Blackbird vs Movac

Our definitive guide compares Blackbird and Movac by way of their respective investing approach, fund sizes, specific industries, experience and successes

Updated 16 March 2022

Summary:

Without a doubt, the top two active VC firms in New Zealand are Blackbird Ventures and Movac. The reputation, size and in-depth expertise of each fund significantly outperform any other VC fund in New Zealand.
As a founder, you will typically get one shot at pitching and going through the due diligence process with these firms, and you must nail it.
First impressions matter when it comes to VC firms. If you make a bad first impression, that can influence the partner’s follow-on funding decisions and future capital raise pitches.
Currently, there is very little advice on how to approach pitching to the likes of Blackbird and Movac – but as the most prominent VC funds investing in New Zealand businesses, being well-informed is essential.
This guide outlines and breaks down the two firms, how they invest, and what founders can do to optimise their chances of getting funding.

Our guide covers:

Disclaimer: This guide has been researched with the assistance of the New Zealand startup community. Elements of the contents are, in no uncertain terms, opinions based on particular founders and investors' experience. MoneyHub publishes this guide in good faith and makes startup-related guides and resources available free of charge to anyone who needs them. Nothing in this guide is investment, funding or financial advice in any form.

Blackbird - What You Need to Know

Background: As the largest Australian VC firm (and one of the "big three" alongside Airtree and Square Peg), Blackbird Ventures is one of the most active offshore VC firms in New Zealand. Blackbird set up a New Zealand subsidiary called Blackbird Ventures NZ in 2019 and have raised a $60M fund solely for investing in Kiwi founders and Kiwi startups.

Alongside this, Blackbird runs an Follow-On fund that allows Blackbird to in later stage rounds of their existing early stage investments (for example – they've continued to invest in Canva for 10+ rounds since their initial investment).

Fund history

Fund I (2012): $29m
Fund II: $200m
Fund III: $225m
Fund IV (2020): $500m (excluding $60m for their New Zealand entity and fund)

Blackbird has raised ~$1 billion+ across four funds, making it one of the most significant VC funds in Asia-Pacific. It is set up as an Early-Stage Venture Capital Limited Partnership (ESVCLP), meaning most investments will be domiciled in Australia.

Focus Areas

Blackbird has a strong focus on narrative-based companies. Whether plant-based foods, autonomous vehicles or pretty slides, Blackbird's focus on companies that typically do good for the planet and build on the brand.

Out of the New Zealand portfolio:

Ao Air is focused on clean air.
Mint Innovation recycles electronic waste.
Sunfed Foods manufactures plant-based meat products.
FreightFish build efficient, ethical hydrofoil freight carriers.
Multitudes pulls passive data to surface team performance and culture
Partly connects the auto parts market globally

While there are typical "VC" style SaaS investments (Ask Nicely, Multitudes, Canva etc.), many are driven by ESG-type investing. This is something to note when pitching to them.

Key Partners

Samantha Wong - General Partner
Prior to joining Blackbird, Sam co-founded a Startmate company, CapacityHQ, a professional services marketplace. Sam started her career as a corporate lawyer at Minter Ellison before career-pivotting to lead Product teams at SurfStitch.com, a multi-national e-commerce startup.

Phoebe Harrop - Associate
Phoebe was previously the director of growth equity at Generation Investment management in London and consultant at Bain & Company.

Summary:

The whole Blackbird team sit on the investment committee, including Rick Baker and Niki Scevak, who both have had experience building companies and investing in world class VC firms in Silicon Valley such as Benchmark.
Blackbird's community-first approach means founders can tap into a wide pool of founders, operators and LPs with deep expertise in their respective fields from enterprise software to deep tech. Blackbird's community is global and they believe the best advice to founders comes from other founders who are a few steps ahead of them.
Arguably, the partners at Blackbird have relatively less New Zealand experience than those of Movac. The partners typically have had shorter stints at various firms offshore and in different verticals but do not compare to the New Zealand-specific deep industry expertise that the operating and general partners at Movac have.
The overall Blackbird brand and return profile has been significantly larger at Blackbird (compared to Movac), potentially signalling that strong VC teams don't lead to outsized returns.

