Our approach to investing remains long-term, backing big ideas grounded in research that can drive breakthrough impact. Our new fund will focus on solving in two key areas. First is decarbonisation — translating more climate research into urgently needed solutions — great examples in earlier funds are Regrow, Loam Bio, Avarni and MGA Thermal. Second is advancing critical technologies central to Australia’s interests like cybersecurity, quantum computing, robotics and semiconductors that will shape our future — such as Advanced Navigation, Q-Ctrl, Millibeam and Emesent. This new Fund will help us further propel companies grounded in research to accelerate change in these much-needed areas.

We will also continue ramping up our Venture Science model — launching companies from scratch. Our last fund saw the launch of five Venture Science startups — Endua, Eden Brew, Quasar Sat, Cauldron, and Samsara Eco. Now, we are pioneering new frontiers in biotechnology, co-founding three companies poised to pioneer new advances in food and fibres.

Recognising the potential of turning Australia’s world-leading research into impactful global companies, we’re fortunate enough to have the continued support of Hostplus, Temasek*, NGS Super, Aussie Ethical Investment and Morgan Stanley’s Wealth Management Group as investors in Fund 3. We are also welcoming leading global investors such as LGT Crestone via its wealth management arm, our first Japanese investor Daiwa Securities and leading global climate investor, The Grantham Foundation. Their interest in companies powered by Australia’s research is significant, and we look forward to collaborating with them and other international organisations to help the Main Sequence portfolio bring the best solutions to market.

Closer to home, the new fund includes the first half of the $150 million AUD committed by the Australian government as part of Australia’s Economic Accelerator, reflecting strategic alignment with the National Reconstruction Fund’s priorities of diversifying and transforming the economy.

With the support of our investors, we have the resources to build companies through their proof of concept to planetary scale, continuing to double down on companies we’ve already invested in as well as new companies from our Opportunity Fund or via our LPs.

As fellow Partner Gabrielle Munzer explains, Main Sequence was created to invest early and help pull companies past the Valley of Death. Our first and second funds have backed 53 companies, who have gone on to create more than 2,100 jobs and have a combined market value now over $6.8 billion AUD. Importantly, these companies are true world leaders in their field, delivering concrete solutions to big problems in dozens of countries around the planet. We’re hopeful, Fund 3 will have the same outweighed impact on the world.

The challenges we face demand bold ideas and patient nurturing. With our latest fund, we will keep pioneering solutions from lab to global impact, shaping a sustainable future.

If you’re an entrepreneur or investor that resonates with this mission, we’d love to hear from you. Because it’s only by working together that we can build more companies that harness the forces of entrepreneurship, science and research to deliver solutions at scale to the planet.

*Subject to satisfaction of customary regulatory approvals.

Increasingly, we are seeing the essential role the food system can play in our mission to Decarbonise the Planet while scaling to Feed 10B People by 2050. The companies we’re most excited by — and the ones getting the most traction — have figured out how to work across the supply chain, creating significant value to multiple segments, and using that value to incentivise participation and overcome barriers to adoption. With the enormous hype — and concurrent confusion — in the carbon economy, solutions need to be underpinned by credible science, with rigorous measurement and verification.

When we first met Guy, Tegan and the rest of the Founders from Loam Bio (then Soil Carbon Co), we absolutely loved their ambition. Moreover, despite the breakthrough nature of Loam’s science and technology platform, the team were grounded in pragmatism; they knew they would have to demonstrate the value in extensive, independently managed trials. Their core business model requirement was to deliver the solution in a way that could be adopted at scale.

As Guy says, “We’re working with the world’s largest terrestrial carbon sink”. Tapping into our existing agricultural infrastructure and expertise, and a deep knowledge of microbial science, means we can use what we already have to create immense progress in our climate goals, while other systems come into play.

Fast forward to today and we couldn’t be more pleased with the progress and the shift in focus with the commercial launch of CarbonBuilder (soil-carbon-building microbial inoculum) and SecondCrop (farmer-friendly carbon projects). These products essentially give farmers the ability to multiply the amount of carbon sequestered in the soil, along with a market mechanism to benefit from that carbon with fewer risks than traditional carbon credit projects.

