Adelaide-based early-stage technology investment firm Eastend Ventures has achieved a $13 million first close for its initial fund.
Eastend is continuing fundraising targeting a $50 million final close.
The firm intends to invest Eastend Ventures Fund 1 in up to 30 early-stage, high-growth, business-to-business technology companies across South Australia, Western Australia and Queensland.
Co-founder Josh Garratt points out that the Eastend fund is the first South Australia-based fund to achieve full approval as a tax-advantaged (to investors) Early Stage Venture Capital Limited Partnership (ESVCLP), illustrating the lack of early stage funding available in the state.
He said: “Most ESVCLP investment is deployed to companies in Sydney and Melbourne due to their proximity to the major venture capital markets but, historically, some of the country’s most exciting companies and standout successes have started in out markets, companies such as Canva, Safety Culture and, more recently, the exited success story of Energy Exemplar [APE&VCJ, Nov 2023] in South Australia.”
According to the Venture Capital Dashboard published on the website of the Australian Department of Industry Science and Resources, in 2023-24, less than 10% of all ESVCLP investment flowed to South Australia (1.85%), Western Australia (1.06%), and Queensland (6.65%). More funding was channeled overseas (16.18%) than supporting these regions combined.
Eastend Ventures’ other co-founder, Canadian expatriate JD Sheard, said: “We’ve developed an early-stage fund to give investors access to overlooked, high potential markets and companies that remain underserved by the Australian VC industry’s old guard.
“When I moved to Adelaide, it was clear that talent, innovation and global ambition weren’t the problem. The real gap was access to capital; a problem we intend to help solve.”
Garratt founded South Australian investment network Southern Angels in 2018. The network has deployed more than $11.5 million into 35 early-stage companies.
Prior to immigrating to Australia, Sheard scaled and exited an oil and gas services and technology business that had operations in the US, UK, Canada and Australia.
Garratt and Sheard say their combined networks and experience are already delivering results with Eastend Fund 1’s first three portfolio companies demonstrating early traction, expanding into international markets and showing potential for liquidity within a realistic investment timeframe.
“Liquidity is a hot topic, and it’s something we take seriously,” said Sheard. “While we can’t promise fast exits, we assess liquidity pathways carefully as part of our diligence and only back companies we believe have a realistic chance of a timely outcome. Unlike many firms, we’re not chasing unicorns. We’d rather pursue achievable sub-$500 million exits and return capital within a reasonable timeframe to support our investors’ goals and the needs of the ecosystems we serve.
“That focus is already showing results. Our proof-of-concept fund (Fund 0) invested in 12 companies and is on track for its first profitable exit in under three years.”
The Eastend founders believe targeted and focused funds provide better alignment with early-stage investing outcomes, a view which is supported by PitchBook data which indicated that the median size of top-decile performance early-stage investment funds was $US38 million ($58 million).
Garratt said: “Our fund is designed specifically for the markets we know are underserved by early-stage investment. Raising a larger, later-stage fund wouldn’t serve the gap in the ecosystems we’re here to support. Bigger funds require bigger cheque sizes, which often push managers away from the truly early-stage companies that present the greatest upside. We’ve made a conscious choice to stay focused, size our fund responsibly, and back innovation in a way that delivers strong returns for our investors while creating lasting local impact.”
Strong support from South Australian individual investors had enabled Fund 1 to reach first close, Garratt said, and the firm was now fundraising nationally and internationally, with presentations to be made across Australia as well as in Singapore, Canada and the US.
Contact Garratt at: josh@eastend.vc
Image: Adelaide is underserved with early-stage venture capital funding although the city has been the birthplace of significant technology companies.