Pacific Partners' pioneering venture capital fund launches with eyes on potential UAE expansion in the near future

A new venture capital fund is launching, Pacific Partners who are currently at Abu Dhabi Finance Week, have announced a fund with a special focus on Aussie startups that plans to boost the burgeoning AI sector. While many large funds have diverse investment portfolios, Pacific Partners will take a focussed approach on AI startups in four key sectors across Australia and Silicon Valley, with potential expansion into the UAE in the future.

Australia is a key region as it is one of the world leaders in AI and a hub of regional innovation says Clayton Larcombe, the Managing Partner at Pacific Partners.

(Clayton Larcombe, managing partner, Pacific Partners)

"Australia is a global hub for AI innovation. The success of Canva highlights the massive potential in the region. We are committed to supporting founders here who are shaping the future of AI," says Larcombe.

With 60% of the fund earmarked for initial funding, the remainder will be reserved for follow up investments as companies grow. Rather than trying to support a massive portfolio of startups, Pacific Partners plans to focus on 20-30 companies at any one time. Those companies will come from four key sectors - health and wellness, media/gaming, defence, and enterprise solutions with a specific eye on startups that have found innovative and exciting ways to use AI in these fields.

Stephen King, Pacific Partner’s Head of Investment is a former Managing Director at Morgan Stanley. He says, “By not taking a scattergun approach we will home in on a smaller portfolio of companies. Our team has extensive experience in these sectors. Our goal is to be real partners to the startups we invest in.”

(Stephen King, head of investment, Pacific Partners)

By concentrating on companies seeking pre-seed, seed, and Series A funding, Pacific Partners operates in a less competitive space. Larger VCs often cannot participate at these stages due to substantial minimum check sizes.

"This dynamic creates a favourable environment for generating outsized returns compared to the investments' risk profiles," explains King. "Savvy institutional investors are recognising this opportunity and are developing new strategies to channel investments into smaller funds that can engage earlier in the company lifecycle."

One of the leaders of the fund, Edward Saatchi, is well known for his vision for AI. His globally renowned TED talk, Will Intelligent Life Emerge from a Simulation, highlights his knowledge and understanding of AI and how it will impact everyone’s lives. Saatchi also boasts a pair of Emmy Awards for his work in the media and entertainment industry.

(Edward Saatchi, leader of the fund, Pacific Partners)

“Edward’s experience as a successful founder and his deep understanding of AI gives us a huge advantage in identifying and nurturing startups,” says Larcombe.

Pacific Partners has established offices in Sydney and San Francisco with potential eyes on also setting up shop in the UAE. This was a deliberate decision to ensure the company has boots on the ground in potentially all three markets it will focus on. While half of the fund’s investments will be made in the USA, primarily in Silicon Valley, the rest of the fund will be evenly directed to startups in Australia and the Middle East. Larcombe says the decision to set up at these location was deliberate as each region is a hub of innovation.

Although Pacific Partners is relatively young, it has enjoyed significant success. As an early investor in Perplexity, a company that has surpassed a $9B valuation, Larcombe says the investment was made when the company was at an early stage and not in later, larger funding rounds. This means the return on investment has been exceptional.

Early-stage startups can find it challenging to find investors. Larger funds often have minimum commitments that these businesses aren’t ready to meet until they become established and move into fast growth. Pacific Partners plans to invest in companies and support them through their initial growth.