To turbocharge this, Loam is announcing their $105m Series B round led by our friends at Lower Carbon Capital and Wollemi Capital, along with Main Sequence and other existing investors. We are proud to be doubling down on this investment, having as much conviction as ever on the potential for agriculture to solve climate change, and Loam’s potential for true gigatonne-scale carbon removal.

Loam Bio: Giga-ambition to take on Planetary Challenges… was originally published in Main Sequence Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

With global GDP is set to double by 2050, our “Supercharge Industrial Productivity” Challenge focuses on backing transformational companies that help meet our planet’s surging demand for economic production, while doing so efficiently, reliably and most importantly sustainably.

RIOS, who today announced their US$28m Series A led by Main Sequence, is helping us get there.

Of course we are bullish on entirely new clean and green solutions, whether for energy (Endua) or protein (v2, Eden Brew), but we also need solutions that modernise and improve our existing industries. I know first hand (as both a founder and investor) that to do this well is really hard, and requires much more than great technology (and there’s a lot more to say on this topic, so I’ll come back to it in a future post).

RIOS deploys world-leading robotic “workcells” for manufacturers to help them scale reliably to meet their growing demand in the face of labour shortages and attrition. Workcells replicate specific and discrete processes in a production line, automating the work of up to 2 people. Workcells are deployed as needed, so customers can rollout the solution as needed vs. committing to end to end automation all at once.

The RIOS solution is powered by the world’s most advanced gripper and touch sensor technology and a computer vision / AI stack to ensure speed and adaptabilty to different product lines in food, consumer products, biochemical and agricultural industries. Their lineage includes technology spun out from Stanford and a founding team from Xerox PARC, as they are now working with several Australian public research organisations to accelerate their product roadmap and enter the Austalian market.

Their business model is as exciting to us as their technology: RIOS offers their solution “As A Service” to customers who pay per hour with no capex . The “As a Service” business model is a great one for addressing a lot of the big hurdles with deeptech adoption, and several of our other companies such as Emesent and Lumachain are employing that model with great success.

RIOS stood out amongst the numerous robotics companies we’ve looked at for their combination of world-class team, led by founder Dr Bernard Casse, scalable technology, huge market and of course business model.

And as a result, customers we spoke to said things like “no brainer” and “we will buy these as fast as they can roll them out”, which is always great to hear!

Our investment in RIOS is also well aligned with Australia’s Modern Manufacturing Strategy, which lays out how Australia can establish a more competitive and resilient manufacturing sector. Key pillars of this strategy include backing digital transformation and establishing supply chain resilience, both of which are core capabilities for RIOS, especially in the food & beverage sector which is also an Australian National Manufacturing Priority.

We love the Robotics As A Service (RaaS) model. If you are helping tackle the Supercharge Industrial Productivity Challenge in a valuable way, we’d love to hear from you. Contact us here or reach out to me directly.

RIOS: Bringing Manufacturing into the 21st Century with Robotics as a Service was originally published in Main Sequence Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

In venture investing there’s often a debate about the weight that should be placed on markets vs. founders: is it better to back a great founder in a challenging market, or a mediocre founder in a terrific market? With Regrow.Ag I’m learning about the magic that happens when both are great.

Markets
In the shadow of the IPCC Report released earlier this month, more than ever we need meaningful, scalable solutions to halt our planet’s otherwise inevitable path to 1.5 degrees. Thankfully, more and more companies across our Feeding 10B People, Decarbonise the Planet and even our Supercharge Industrial Productivity Challenges are developing solutions that slow or reverse the impact of climate change. And we think the timing is great, because for the first time, mainstream corporate interests are lining up with consumers and most developed nations to take “sustainability” out of the fringes and into the core operations — and importantly, the budgets — of large enterprises. While idealists would like to think corporate leaders have “seen the light” on sustainability, climate change and ESG generally, the reality is we have our large institutional investors like Black Rock to thank for putting the topic on the Board agenda of every significant listed company, and increasingly tying executive pay to achievement of these goals. However we are getting there, the important thing is that commercial pathways for these clean green and sustainable solutions is stronger than it’s ever been.

