Startup Insights with Rick Baker

It was a special episode of Giants Weekly, where we were joined by our very own Rick Baker for the last episode of 2020. It was a fireside chat where we canvassed a range of questions about the ANZ startup ecosystem. What software products are investors interested in? What is Blackbird looking for? When do international investors typically join ANZ fundraising rounds? Read on for our key takeaways or watch the full video below.

Has anything changed with Blackbird’s recent $500 million fund?

The short answer is no. The larger the fund gets, the larger the myth becomes that Blackbird won’t invest from day one in a business. Blackbird is looking to invest right at the beginning - no cheque or company is too small. In fact, Blackbird’s first investment in the 2020 core fund was $34,000! “We love seed investing,” says Rick. Blackbird is also still industry agnostic. Even though Rick says 60% of investments are into software as a broad category (SaaS, Marketplace etc), 40% of investments are what he calls ‘crazy stuff’ or science nonfiction companies. Crazy in ambition and crazy in scope, they range from space to solar cells.

What kind of software products is Blackbird interested in?

“We still love software,” says Rick. It’s easy to think that the low hanging fruit has already been picked but Rick still sees billion dollar opportunities in the space. In particular, software products are really strong tools for the collaboration of data and collaboration of people. While these may have been buzzwords five years ago, the advent of machine learning has brought into existence new products that were not previously possible. An example of this is Hivery, a startup using AI to revolutionise how retailers use their space.

How do offshore investors view the Australian market?

Rick says there is growing international interest in Aussie startups and Australia is well and truly on the map. Typically, international investors come in the $7-$10 million fundraising round. While historically there have only been a handful of startups in Australia that get this attention, the number is growing fast.

How does Blackbird think about capital requirements for science ‘nonfiction’ companies?

A lot of these companies were prohibitively capital intensive five to ten years ago, explains Rick. Take space for example; it used to be solely in the sphere of the government, costing tens of billions of dollars. In 2020, Gilmour Space is trying to go to space for just $100 million. There is an opportunity for us to pool together capital with other investors and back these technical companies. The key is linking funding to certain milestones.

What are Blackbird’s plans in the next 5-10 years?

Blackbird wants to be a life-cycle investor. This means finding the best founders and writing them their first check all the way to backing them well past their IPO. For Rick, the goal is how can Blackbird hold its companies for decades as opposed to just 8-10 years. He also plans on Blackbird becoming the best community led investment firm in the world. “Blackbird was founded for founders and will never change that.”

Make sure to join us next year for Giants Weekly where we have more titans of industry sharing their insights with the Giants community. We’re back on January 12 with Merryn Clancy.