that it has raised $550 million for its fifth fund, which will focus on tech founders in Australia, Southeast Asia, and Israel.
The fund, which secured commitments from new and returning investors, brings Square Peg’s total funds raised to date to over $1.6 billion since its inception 10 years ago. The latest fundraising was backed by Australian industry fund Hostplus, pension fund AustralianSuper, and fund-of-funds manager Roc Partners.
In a statement on its website, Square Peg said the fresh funds will be deployed across two strategies — core venture fund Square Peg Fund 4, which typically invests in early-stage companies from seed to Series B; and the follow-on fund Opportunities Fund 2, which invests in later stage rounds.
“Over the past decade, we have demonstrated that there are significant benefits to investing across multiple regions, which allows us to empower exceptional tech founders from a broader set of opportunities,” the VC firm said.
Founded in 2012 by Paul Bassat, Tony Holt, Justin Liberman, and Barry Brott, Square Peg has backed more than 60 founders and claims to have delivered strong returns and returned substantial capital back to its investors — over $580 million across 11 exits at an IRR of 42%.
Its 50-plus strong portfolio includes Australian design collaboration platform Canva, Singapore-headquartered global e-scooter operator Neuron Mobility, cross-border fintech unicorn Airwallex, and Southeast Asian fintech firm FinAccel.
The VC firm invests in areas such as consumer internet and software as a service (SaaS), and mainly participates in companies’ Series A and Series B funding rounds. It hired Piruze Sabuncu, a former senior executive of the US digital payments firm Stripe, as a partner in its Singapore office in late 2020.
Square Peg said the new fund has already made a number of new and follow-on investments, including US-based recruitment automation platform Kula and Singapore startup Supabase. It also continues to back Airwallex.
“Our fifth generation of funds has been raised in a period of significant global economic uncertainty, however, we are as excited as we have ever been about our opportunity set and believe the coming years will be an incredibly attractive time to be deploying in private tech markets,” the venture investor said.
The close of Square Peg’s latest fund comes as fundraising by Southeast Asia’s privately held companies dipped to a seven-quarter low in July-September, according to the latest report by DealStreetAsia – DATA VANTAGE.
Startups in the region secured $3.72 billion in venture capital funding in the third quarter, down 22% from the previous quarter and 36.4% year on year. On the other hand, deal volume increased 11% quarter-on-quarter to 277 during the period.