Main Sequence hits first close of $450M AUD for its third deep tech fund

Main Sequence, an Australian venture capital firm, said Wednesday it has raised the $450 million AUD (approximately $303 million) first close of its third fund.

The venture capital firm, founded by Australia’s national science agency CSIRO (Commonwealth Scientific and Industrial Research Organisation), has secured funding from new limited partners, including LGT Crestone, NGS Super, Daiwa Securities Group and the Grantham Foundation, as well as returning backers Hostplus, Temasek, Australian Ethical Investment and Morgan Stanley Wealth Management. The third fund will include CSIRO’s first half of the committed $150 million AUD investment announced by the federal Australia’s Economic Accelerator program.

Including the recent capital, Main Sequence now has more than $1 billion AUD in assets under management. The firm, which did not provide the final targeted size it expects to reach, says it will complete the third fund by the end of this year.

With the third fund, the firm plans to make approximately 25 pre-seed and Series B investments, partner of Main Sequence Gabrielle Munzer said in an interview with TechCrunch, adding that there are no specific figure amounts for minimum to maximum investment, but it could start from $100,000 AUD.

“We see incredible promise in pre-seed investments,” said Munzer. “We are continuing to harness the forces of entrepreneurship and research to address the ‘Valley of Death’ [between research and commercialization].”

The firm works closely with universities to seek out potential researchers and scientists and to build their technology from scratch through its “venture science” investment model. That means it empowers scientists to transform technology in the research stage into real-world solutions.

To boost the technology sector, the Australian government has introduced financial incentives, which have supported tech startups in fundraising, product development and market launches. Main’s involvement with government agencies, including CSIRO’s On Accelerator and Australia’s Economic Accelerator, as well as university accelerator programs like UNSW Founders’ SynBio 10x program, enables the VC firm to discover cutting-edge technology developers, the company says.

With its mission to find solutions to planetary problems like decarbonization and feeding a growing population, the new fund will zero in on decarbonization and deep tech companies.

“First, decarbonisation — we want to ensure more translation of climate research into the solutions urgently needed to address our environmental impact,” Mike Zimmerman, partner at Main Sequence, said in a statement. The firm will continue to back deep tech startups that build technologies central to Australia’s national interest, including cybersecurity, quantum computing and advanced semiconductor technology.

“Our focus remains on big, global challenges that need scientific backing, patient capital and long-term vision to solve,” said Zimmerman.

Launched in 2017, the deep tech–focused venture capital firm has supported 53 companies, mainly in Australia, creating more than 2,100 new jobs. Main Sequence previously set up two funds — the $240 million AUD original fund, CSIRO Innovation Fund 1, in 2018, and the $330 million AUD second fund, CSIRO Innovation Fund 2, in 2021. Its portfolios include companies like Regrow, Advanced Navigation, Gilmour Space, Samsara Eco, Endua, MGA Thermal, QuintessenceLabs and Q-CTRL.

“Our last fund saw the launch of five venture science startups — Endua, Eden Brew, Quasar Sat, Cauldron and Samsara Eco,” Munzer said. “We are keeping up this momentum with Fund 3, pioneering new frontiers in biotechnology and plan to continue co-founding new companies at the bleeding edge of exciting advances in food and fibers with Fund 3.”

“Deep technology (deep tech) companies have the potential to deliver strong long-term returns on behalf of our members whilst aiming to provide solutions to societal, technological or ecological problems,” Sam Sicilia, chief investment officer of Hostplus, said.