Something Real Ventures

Our thesis

Cyber security is a growing sovereign concern globally and a rich market for innovation, yet cyber security startups in Australia and New Zealand do not receive the same levels of funding from traditional VCs as other sectors do. 

Why? Simply put there are very few experts on the investment side of the table, resulting in innovative solutions being placed in the 'too hard' basket. This would not be the case if these startups were based in the US or Israel, both ecosystems which value and invest in cyber security innovation. Local talent misses out because of the tyranny of distance.

When this happens, the opportunity cost is multiplied - innovation, jobs and economic growth are all impacted.  

Something Real Ventures will use our extensive experience and networks to fund the best cyber security startups in the region. We understand the cyber security market deeply and believe in the world-class quality of the talent here. Australia can produce category leaders in cyber - Bugcrowd, Secure Code Warrior, Kasada, Threatmetrix, Quintessence Labs and Senetas. We have spent the last six years investing in cyber security startups via the venture accelerator CyRise, discovering future world beaters including Devicie, Safestack, Traild, Cydarm, Plerion and others.

The most ambitious founders in cyber security today are building generational companies. They are being built right now, and we believe in their potential. Our first unicorn is coming and it won’t be the last. We are here to invest in the future of cyber.

Why now?

Australia

• The Australian market lacks a fund with the deep expertise to assess, qualify and invest in cyber security. 

Geopolitical

• Cyber is the 4th theatre of war in an increasingly unstable geopolitical arena
• Cyber is a growing sovereign concern, with more government focus and regulation and new international agreements
• Cyber crime market is 5x bigger than the cyber product market. This ongoing cat-and-mouse game requires continuous innovation

Business

• Cyber security is becoming more of a focus for boards and management, not less
• Cyber security is a true horizontal industry - it is relevant to all other industries, regardless of their tech base
• Data is now seen as a valuable asset
• Privacy is now expected by consumers

Software

• Speed of software development continues to expand the attack surface and vulnerabilities, and it is not slowing down.
• Increased cloud adoption will continue

Cyber security

• Enterprise and government spending on cyber security continues to grow annually
• The cyber market is not mature, with no single product vendor with more than single digit market share (10 vendors generate > $1B annual revenue in $100B market)
• Increased automation will be required to make up for the global shortage of cyber talent
   

Our mandate (i.e. what we will not compromise on)

• Only the best and brightest - we invest in ambitious founders who are subject matter experts in their chosen fields. We look for cyber specific GTM expertise in the executive team.
• Technical skills - the best products are built by the founding team. We do not invest in outsourced technology.
• Global potential -  we source and select companies that we truly believe are game changers
• B2B by preference - We will also look at B2B2B and B2G in exceptional cases. We don't invest in B2C companies as it's not in our wheel house.
• Scaleups, mid-market or enterprise - We will be unable to invest in companies whose focus is on a small business led GTM
• Market signal - While we don't have the capacity to lead deals, we hope that with the endorsement from the Something Real syndicate and the knowledge within, it will be quicker for a founder to find a lead investor
• Venture-scale returns - enterprise-focussed cyber security companies take time to grow and present a longer investment horizon than traditional tech investments, but we believe these companies have the potential to deliver outsized returns

Our track record

We previously built and ran CyRise, the most successful cyber security accelerator in the Asia Pacific region. Some of the metrics we are most proud of from our time at CyRise include:

• 39 investments into cyber security startups from around the region
• Follow on investments from VCs including Insight Partners, Blackbird, Khosla Ventures, Y-Combinator, Skip Capital and others
• 3.2x return on paper and an IRR in excess of 50% at the time we left
• 8 of these companies are now doing 7 figures of ARR and climbing
• CyRise portfolio companies have won Startup of the Year at the AISA awards for 3 years straight.

How we will attract the best founders

Our market reputation , domain expertise and industry connections will help us to attract founders though direct approach and referrals. 

We are also building our own founder network which brings together a community where founders can share, learn and thrive as they travel the startup journey together.

Investment plan

• We would invest $100K to $400k per deal as a syndicate. Open to increasing this, depending on the allocation we are given by founders

• Expect around 3-4 investments per year

• As lead investors, we put in $5K in every deal we present to you.

• Minimum investment by a syndicate member into a deal varies by role. Experienced investors and cyber security executives  = $5K. Startup founders who want to invest with us = $2k.

Fund details

Standard Aussie Angels terms