Australia's EVP hits $37m first close on Fund III

Australia’s Equity Venture Partners (EVP) has reached a first close of A$50 million ($37 million) on its third early-stage B2B software fund.

A target of A$75 million is expected to be reached next year, according to The Australian Financial Review. The VC firm said it now has more than A$100 million under management.

Fund II closed last year at A$35 million, sourced primarily from high net worth individuals (HNWI). EVP’s debut vehicle launched in 2016 in partnership with Microequities Asset Management and went on to raise A$25 million. Both EVP and Microequities, which also manages funds for HNWIs, contributed to the fund, with the latter committing at least A$2.8 million.

Like its predecessors, Fund III will focus strongly on enterprise-facing technology, including subscription software, which EVP has identified as a resilient model during COVID-19. Of the 11 companies in Fund II, only one is yet to return to pre-pandemic revenue levels, according to a statement. Across the portfolio, the median growth rate for the year is nearly 100%.

“We invest at the Series A stage, when there’s product in market, strong customer validation and a healthy early trajectory of revenue growth. This allows us to make high conviction investments, acquire meaningful equity positions and build concentrated portfolios of high growth businesses,” Howard Leibman, a co-founder of EVP, said.

“We typically see substantial valuation uplift at the Series B stage, when large US growth equity funds begin to participate. Across the EVP portfolio, we’ve seen four such transactions over the past 12 months.”

EVP has made 29 investments in total, with the standout being Deputy, a workforce management services company that has raised more than $100 million, including an $81 million Series B round in late 2018. There have been four investments so far from Fund III. Leibman claims that all four have benefited from the pandemic, having “materially accelerated through 2020.”

Leibman, formerly a tech-focused investor at Emerging Growth Capital, set up EVP in 2011 with Les Szekely, a local angel investor. The firm now has an investment team of six, with complementary financial, operational, and legal backgrounds. Both co-founders hold board positions with several portfolio companies, including Deputy, where Leibman is a director.