After two of its portfolio companies became unicorns this year, Main Sequence hopes to raise $400 million for its fourth fund by the end of 2026.
Main Sequence has hit the market to raise its fourth fund, with the deep tech VC hoping to secure $400 million to finance a new generation of bets in cutting-edge science startups.
Buoyed by the success of Gilmour Space Technologies and Advanced Navigation, both of which became unicorns earlier this year, Main Sequence hopes to complete the raise by the end of the year.
Main Sequence co-founder Mike Zimmerman declined to comment in detail on the fund, but confirmed the VC is currently speaking with investors. A source familiar with the matter, granted anonymity to speak freely, said the target is $400 million.
In a job listing for an investor relations associate, Main Sequence describes this as its “most ambitious raise.” Main Sequence drummed up $450 million for its third fund, announced in 2023, though it originally targeted $300 million.
“We have a target that we think about as the minimum, and if we can overdeliver on that I’m sure we can put the capital to good use,” Zimmerman said. “I can’t get into specifics, but I would say the fund size that we have [for fund three] feels like a good fund size.”
The VC isn’t starting from zero. In 2022 the Federal Government committed $150 million to Main Sequence over two funds. Half of that went to Fund Three, and Zimmerman confirmed it has $75 million in pre-committed capital from the Government for Fund Four.
It would be only the latest major fundraise by an Australian VC this year. Blackbird last month announced a record-breaking $1.05 billion fund, while Square Peg in February closed $650 million in funding across two vehicles.
Main Sequence was formed in 2016 by CSIRO. While most Australian venture capital firms have focused on software, particularly of the B2B variety, Main Sequence’s mandate is to help bridge researchers and scientists from the world of academia to commerce.
With the 10-year horizon of its 2016 fund in sight, pressure is mounting to steer portfolio companies towards an exit that will return cash to investors who backed Main Sequence nearly a decade ago.
Though the firm is thus far without a Canva-level success story, some winners have emerged. Advanced Navigation and Gilmour Space Technologies, both companies Main Sequence backed at a seed stage, were valued at over $1 billion this year. Meanwhile Q-CTRL and Morse Micro are valued in the hundreds of millions.
Main Sequence says it has returned some capital to Fund One investors via the 2025 acquisition of medtech startup Cylite, and various secondary sales.
“The number of options for exits has increased since we started and, particularly because we’re eight years in, we’re starting to think more about [that],” Zimmerman said. “The game is not over until you return cash back to investors.”
Want to see more Forbes articles on your feed? Tap here to make Forbes Australia a preferred source on Google.
Look back on the week that was with hand-picked articles from Australia and around the world. Sign up to the Forbes Australia newsletter here or become a member here.
