Main Sequence Ventures raised $450 million for its third investment fund, bringing the venture capital firm’s total funds under management to more than $1 billion for the first time.
The federal government committed the first $75 million of $150 million in deep tech VC funding through the Australia’s Economic Accelerator program. The remaining $75 million is earmarked for investment in Main Sequence’s future fourth fund.
Returning investors from Main Sequence’s $330 million second fund include Singapore-based Temasek, Hostplus, and Morgan Stanley Wealth Management. The second fund closed in 2021, while the original $240 million closed in 2018.
Among the other new and returning are NGS Super, LGT Crestone, Australian Ethical Investment, The Grantham Foundation, and Daiwa Securities Group, which marks the first Japanese investment in a Main Sequence fund.
The CSIRO-founded venture capital firm has raised $150 million more than it was reported to be targeting last September. Main Sequence manages the CSIRO Innovation Fund on behalf of the national science agency.
CSIRO founded Main Sequence Ventures in 2017 to invest in innovative startups and help bridge the funding ‘valley of death’ for deep tech companies on the path to research commercialisation. This included a $100 million investment from CSIRO and the federal government in the original fund.
Main Sequence has invested in 53 companies with a collective market value of more than $6.8 billion since it was founded, which has created around 2,100 jobs. This includes quantum firm Q-CTRL, navigation and robotics technologies firm Advanced Navigation, and agriculture emissions data platform Regrow.
Main Sequence partner Mike Zimmerman said that investments through the third fund will be guided by two key imperatives.
“First, decarbonisation – we want to ensure more translation of climate research into the solutions urgently needed to address our environmental impact,” Mr Zimmerman said.
“Alongside this, we are advancing critical technologies central to Australia’s national interest including cybersecurity to protect citizens and infrastructure, quantum computing to unlock new possibilities, and advanced semiconductor technology to fuel innovation.”
“Our focus remains on big, global challenges that need scientific backing, patient capital and long-term vision to solve. The community we have created around this mission cares deeply about finding and scaling solutions to planetary problems like decarbonisation, feeding a growing population and enabling the next intelligence leap.”
Investments aren’t just made in existing companies, but also through a ‘venture science’ model for early-stage commercialisation, where novel research is identified as having commercial applications and a startup is founded with Main Sequence support.
Main Sequence partner Garbielle Munzer said five venture science startups were launched under the venture capital firms second fund. These included plastic recycling firm Samsara Eco, hydrogen power bank firm Endua, and space communications firm Quasar Sat.
“We are keeping up this momentum with Fund Three, pioneering new frontiers in biotechnology and plan to continue co-founding new companies at the bleeding edge of exciting advances in food and fibres with Fund Three,” said Main Sequence partner Gabrielle Munzer.
“We are continuing to harness the forces of entrepreneurship and research to address the ‘Valley of Death’. We see incredible promise in pre-seed investments and our involvement with Australia’s Economic Accelerator, CSIRO’s ON Accelerator and University accelerator programs like UNSW Founders’ SynBio 10x program means we can deepen our focus on unearthing cutting-edge ideas.”
Daiwa Capital Markets Australia chief executive Susumu Handa said he hopes the investment can serve as a bridge between the Australian and Japanese startup ecosystems.
“We can’t wait to work with partners who have passions for global challenges like decarbonisation, food, healthcare, space, and more,” Mr Handa said.
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