Blackbird Portfolio Analysis

Top portfolio companies: Canva, Culture Amp, Zoox, Redbubble and SafetyCulture.
NZ Investments include Ao Air, Mint Innovation, Multitudes, Ask Nicely, Freightfish, Partly and Sunfed Foods.

Anecdotal NZ Founder Stories:

Companies that exhibit "slow growth" have been rejected. Even within the Startmate programme they run, the selected startups have been turned away from investment from Blackbird for this reason.
Many NZ startup founders that are pre-revenue (early ideas or still developing the technology) have been funded. Partly – a parts marketplace, was pre-revenue when it was funded. Ao Air – an air filtration company, is also effectively pre-revenue at the time of investment. Multitudes is pre-product and pre-revenue as of April 2021.

Top 5 Things to Nail to Have the Best Chance of Investment From Blackbird

We talked to founders and investment specialists who suggested these tips:

Be bold. Blackbird is known to heavily emphasise founders with a large vision. If you've got big plans to dominate an industry and can accurately sell this to Blackbird, you're in a good position.
Focus on the story and narrative. They are less focused on ultra-high conviction and analysis but place a strong focus on the founder. Ensure your narrative is strong, your market is large, and you pitch well (e.g. Canva).
Engage early. Many of their deals are pre-revenue, so there's never a better time to build the relationship, even if you don't yet have customers.
Your brand matters. Blackbird is known to invest in startups with strong marketing that builds on their brand presence. Canva is a prime example of this.
Emphasise high growth. If you're not going to provide venture-like returns, you're unlikely to warrant investment from them. It doesn't necessarily have to be realised growth, but showing that your startup will grow fast in the future (and these assumptions are reasonable) are generally what Blackbird looks for.

Movac - What You Need to Know

Background: Movac is the largest New Zealand-based VC fund. They have had a long history of successful local exits and house some of the top industry experts in their fields. They typically invest in 3-5 businesses a year.

Fund history

Fund history

Fund I (early 2000s): <$10m
Fund II (2000-2010): $20m
Fund III (2012): $42m
Fund IV (2016): $110m
Fund V (2020): $250m

Movac has raised ~$400m over the last two decades. Movac invests its funds in New Zealand or New Zealand connected startups. A few companies in their portfolio are domiciled offshore but these always have a New Zealand connection (e.g. NZ founder or CEO living overseas).

Focus Areas

Movac has a wide variety of success stories across many verticals, including SaaS (Vend, Unleashed, Timely), Deep tech (PowerByProxi, Mint Innovation), Marketplaces (TradeMe) and Life Sciences (Aroa Biosurgery). This makes them a generalist investor and a potential source of capital for many startup founders.

Movac’s current Fund 5 ($250m) invests in technology businesses from Seed to Series B/C and beyond. It aims to have 25 portfolio companies in total and has two main investment criteria:

Early-stage ($20m to invest, 15 investments, $500k-$1m cheque size): pre/minimal revenue and/or undeveloped sales process. At this stage, Movac will generally “follow” another investor and usually won’t take a board seat. The focus for Movac at this stage is team, addressable market, and moat.
Later stage ($230m to invest, ten investments, $2m-$25m cheque size): >$1m of revenue and a repeatable, scalable sales process in place. Movac will “lead”, i.e. craft a term sheet, run the due diligence and take a board seat. Additionally, at this stage, Movac focus on scaling the business model and unit economics.

Key Partners

Movac Fund 5 has six "General Partners" who all run deals, take board seats, and together sit on the investment committee and make investment decisions.

Early-stage focus: David Beard & Lovina McMurchy
David and Lovina are common partners that early-stage startups will interact with when going through the investment process. David has 15 years of technology investment experience at Movac, including guiding PowerbyProxi through its 10-year journey from startup to acquisition by Apple. Before joining Movac, David was a SaaS CEO and entrepreneur. David has a particular interest in deep tech opportunities like Mint Innovation and NanoLayr, two of his current board appointments.

