Australian venture capital firm Flying Fox is shifting its focus to decidedly ‘boring’ startups, as investors react to the ongoing tech downturn.
Australian venture capital firm Flying Fox Ventures is shifting its focus to decidedly ‘unsexy’ startups, its partners say, as local investors tweak their strategies in the wake of the tech downturn of the past 18 months.
“We like boring businesses right now because they’re necessary, and they are recession-proof and have some protection against macroeconomic headwinds. Companies that fall into this unsexy category become very sexy to us if they’re capital efficient and seeing great growth.”The tech bubble of 2021 led to valuations getting overinflated, Neumann said, and too many businesses without sound fundamentals received venture capital funding.
“One was looking at a niche market and thinking it’s the tip of an iceberg, but it’s actually just a truly niche market. The second mistake was really understanding what is a true pain point for consumers, compared to what is just a thing of convenience. “We’re now meeting founders who have done their five-to-ten years at Atlassian or Canva, and wanting to do their own thing,” Kirkham said. “There are a number of quality individuals coming through who have done their time in tech, been part of these big stories and are now starting their own adventure.”
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