As artificial intelligence reshapes industries at breakneck speed, much of the global conversation has centred on US‑based giants and the platform battles in Silicon Valley. Beneath that, a quieter revolution is underway in Australia - driven by founders and the venture capital firms backing them at the very beginning.
Tom Humphrey, Partner at Blackbird, argues this early‑stage ecosystem is where Australia’s AI future is being forged.
Venture capital is the fuel to the engine room of innovation,” he says. “That was true before AI, and it’s even more true now. If you want to understand where the next decade of AI‑driven value will come from, you have to start with the start‑ups.”
Blackbird is one of the Asia‑Pacific’s best‑known venture firms, with more than 60 staff in Sydney, Melbourne and Auckland. Since 2012, it has deployed over $3 billion into companies founded in the region and led early rounds in businesses such as Canva, Eucalyptus, SafetyCulture, Culture Amp, Zoox and Halter.
Over the past decade, Blackbird has backed more than 60 “AI‑core” companies - start‑ups where AI is the foundation of the product. Recent investments include Heidi, Leonardo, Harrison AI, Lorikeet and Ivo.
That pipeline reflects a broader national advantage.
“We punch above our weight in AI talent,” Humphrey notes. “Thanks to our universities, we’re home to around 9% of all AI experts in the Asia‑Pacific - behind only China. We’ve also got a mature software ecosystem, with a history of building product‑led B2B companies like Atlassian, Canva and Xero. And we’re one of the few places that can build locally and sell seamlessly into markets like the US and UK.”
These ingredients have helped Australia attract more venture capital into AI start‑ups than any other country outside of China in the Asia-Pacific region.
The story of Leonardo AI makes this tangible. Blackbird was the first seed investor in Leonardo, a generative AI company that became one of the fastest‑growing businesses in Australian history and was acquired by Canva for more than $320 million just two years after founding.
When Blackbird first invested, there was no product on the market.
“What we saw early on was the pace of progress,” Humphrey recalls. “The speed of product development, the strength of the founding team, the calibre of the AI engineering talent they were attracting - it was all exceptional. On top of that, there was huge pent‑up demand. They had a waitlist of more than a million people prelaunch, and a clear sense that existing tools in image generation just weren’t good enough.”
For investors used to listed companies and earnings multiples, that sort of decision‑making can feel like another universe. But Humphrey argues this is where the groundwork for future public‑market winners is laid.
By the time a company is large enough to list, a huge amount of the value creation has already happened and more of that value is accruing to the private markets as companies elect to extend IPO timelines,” he says. “Venture is where those trajectories are set.”
Humphrey sees the Australian AI opportunity cutting across multiple layers of the technology stack.
“We’re investing in the three core layers of the AI stack - the software application layer, the machine learning ops layer (infrastructure tools that operate alongside large language models to help companies build and deploy AI at scale), and the foundational model layer itself,” he says. “Today, we are the lead investor in all five companies we know of that have trained and released proprietary AI models here in Australia.”
One of Blackbird’s flagship portfolio companies, Canva, is already the world’s third most‑used generative AI application. Canva recently released two image generation models that have entered the top 10 on global AI leaderboards.
Looking ahead, Humphrey highlights several themes:
For Australian families and family offices, the challenge is not simply believing AI will matter but working out how to participate in the value it creates. Public markets will capture some of that growth, but the earliest and often most pronounced opportunity still happens privately, as we have seen with the leading AI labs and application companies.
Humphrey cautions that this is not a space for short‑term speculation.
“Early‑stage investing is inherently volatile,” he says. “You’re backing a small number of companies where the distribution of outcomes is wide. The key is to access and build a broad portfolio of the best opportunities, with people who are on the ground, close to the founders, and prepared to hold through the cycles.”
Blackbird today is the only local venture fund backed by Australia’s sovereign wealth fund, the Future Fund, as well as ten of the country’s largest superannuation funds, collectively representing more than 14 million Australians.
We feel a deep responsibility for every dollar we invest,” Humphrey says. “The decisions we make directly influence the economic future of Australia and millions of Australians. And supporting local AI innovation isn’t just about financial returns; it’s about ensuring our country is on the front foot in the industries that will define the next few decades and helping steer future opportunities for our kids.”
As AI disruption intensifies - and attention remains fixed on Silicon Valley - many of the companies that may shape Australia’s role in this new era are being built today in start‑up hubs, labs and co‑working spaces across the country.
The question for long‑term investors is whether, and how, they choose to be part of that story.
For more, you can read an oped from Tom in the Australian Financial Review here.
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