Lovina spent four years as General Manager of Amazon Alexa in the US, over a decade at Microsoft in Seattle as General Manager of Skype and spent several years at Starbucks as head of Venture Development. She graduated with an MBA from Harvard Business School and joined Movac as a Partner in 2020. Lovina is one of the most experienced technology operators in New Zealand.

Growth stage focus: Mark Vivian
Mark Vivian has more than 12 years of investment experience and, before joining Movac, had been in operational roles in highly successful startups that went from early stage to IPO on the NASDAQ and LSE. Mark was the founding CEO of Kea, the NZ ex-pat community and is deeply networked across the sector.

Generalists: Phil McCaw, Mark Stuart, Jason Graham
More details can be found here.

Operating Partners
Movac differentiates itself by offering its portfolio companies significant operational support from its experienced "Operating Partners" and "Executives in Residence", such as Jeremy Ginsburg. As an Operating Partner supporting Movac portfolio companies with in-house technical expertise, Jeremy is the hands-on support for companies to scale. Previously he's held software engineering roles at various technology firms in San Francisco, including Google, Twitter and Color. This deep industry expertise provides startup founders with links to Silicon Valley and critical feedback and product development advisory that, arguably, can't be obtained anywhere else in New Zealand. This level of industry knowledge is difficult to find, even with offshore investors such as Blackbird.

Movac Portfolio Analysis

The Movac Fund 5 current portfolio includes Tradify, Myia Health, Solve, Portainer, Yabble and Mint Innovation. It's worth noting that the last few deals (as of April 2021) have been made offshore (Myia Health and Solve) but in Kiwi founders. Additionally, the portfolio has deep tech with growth companies.

Movac has had some big wins:

Trade Me (Fund I) – NZX IPO (exited) then $2.6 billion sale to Private Equity.
Greenbutton (Fund II) – Sale to Microsoft for an undisclosed amount.
Aroa Biosurgery (Fund II & III) – IPO on ASX.
PowerByProxi (Fund III) - $300m sale to Apple.
Unleashed (Fund IV) – Sale to UK-based Access Group for $100m+.
Vend (Fund IV) – Sold to LightSpeed for c. $500m.

Looking at the biggest Movac exits, these span the deep tech, SaaS and Life Science sectors. This contrasts with other VCs who will typically focus on the software verticals.

Anecdotal Founder Stories:

A startup pitched to Movac in 2019 when they had just closed their seed round. They were too early and were rejected at that point. In 2021, they have just raised a round of capital from Australian and US-based VCs without the need to reach out to Movac. In this case, the company talked to Movac too early and potentially could have interacted 6-12 months after the seed round to familiarise Movac with the company and test the waters for the pre-Series A round.
Another startup interacted with Movac periodically while raising their pre-Series A round and were at a stage where they had a strong team and investment thesis. Movac subsequently invested at the end of the round.
A recent investment they've made on an EV/Revenue multiple of around 5x. This is typically lower than some of the other portfolio companies (implying slower expected growth). This mixed approach is relatively uncommon. Blackbird does not do this – they typically look for 10x+ investments on every investment they make.
Another example was a company that entered due diligence with Movac for 2-3 months, then ended up getting pushback from the Investment Committee. The decision ultimately falls on the Investment Committee members, and the deal leads may not necessarily be able to convince them to invest at the time of pitching.
Insiders' view: Be wary that the decisions are made independently of the deal team; rejection can be swift and unforgiving. This has happened with a recent pre-A investment recently.

