South Australia has a new early-stage VC fund to back B2B startups

Adelaide VC Eastend Ventures has secured $10 million in commitments for its debut fund, which will be the first in South Australia as an Early Stage Venture Capital Limited Partnership (ESVCLP).

The $50 million Eastend Ventures Fund 1 intends to invest in up to 30 early-stage, high-growth, business-to-business (B2B) startups across South Australia, Western Australia and Queensland.

The announcement comes three weeks after the South Australian budget announced that the state government will contribute $50 million to establish a new local early-stage VC fund.

The ESVCLP structure supports early-stage investment through tax exemptions and offsets. Eastend Ventures cofounder Josh Garratt said with other ESVCLP funds based Victoria and NSW, less than 10% of that investment flowed to startups in South Australia (1.85%), Western Australia (1.06%), and Queensland (6.65%). 

“Most Australian ESVCLP investment is deployed to companies in Sydney and Melbourne due to their proximity to the major venture capital markets,” he said.

“But historically, some of the country’s most exciting companies and standout successes have started in our markets, companies such as Canva, Safety Culture and, more recently, the exited success story Energy Exemplar in South Australia.”  

Garratt who also founded Southern Angels, the South Australian investment network that’s deployed more tha. $11.5 million into 35 early-stage companies since 2018, launched Eastend with Canadian entrepreneur JD Sheard, and they’ve already invested in three startups – martech Heatseeker, Priori Analytica and tradie app Jack – from fund 1. 

Sheaers says it’s not about finding “unicorns” – startups with a valuation above $1 billion.

“We’ve developed an early-stage fund to give investors access to overlooked, high-potential markets and companies that remain underserved by the Australian VC industry’s old guard,” he said.

While we can’t promise fast exits, we assess liquidity pathways carefully as part of our diligence and only back companies we believe have a realistic chance of a timely outcome. Unlike many firms, we’re not chasing unicorns. We’d rather pursue achievable sub-$500 million exits and return capital within a reasonable timeframe to support our investors’ goals and the needs of the ecosystems we serve.

“That focus is already showing results. Our proof-of-concept fund (“Fund 0”) invested in 12 companies and is on track for its first profitable exit in under three years.” 

Garratt said the fund is designed specifically for markets underserved by early-stage investment.

“Raising a larger, later-stage fund wouldn’t serve the gap in the ecosystems we’re here to support. Bigger funds require bigger cheque sizes, which often push managers away from the truly early-stage companies that present the greatest upside,” he said.

“We’ve made a conscious choice to stay focused, size our fund responsibly, and back innovation in a way that delivers strong returns for our investors while creating lasting local impact.”

Following the first close, the VC is now hunting for the remaining 80% of the $50 target from investors in Australia, Singapore, Canada and the US.