It’s not to say there aren’t issues, and Regrow Ag is tackling a huge one. We know that agriculture represents 20–25% of emissions and for reasons above, increasingly retail, CPG and food companies are looking for — and willing to pay for — sustainably sourced products that decrease the industry’s contribution to GHG. Through our work with research institutions, corporate co-investors and portfolio companies, we are seeing many experiments and programs globally as players try to identify cost-effective ways to scale the impact. One of the biggest challenges: how to deliver a low-cost, accurate way to measure, report and verify the results from these programs that allows producers to benefit from sustainable practices and buyers to legitimately demonstrate the results.

Enter Regrow Ag. Regrow’s history as leading crop analytics company FluroSat gave the Company great insight into farming workflows, a huge amount of farm data, as well as the value of infusing science into its platform to improve impact and adoption. When FluroSat acquired Dagan to become Regrow, it brought together world-leading sustainable ag and soil carbon measurement science (led by the “Soil Whisperer” Bill Salas) with a scalable, proven farming analytics platform. In a few short months the world-leading team has been humming, and has released a unique and powerful MRV (Measurement Reporting and Verification) suite that helps producers, food brands and ecosystem market makers scale their sustainable ag programs. You will see some massive announcements in the coming months as this platform is rolled out to the industry, and the Series A round with a very aligned and strategic set of co-investors such as Cargill, Microsoft M12, Grantham’s NCO Fund and Ajax Strategies is a testament to what’s coming.

Founders
I first met Anastasia Volkova, Founder and CEO of Regrow.Ag in an accelerator mentoring session in May 2017, even before we had launched Main Sequence’s first fund. In typical Anastasia fashion, she had researched the mentors coming along that day and because of my prior work experience, sought me out to ask for input on her business idea, developed as part of an entrepreneurship program while doing her PhD in Aeronautical Engineering at Sydney University. By the time we came to lead the pre-seed round into FluroSat in late 2017, I knew we were backing someone special.

Anastasia embodies a number of traits that now set the bar for me in evaluating Founders:

• Deep understanding and passion about her problem space
• Desire to learn and grow over ego
• Huge ambition to win and courage to make big bets

In deep tech, you need to walk the fine line between being a credible expert in a domain or technology area, and being a “Learner” that will suck information and insights from every nook and cranny you can to predict where a market is going and what it takes to win. It’s tricky because the balance requires humility, self-awareness and the cliched “growth mindset” that desires knowledge over being right.

I got a view into Anastasia’s ambition in the early days and it has only increased in the four years since we met. Anyone who knows her understands this, but I think the best overt examples of the trait are the two acquistions we completed in our young company’s life:

• As a small, pre-seed stage company, acquiring ProductionWise from Grain Growers to increase their customer and data footprint, accelerate their product roadmap and scale the team significantly; and
• Dramatically “betting the company” on the acquisition of Dagan, joining forces with Bill Salas and planting a huge stake in the ground with her conviction in the consolidation of farming and sustainability, and the potential value to be delivered to the market.

With the above context, it should be no surprise that we doubled down (actually tripled down) by co-leading Regrow’s US$17m Series A. We are excited to be a partner with Anastasia, the amazing team at Regrow and our co-investors as we go on the journey to sustainable agriculture.

Regrow.Ag: Doubling Down on Markets and Founders was originally published in Main Sequence Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

In 2017, our team at Main Sequence came together to partner with CSIRO, Australia’s world-renowned science agency, to solve the world’s biggest problems by turning science and research into breakthrough companies.

We were filled with the excitement, ambition and conviction of founders. However, also like the founders we back, our thesis was unproven, relying on a belief that the raw ingredients of Australia’s leading research ecosystem could valuably solve the world’s growing need to do something dramatic to change the shape of humanity’s curve.

