Airtree has followed in the footsteps of major VCs Square Peg Capital and Blackbird Ventures in shorting tech giant Canva by 36%.
The decision sent the Sydney investor down 18 percent of the previous currency’s value.
Blackbird and SquarePeg cut their stake in Canva by 36 per cent in letters to investors, leaving the global design giant valued at $25.6 billion (A$37bn), a loss of US$14.4 billion, to $40bn (A$37bn). A$54.5bn) at the end of September.
When SquarePeg published the investor letter by Paul Basat, it “reflects our views on the current state of the markets and our response,” Airtree said when asked by Startup Daily that it would not share the letter with specific partners externally. .
But a leaked copy reveals Airtree saying its valuation policy is “always conservative” and is only raised when “a credible third-party investor leads a round”.
“There are various issues of companies in our portfolio that raise higher valuation rounds and we hold them at cost or in previous rounds. “We are quick to write off a company because of its operational performance,” the letter said.
Eight years after launching its first fund, Airtree called on Big 4 consulting firm EY.
Airtree has now backed 73 companies since 2014, including Milkrun, the last surviving local grocery delivery service, ten-year-old small business lender Prospa, restaurant ordering platform Mr Yum, Pet Circle, Linktree, Go1 and Employment Hero.
Last month, Sweden’s BNPL Klarna slashed its valuation by 85 percent over the past 12 months – when it earned $639 million from a June 2021 valuation of $45.6 billion. The former world’s 2nd most valuable fintech raised $800 million in July.
Franklin Templeton Growth Opportunities Fund was the first to call Canva in March, reducing its holdings by 33.5% from US$20.2 million to $US13.4m (A$28mA$18.7m).
Earlier this month, Sweden’s BNPL Klarna, which was valued at $45.6 billion in June 2021, fell 85 percent in 12 months, earning $639 million. The former world’s 2nd most valuable fintech raised $800 million in a round, valuing the business at $6.7 billion (A$9.74bn).
Local fintech Airwallex is hoping to defy gravity and is looking to cap its valuation at $7.6 billion as it looks to raise more than $150 million.
In a letter to investors dated June 30, SquarePeg’s Paul Basat said the net IRR on all our funds since the VC’s inception was a combined 32%, returning $582 million to investors across 11 separate exits at 42%. .
“No Australian-based tech venture fund (past or present) has had as many exits or as many capital returns as we have, and it’s one of the things I’m most proud of,” Bassat wrote.
“We are now entering a critical phase for early-stage technology markets and the potential for a major economic slowdown. We do not know the duration or severity, but we believe we are well prepared for the next phase.”
Partner Craig Blair released a statement to The Startup Daily that the latest updates to investors are consistent with the market and expected given the current economic climate.
Like other VCs, we sought an independent valuation from a Big Four accounting firm and made some adjustments to the valuations, but our fundamental beliefs never held firm.
“These changes are not a reflection of our confidence in the companies involved – they are a measure of public comparability for material, late-stage positions and an important measure for our pension investors.”