Announcing our second fund

We're excited to announce we've opened our second fund to support founders in underserved industries and a wave of new GenAI ventures launching from our venture studio.

VC Fund II is raising AUD$25 million to target high-growth technology companies that fall into two categories:

• New companies to launch out of our venture studio in the next three years, with a focus on underserved industries and GenAI-enabled businesses
• Breakout companies from our existing portfolio, including Marmalade (AU), Chemcloud (AU), Runn (NZ) and Authsignal (NZ)

Fund II aims to invest in 14-18 companies over a three-year period from the first close, with AUD$25 million being split between Pre-Seed, Seed, and Series A startups in both Australia and New Zealand.

The team at Paloma are first and foremost operators; working in the trenches alongside founders, building and scaling new companies from raw ideas through to launch and into high growth mode.

Our venture studio is focused around two key themes:

• Using GenAI to launch new products to market that, to date, have been otherwise unimaginable or impossible to build.
• Partnering with founders in industries that are otherwise overlooked by the startup ecosystem. The venture studio supports non-technical founders by pairing their deep domain experience with Paloma's product development and venture-building capabilities.

Fund I Snapshot

• Companies launched out of Paloma's venture studio take just 20 months to reach $1M ARR—cutting industry benchmarks roughly in half.
• Fund I portfolio companies are becoming increasingly capital efficient—on average seeing a 111% increase in ARR/FTE in the prior 12 months.
• Total Fund I portfolio revenue has grown from AUD$5m to AUD$43m in 36 months; a compound quarterly growth rate of 20%.
• On average, Paloma's portfolio companies from Fund I have grown revenue >4x since the fund's first investment.

Whilst the fundraising scene in Australia and New Zealand has seen some hyper-inflated rounds and untenable valuations, we've been quietly building a portfolio of high growth companies that are extremely capital efficient. We believe in building ventures that create enduring value over the long term. In the current environment, pre-product and pre-revenue companies are struggling to close seed capital. Paloma Capital's Fund II will help address this funding gap whilst also reducing the execution risk of early-stage companies through our venture studio model.