We were incredibly fortunate to have the support of CSIRO and the Federal Government, to begin our journey in 2017 with a $100m first close of the CSIRO Innovation Fund 1. After many, many pitches, we found true partners and believers in Hostplus, Temasek, Lockheed Martin, Horizons Ventures, among others, taking us to a final close of Fund 1 of $240m in 2018.

Today we are announcing Main Sequence’s CSIRO Innovation Fund 2 of $250m to continue our mission.

We are incredibly grateful for the continued support of all of our major Fund 1 investors, who are joined by Mutual Trust and Morgan Stanley’s wealth management arm. A major milestone for Main Sequence is that Fund 2 is 100% supported by external investors.

It is said that “your portfolio is your strategy”, and the strong performance of our amazing Founders in our Fund 1 portfolio of 26 companies is a crucial reason for our success. Just like our investors, these Founders have taken a leap of faith to partner with us for their ambitious journeys to tackle the major challenges facing the world in health, food, space and heavy industries and they are well on their way!

As far as our plans for Fund 2, our strategy from Fund 1 continues:

• Backing deeptech founders with global ambitions;
• Investing at the earliest stages of a company’s life, often as the first institutional check or a co-founder;
• Supporting companies either originated in or collaborating with Australia’s research ecosystem; and

Building solutions that address our Challenges:

• Feed 10 billion people — planet-proofing the global food system
• Reach humanity scale healthcare — democratising health access for everyone
• Supercharge industrial potential — augmenting our biggest industries
• Enable the next intelligence leap — giving society the tools to adapt to the future
• Bridge the gap to space — unlocking the benefits of space for humanity’s gain
• Decarbonise the planet — reversing our climate impact

What you’ll see more of from us in Fund 2:

• A focus on our unusual but powerful Venture Science model. This company creation model starts by identifying an epic global challenge and opportunity, assembling the science capability to tackle it, introducing a pathway to market through a leading industry player, and injecting venture investment to launch a brand new company; and
• An increased emphasis on the challenge of Decarbonisation, reflecting the massive momentum from governments, companies and institutional investors on finding scalable solutions;

Finally, there are lots of ways to work with us or support our mission:

• Join one of our amazing companies — please check out our Jobs Board on our website
• Join our team. If you’re interested in being part of Main Sequence, contact us;
• Join our community to help us solve these Challenges; follow us or sign up for our monthly newsletter;

In 2017 we had a conviction that the most valuable companies for the decades to come will be grounded in science and be going after epic solutions for a planet in trouble.

I think we were right.

The Next Leap in Solving The World’s Greatest Challenges: Our $250m Fund 2 was originally published in Main Sequence Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

Background — The vast majority of traffic on the internet is actually non-human, with “bots”– automated computers and phones — clicking, scraping, probing and pretending to be people. These increasingly sophisticated bots are used to commit a wide range of fraud and other online attacks around the world, damaging brands and financial performance. Kasada has created Polyform, a browser-based service that helps businesses fight back against bots, stopping attacks cold, reducing fraud losses and infrastructure costs.

Founder — At Main Sequence, a key investment thesis anchors around a Company’s Founder, and Sam Crowther is no exception. Sam is a deep security expert who first worked at the Australian Signals Directorate (the Australian version of the US’s NSA) at the age of 15. He left university in late 2014 to start Kasada along with his father Greg, an experienced executive who handles business operations. Sam created the vision for Polyform and leads both the technical architecture and product engineering. He loves nothing more than spending time with CISO’s (Chief Information Security Officers) of customers to understand and solve their problems, and based on their traction and feedback from customers, Polyform is doing just that.

Problem Being Solved — Bots can be “good”, like those that refresh your Facebook page or figure out how useful your website might be to Google users. However, bots are also used to commit online fraud, steal valuable content, and overload servers to shut down websites. As much as 70% of traffic to e-commerce or financial websites is malicious bot traffic. This is now causing concerns in the C-suite and boardrooms due to fraud, data breaches and corporate brand damage. Despite in-house security teams at larger enterprises and a number of large vendors of Web Application Firewall (WAF) and other web-based threat prevention services today, attacks are still rampant and several acute pain points still exist in the enterprise:

1. Sophistication of attacks are increasing, “upping the ante” as vendors and criminals attempt to outflank each other;
2. Existing solutions like WAFs are complex to setup and maintain, and require constant updating and tuning of rules;
3. Well-trained IT security professionals are expensive and hard to find, especially for mid-market enterprises.

