Kiwi company Dovetail is launching a venture capital fund to invest in the companies they’ve helped build from the ground up.
Founders Nick Frandsen and Ash Fogelberg started Dovetail as a digital product agency, working with tech start-ups to develop world-class products. Since then, the company has already helped build three billion-dollar businesses, Afterpay, and two they can’t publicly name yet.
Dovetail works with ambitious, commercially savvy founders that bring domain expertise to the problems they’re trying to solve. The challenges these non-technical founders face are their limited tech knowledge or inexperience in growing and scaling a tech company from scratch.
That’s where Dovetail comes in with a unique business model, whereby they position themselves as the technical co-founder, responsible for driving and executing product strategy, design, and development of scalable tech platforms.
Dovetail takes a 10% stake in its portfolio companies and, should they perform well, typically goes on to invest further in seed and Series A and B funding rounds. Its venture model is 100% aligned with the success of the portfolio company. Dovetail’s services are charged at cost price and only profit if the portfolio company is successful.
To further enhance their impact, Dovetail is now raising AUD$10M to kick off its venture capital fund and is looking to fund several Kiwi businesses with this raise.
Frandsen says Dovetail’s long-term vision has always been to raise a VC fund.
“A VC fund will better support the incredible startups we work with, and we couldn’t be more thrilled about this launch.
“We’re proud of the ambitious founders who have trusted us with their ideas since day one and cannot wait to help them go from strength to strength. We’re currently focusing on ANZ startups but are keen to expand into North America in the near future.”
Roughly 25% will be allotted to seed deals, 50% to Series A, and 25% to Series B. Within this, 80% will be invested in Australian companies and 20% in Kiwi start-ups.
Dovetail believes this new VC model can earn outsized returns and create exceptional New Zealand and Australian companies in the process.
A few startups in Dovetail’s portfolio include:
Provider Choice – Provider Choice provides an end-to-end management platform for participants, carers, and suppliers in the NDIS. Dovetail helped found this company two years ago and today it’s a fast-growing leader in the NDIS space with a team just shy of 50.
Runn – Runn is a B2B SaaS product for managing people, projects, and profits. Already used by some of the largest companies in Europe, this team of 12 is quickly building a world-class product helping companies improve the efficiency of managing their workforce.
Marmalade – Marmalade is an innovative new FinTech that facilitates flexible working capital for its customers by providing one-click invoice financing. Dovetail helped found Marmalade one year ago, in which time they’ve seen tremendous traction. The team is now more than 15 people, and they are acquiring a fast-growing customer base.