Invest now, raise later: Afterpay launches fund with a difference Yolanda RedrupReporter
Mar 23, 2020 – 12.00pm
Former Investec Australia senior banker Hein Vogel has joined forces with Afterpay to launch AP Ventures — an investment vehicle they swear is not a regular fund.
Afterpay's Anthony Eisen approached Hein Vogel to launch AP Ventures. Graham Jepson
The non-fund is structured as an unlisted public company, counting more than 100 shareholders. It intends to invest at least $50 million to $60 million in five or six ventures over the next few years.
Buy now, pay later fintech Afterpay owns 44 per cent of AP Ventures, but it also counts big name backers such as billionaire Alex Waislitz's Thorney Group and Duncan Saville's ICM Group.
Mr Vogel said the investment vehicle was structured so it did not have the limitations of an Early Stage Venture Capital Limited Partnership (ESVCLP), giving it more flexibility in terms of the size of its investments and the holding terms, as well as equipping it with the ability to list in the future.
"We haven't gone out to raise $200 million and said we'll deploy it in a certain time. We have a structure that gives us flexibility and we've raised some capital into the vehicle," Mr Vogel said.
"When we find opportunities, we can find more capital. There's no commitment from the investors other than having investors with deep pockets who are very supportive."
Prior to starting AP Ventures, Mr Vogel managed Investec's $45 million emerging companies fund, which had invested in the likes of Dresden Optics, MadeComfy and Fusion Factory.
Mr Vogel left Investec in mid 2019 and not long afterwards Afterpay chief executive Anthony Eisen got in touch with the idea for the investment company.
"I had a good time at Investec, but with the banking world like it is, I left them in the middle of last year to pursue something more entrepreneurial," Mr Vogel said.
"Anthony said he was setting up this ventures thing... and I was quite excited about the opportunity. It's a separate business to Afterpay, but established to support Aftepay in helping it harvest opportunities that they receive in their network."
Mr Vogel said Mr Eisen had not wanted to be distracted from the day-to-day running of Afterpay, but was keen to still have access to the investment opportunities.
AP Ventures has already made its first investment, putting $15 million into LayAway Travel which lets travellers to layby their trips. Of this, $6.5 million of capital came from Afterpay.
Afterpay was contacted but was unable to comment for this story.
Because the investment company does not have a typical fund, when it comes across a company it is keen to back, it does its due diligence and then hits up its pool of investors for the capital. The ownership of the company is based off how much capital the investors have put into deals to date.
In each investment it intends to invest at least $10 million.
"What we haven't done is raise $100 million and then sit on the cash. We don't have the pressure of deployment," he said.
"We like to offer the opportunities to existing shareholders, but at the same time we're happy to welcome other strategic shareholders onto the register where appropriate."
Mr Vogel said he expects to generate returns from the investments within three to five years, with the caveat that it does not have a "desperate desire" to exit.
APT Price at posting:
$8.90 Sentiment: None Disclosure: Not Held