“Pain Relief” Solution — In response to the pain points above, Kasada created Polyform, a web-based service which identifies and prevents malicious bot attacks on web applications, while still letting good bots and humans through. The SaaS application is sold on a monthly subscription basis, and immediately stops fraud /disruption in its tracks, decreases web infrastructure costs and requires very little ongoing management resources. Polyform is easily implemented by a customer re-routing client web traffic through the Polyform servers on Amazon Web Services. Polyform then detects and blocks malicious web traffic, letting the good bots and human traffic through to the customer website. Polyform uses a combination of device fingerprinting and behavioural techniques to distinguish automated vs. human behaviour and filters it in real-time. Polyform employs a novel “proof of work” challenge which requires the attacking computers to complete increasingly difficult calculations, sucking processing / memory resources and making it uneconomic to continue the attack. In other words, attackers must spend more money if they want to keep attacking Kasada clients.

In our due diligence, we spoke to large, sophisticated customers who described a common experience: Before Kasada, they had tried other solutions from well-known vendors, but continued to be impacted by attacks, and continued to need internal security teams to update the rules and parameters of these systems. We talked to one of Australia’s top retailers whose website was taken offline for a number of hours from a bot-driven denial of service attack. Kasada implemented Polyform in less than 3 hours, which immediately stopped the attacks without requiring ongoing involvement of security teams.

Traction — Kasada has been in the market with its current version of Polyform since early-2018. Between our first meeting with the team in December 2018 and the close of our financing in April, they doubled MRR (Note to Founders, don’t underinvest in sales while you’re raising…it’s very powerful to have good news to share while engaging with investors). They have a blue-chip list of customers in AU and increasingly, in the US.

Market Opportunity — The Bot mitigation market is growing rapidly, with a combined market in the billions and growth rates above 20%. As more of the world connects and does business online, cybercrime will continue to grow as well, especially with the ease and decreasing cost of deploying computing power for evil. The rise of IoT across industries means billions of devices as well as critical infrastructure networks will come online, facing the threat of these attacks as well. And the stark realities of cyber warfare between nations mean more than just criminals will be leveraging bots for their purposes. We believe Kasada’s solution can be a leader in these existing and emerging markets around the world.

Conclusion — We’re very excited about Kasada: they’re playing in a large, fast growing market, and have great traction. Sam is a terrific founder, and it will be exciting to see what’s possible with more resources around him.

Battling Bots with Kasada was originally published in Main Sequence Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

The Founder’s Secret Weapon: Listening

As a Founder, I used to get pretty hyped up for big meetings — whether raising money, trying to land a large partnership or customer, or important board meetings. I focused a lot on our presentation or sales materials, and thought hard about what I would say, trying to anticipate what might come back at me and how I could best respond. It was critical to use the right words, speak them the right way, and ultimately to use that to persuade or assure others that I knew what I was talking about.

That focus is understandable, and pretty universally believed to be a trait required for success…not just in leading startups but many roles in life.

These days, as an investor, especially one working with early stage companies, I’m spending a lot of time with Founders who are in that same position and focused on doing what I used to do — instilling confidence and conviction by delivering the right words or materials.

What’s become clear to me is that there is an even more powerful tool for Founders: listening.

· You’re at that big customer meeting with your polished materials, value proposition and competitive differentiation locked and loaded. Why not start the meeting asking the customer about their challenges, and what was it about your solution that caused them to want to meet with you in the first place?

· Pitching for funding, I can’t over-emphasise how important it is to ask about a fund’s focus, strategy, typical investment size/stage and what else they’ve seen in your space that they’ve liked or not.

· Board meetings are not just a chance for you to show your investors and non-exec directors you know what you’re talking about and can solve every problem, they are a chance to seek input and ask opinions. Isn’t that why you have these experienced people around you in the first place?