Top 5 Things to Nail to Have the Best Chance of Investment From Movac

We talked to founders and investment specialists who suggested these tips:

Get your team right. Movac is very focused on team, product and technology and is known to reject companies without technical co-founders.
Build on your metrics. Movac focuses more heavily on metrics and traction than Blackbird and typically have a higher threshold for investing.
Pick the right sector. While there's not much you can do about this, recognise that Movac is known as a generalist investor with a track record of investing in SaaS, Marketplaces, Hardware.
Engage when other investors first. Movac doesn't lead with Early Stage deals and will walk away from deals, only to come back when a strong overseas investor has committed capital (this has happened with a Fund V portfolio company). As such, if you're able to establish a clear offshore lead, Movac is more likely to co-invest in the round. Furthermore, Movac is known to lead with Growth Stage deals.
Don't engage too early. Given the setup of their Investment Committee and due diligence process, engaging slightly later (i.e. at Series A rather than post-seed round) means you can put your best foot (and metrics) forward when pitching.

How Would Blackbird and Movac Help My Business?

There are many things Blackbird or Movac can do to support you (above and beyond investing in the round). Blackbird is one of the top VCs in Australia and is likely to set up warm intros for other VC funds.

Some of the non-investment related support Blackbird and Movac typically provide include:

General industry-specific strategic advice
Intros to other startups they've seen/invested in that may be potential customers or partners
Recommendations on pitch deck and financial model changes (for the other VC meetings)

While the New Zealand VC landscape is relatively small, other investors are out there and many are known to invest early. A common path for many startups is to raise a large enough angel round (from the likes of Enterprise Angels, K1W1, Icehouse, etc.) and reach a point where the business is self-sustaining and can attract offshore investors.

Blackbird and Movac are known for being flexible in their approach but are fairly standard when it comes to business models and industries they invest in (SaaS heavy, founder driven, strong metric businesses). It isn't the end of the world if you don't get investment from either of these.

To name a few successful New Zealand companies that have done well without either of these two:

AllBirds – backed by Lerer Hippeau.
Rocket Lab – backed by Icehouse and K1W1 before Bessemer invested.
Xero – backed by Peter Thiel's Valar Ventures and Matrix Capital.
Anaplan – Backed by US-based Shasta Ventures.
Kami – raised an angel round and took a small VC round led by NZGCP

Australian VCs.

A2 Milk – Listed on the ASX + NZX.
Vista Group – Listed on the NZX.
PushPay – Listed on the NZX.

All of the above companies have all taken different paths to success; getting funding from Blackbird or Movac was not one of them.

Blackbird vs Movac - Frequently Asked Questions

We can't anticipate the specific questions you'll likely have, but our selection of common queries below can help answer the basics.

I was rejected from Blackbird and/or Movac and am raising a follow-on round. Should I reach out again?

Yes - tThere is no reason why you shouldn't. Typically the analysts and managers at Blackbird and Movac will have their own opinions on a company and do most of the work when drafting the Investment Committee pitch. A lot of the reasons for rejecting a company can be biased depending on who sits on the Investment Committee, so while the firm as a whole may not be able to invest, things can change, and you never know what the committee will think in 12-24 months.

When should I reach out to Blackbird or Movac?

This depends on your startup. Some founders reach out very early when they're not investment ready and are likely to get good advice but no funding. Some reach out a little too late and end up not building the relationship early enough to create a meaningful connection (which can lead to weaker due diligence and pitching).

When it comes to Movac, we believe it pays to reach out slightly later than you would expect, given their focus on metrics and benchmarks. Given the early nature that Blackbird invests, industry insiders suggest to reach out slightly earlier than you think you need to, but keep in mind that if you're not "sexy", "exciting", or "high growth" enough, you're might be rejected.

What are the critical differences between Blackbird and Movac? Isn't VC just money?

It depends on what term sheets you get. Both firms have experience scaling into offshore markets and establishing follow-on funding, but nuances exist between them.

Movac has typically been able to exit their companies through IPOs, while Blackbird typically keeps companies private longer (which could come with benefits like better governance, faster growth etc.).
From a funding perspective, Blackbird has slightly deeper pockets.
From an expertise perspective, Movac has, arguably, slightly better industry knowledge.
From a return-profile perspective, Blackbird outperforms on an IRR basis.

Overall, we believe the differences are relatively small and what will likely matter more is how you feel when interacting with the partners and team. Each firm has flair, and different personalities will mesh well (or not so well) with your personality. This should be the overarching question when deciding who to take investment from.

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