Dovetail Ventures, The Venture Capital Firm That Has Advised Startups Such As Afterpay, Is Raising A New Fund
Dovetail Ventures, the venture capital firm that has advised startups such as Afterpay, is raising a new fund
Dovetail is a full-service venture studio with offices in Sydney and Auckland that works closely with founders who have a great idea but lack technical expertise. Dovetail assists them in establishing businesses from the ground up, positioning them for growth and additional funding. Dovetail was founded in 2014 and its success stories include Afterpay, a unicorn based in Melbourne that is one of the most visible players in the buy now, pay later space, as well as Klarna and Affirm.
“Think of us as the technical co-founders, responsible for driving and executing product strategy, design, and product development,” Dovetail co-founder Nick Frandsen told TechCrunch.
Dovetail is currently raising a $10 million Australian dollar (approximately $7.5 million US dollar) fund to invest in seed, Series A, and Series B rounds in 15 of the most promising companies that have completed its venture studio program. Dovetail has written checks ranging in value from $150,000 to $1 million AUD as an investor.
Objective of Dovetail
One of Dovetail's objectives is to prepare startups to seek funding from other venture capital firms; Blackbird, Qantas, and Wavemaker are among the firms that have invested in Dovetail's portfolio companies.
“By the time we're ready to make an investment decision, we'll have collaborated with them on a daily basis for at least three months prior to a seed round and 12 months prior to a Series A. This means we are investing with the informational advantage of a co-founder,” Frandsen explained. “Another distinguishing feature of Dovetail is that our entire team owns a stake in our portfolio companies. This reinforces our team's unity, dedication, and desire to succeed.”
Dovetail began collaborating with Afterpay in 2017, when it had fewer than 40 employees. According to Frandsen, Afterpay's founders, Nick Molnar and Anthony Eisen, were looking for a partner to help them build and scale their mobile and web applications. While both had extensive experience in financial services, their backgrounds were non-technical. That is where Dovetail came in, developing Afterpay's technology platforms and assisting in the launch of its consumer-facing products.
Other notable venture studio graduates include resource management SaaS platform Runn; one-click invoicing tool Marmalade; Provider Choice, a management platform for providers in Australia's National Disability Insurance Scheme; Landmarks ID, a privacy-compliant mobile location intelligence platform for marketers; and Fluenccy, a service that assists importers and exporters.
Prior to founding Dovetail, Frandsen and co-founder Ash Fogelberg's startup, 1-Night, was acquired by TicketDirect in 2013.
Dovetail's venture studio is sector-agnostic (though it has significant experience in fintech, SaaS, and marketplaces) and invests in startups that may not yet have a product but have founders who are "ambitious, commercially savvy, and bring industry expertise from the field in which they are attempting to solve a problem," according to Frandsen.
When deciding which founders to work with, Dovetail evaluates their idea's viability and growth potential.
This includes determining whether the founders are well-suited to the issue, determining whether there is sufficient market potential for the startup to grow into a large company, and determining the level of competition.
While Dovetail's product agency primarily serves American businesses, its venture studio is currently focused on Australasian startups, with plans to expand into North America in the future.
“We are actively seeking large industries that are underappreciated by the startup community,” Frandsen explained. “We're looking for suggestions. which require substantial industry experience and are difficult to replicate by teams of young aspiring entrepreneurs.”
