Emerging VCs fear big super stranglehold over startup ecosystem
Smaller startup investors say super funds' support for a limited number of Australian firms risks creating a "VC oligopoly".
Emerging venture capital managers have raised concerns about the influence super funds have gained over the local startup ecosystem, warning the concentration of their support behind a handful of investment firms risks creating an oligopoly in the VC sector.
The role of super funds in the ecosystem moved into sharp focus this week due to an adjacent dispute between megafund Hostplus and local startup Employment Hero. Both have accused each other of acting in self-interest in a disagreement around whether advertising of super funds should be allowed on workplace platforms.
Hostplus called for Employment Hero’s CEO Ben Thompson to be removed, and Thompson fired back questioning whether Hostplus’ should be investing in startups. But the flare-up comes as smaller and emerging funds raise broader questions about whether super funds' support for a limited number of established funds is distorting the market and leading to a “two-tier VC” ecosystem.
Hostplus, described by one VC partner as a “ten thousand pound gorilla”, has strongly positioned itself as a champion of VC and startups. But that support has been confined to well-established funds with a track record such as Blackbird, AirTree Ventures and Square Peg Capital.
