BetterLabs expands fund to $23m

BetterLabs Ventures, RAC’s early stage seed fund, has become WA’s largest venture capital fund with the announcement last night that it had expanded to $23 million.

The fund, which launched in 2018 with $3 million in seed funding, has supported startups such as SpacetoCo, Complete Home Filtration (Environmental Water Solutions) and Power Ledger since its inception.

SpacetoCo, which received an undisclosed amount of funding from the fund in September, offers a space sharing platform as its service and was founded in 2017.

Complete Home Filtration was founded in 2014, while Power Ledger, a blockchain-enabled energy trading company, was founded in 2016.

Last night’s announcement means the fund will now provide later-stage Series A/B funding for local companies, with RAC estimating its investments will be between $300,000 and $3 million apiece.

RAC chief executive Rob Slocombe said the fund’s expansion had occurred on the back of enormous popularity, with 150 startups applying for funding in 2019. 

“BetterLabs has received an incredible amount of interest since it began and we’ve been fortunate to be able to support and partner with some of WA’s most innovative start-ups,” Mr Slocombe said.

“By expanding the investment fund to $23 million we aim to provide new opportunities for start-ups to make a positive impact in WA.”

The extra funding marks a big development for WA's tech start-up scene, as the state has lacked formally-established venture capital funds.

The few examples include Go Capital and Yuuwa Capital, which are no longer making new investments.

Private investors, including family offices, have been a bigger source of venture capital in the WA market. A notable example is Larsen Ventures, established by Navitas co-founder Peter Larsen and led by his son Andrew Larsen.  

Larsen Ventures investments include HealthEngine, uBeam, Humm and Vend. It was also a major backer of Education Horizons Group and its subsidiary SEQTA Software, but exited last year when Potentia Capital acquired a majority stake in EHG. 

An even larger source of capital for WA start-ups, particularly those seeking later-stage growth capital, is an ASX listing. The latest example is iCetana, which listed on the ASX last December after raising $5 million.

Another funding source that has emerged in the past year is equity crowdfunding. Fremantle-based ebike developer Tiller Rides raised in excess of $1 million last year through an equity crowdfunding campaign backed by more than 200 small investors.

Federal funding is also available through the Accelerating Commercialisation program, which awarded $2.2 million in matched funding to five companies in 2019.

Derek Gerrard, who founded Go Capital Australia and serves as entrepreneur-in-residence with startup accelerator Plus Eight, will continue to serve as BetterLabs Ventures' lead director.