Asking the right questions can give you new insights into customer pain, the buying process or competitive intel. Pausing during a presentation and asking whether there are any questions or comments will give you realtime input you will otherwise miss. And if you take time at the end of a meeting to ask for feedback and next steps, you will be shocked at how honest people will be with you.

Unfortunately, some Founders (and VC’s!) love to hear themselves talk, some talk a lot when they are nervous, but most are convinced that the more they speak the more confidence they’ll instill. Wrong. Every decent Founder can talk. Asking thoughtful questions and being a good listener is rare, and shows me that a founder is confident, experienced and a learner.

Listening is a secret weapon.

A Founder’s Secret Weapon: Listening was originally published in Main Sequence Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

After my first few weeks at Main Sequence Ventures , it’s very clear we are not going to do this alone.

The opportunity in front of us — and by “us” I mean founders, publicly-funded research agencies (PFRAs), and investors — is at once inspiring and intimidating. On one hand, as you dig in, you can’t help but be inspired by the expertise and achievements — often unheralded — in the universities, CSIRO and other PFRAs across Australia. On the other hand, there are dozens of organisations, thousands of researchers, and an even greater magnitude of projects and early stage companies commercialising deep tech in our ecosystem. Consequently, there is no shortage of huge ideas, grounded in concrete, unique science or insight, championed by passionate founders. In fact, it’s the opposite — the top of the funnel will be enormous, and the challenge will be assessing and closing investments rather than finding them.

Outside of publicly-funded research, our Australian ecosystem has done a great job of starting to educate entrepreneurs about how to approach, engage with and generally think like an investor. CSIRO’s ON! Program, as well as other deep tech accelerators, have also started that work, but given the scale at the top of the funnel, we need to do even more.

So today we’re launching Main Sequence Nova — a unique program to immerse public sector researchers in the world of startups and venture investing.

Nova participants — who need to be affiliated with a university, a PFRA such as CSIRO, or other organisation such as a CRC — will come into Main Sequence Ventures for anywhere from a week to a few weeks — and get an unfiltered view of life at a deeptech venture firm. You’ll join us for pitches, our internal investment review sessions, even our networking sessions and events. And you’ll be asked to do an important piece of research or due diligence that will contribute to a sector review or live investment. The program is unpaid but we believe will pay back many times over in terms of your learnings and experience.

Every Nova participant will gain:

• Insight into how we assess and decide on investments
• What makes a founder and opportunity stand out from others
• How the business of venture capital works
• Drivers and habits of successful startups.

Ultimately we’re betting that opening up our world to high potential founders will help move the industry forward and improve the quality of the opportunities in the market.

Our first Nova participant is Samy Movassaghi, a distinguished wireless networks researcher and Google Fellow from Data61/CSIRO and ANU who is spending two weeks with us. Samy has been terrific and will be writing about her experience shortly — keep an eye out.

We plan on selecting one Nova participant per quarter (with the next expected to start around October), but may add more depending on interest and how things go.

You can apply and see all the fine print here. Please spread the word!

NOVA — Your chance to be a deeptech VC was originally published in Main Sequence Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

My decision to join was made much easier by the lure of working with such uniquely qualified partners as Bill and Phil, as well as the ambitious mandate of the fund. Having seen the value of public sector research up close with BuildingIQ and Propeller Aero (both of whom have leveraged IP from CSIRO), and been a mentor in a few of the ON! Programs, I believe strongly in the commercial potential that sits with our world-leading scientists and researchers.

While there will lots of challenges along the way, I’m unashamedly optimistic that this is the right time, right place and right market focus. Combined with all the constructive efforts in the early stage #startupaus ecosystem (ON!, Cicada, StartMate, 500 Startups etc), the growing pool of local and international investment capital $ interested in Australian deep tech, and the fact that more and more talented people in Australia (and abroad) are excited about founding or joining a startup here, the timing couldn’t be better to launch Main Sequence.

More to come…in the meantime, I look forward to working with you!

Joining Main Sequence Ventures was originally published in Main Sequence Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.