A group of Australian tech entrepreneurs has launched Glitch Capital, a US$50 million venture capital fund designed to support local start-up founders.

The fund is backed by over 15 founders of billion-dollar start-ups, including Andrew Barnes of Go1 and Sam Kroonenburg of A Cloud Guru.

Glitch Capital is marketed as Australia’s first founders fund, managed by former start-up founders.

The investment committee includes Leigh Jasper, Sam Kroonenburg, and Ryan Fitzpatrick, with Jo Lanyon serving as the investment principal.

Notably, 70% of its capital comes from successful entrepreneurs instead of traditional sources like family offices or investment firms.

The fund intends to invest in companies with revenues between US$2 million and US$10 million but will not typically lead funding rounds.

Its initial investment was made in Cadmus, a Melbourne-based edtech company offering an online assessment platform for higher education.

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🔗 Source: Australian Financial Review

🧠 Food for thought

1️⃣ Founders funds emerge amid Australian VC sector consolidation

Glitch Capital’s establishment reflects a counter-trend in Australia’s venture capital landscape, which has experienced significant consolidation since 2022.

While only seven VC firms have closed new funds in 2024 (compared to more than 30 annually in 2020-2022), Glitch managed to raise $50 million in less than six months, demonstrating the appeal of founder-led investment models 1.

This comes as Australia’s overall VC market has matured substantially, growing from just $244 million invested in 2012 to $2.4 billion in 2021, creating a larger pool of successful founders able to reinvest in the ecosystem 1.

The broader Australian startup funding environment has shown resilience in 2024, with 414 deals totaling $4.0 billion recorded across the country, marking the third-highest annual total on record despite the funding challenges for new VC firms 2.

Glitch’s focus on companies already generating $2-10 million in revenue reflects a shift toward more sustainable business models in the post-2022 funding environment, where investors increasingly prioritize demonstrated traction over speculative growth.

2️⃣ Operational expertise becomes a key differentiator for Australian VCs

Glitch Capital’s founder-centric approach represents a growing recognition that operational expertise is becoming as valuable as financial capital in the Australian VC ecosystem.

The fund’s value proposition, providing access to founders who have navigated similar challenges, directly addresses Leigh Jasper’s observation that Aconex might have avoided key mistakes if they’d had experienced operators as advisors during their growth phase.

This trend parallels approaches seen at established firms like AirTree Ventures, which emphasizes long-term partnerships with founders throughout their journey, providing not just funding but strategic guidance from those with relevant experience 3.

Australia’s maturing startup ecosystem, with its growing number of unicorn companies, has created a critical mass of operators with firsthand experience scaling businesses—a resource that was largely unavailable to the previous generation of Australian founders.

The involvement of institutional investors like AustralianSuper in backing founder-led funds signals growing confidence in this model, potentially creating a cycle where operator expertise enhances returns, attracting more capital to the Australian innovation economy 3.

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