AO Ventures, the venture capital arm of Tennis Australia and the Australian Open, expects to lift investments beyond US$40 million (A$57.2 million) by creating a second fund, according to General Partner Machar Reid.
Reid said AO Ventures was assessing about 20 potential deals per week for its first fund, which has invested in four early-stage businesses that use innovative technologies, since its establishment in early 2025.
It aims to make seed and series-A stage investments in 20 businesses in the sports, entertainment, media and health-related sectors over five years with the first fund.
“We are seeing around 20 (deals) a week in various guises. That’s a mix of inbound and us reaching out to the market to understand what’s happening,” Reid told Azzet in an interview.
“Most of the opportunities that we’re looking at tend to be international in nature, which ties in with the way the (AO) is positioned. It’s not just an event that captures Australia’s attention but (also) the imagination of the world.
“In terms of what the future holds, we’re on the constant lookout for ways to grow and diversify our revenue. There’s no shortage of deal flow coming our way.
“All going to plan we would expect to have another fund moving forward.”
He said about half of the 20 companies were likely to receive follow-on funding until the $40 million of capital was fully deployed.
The fund aims for top-quartile net returns of three times the initial investment over time, with initial investments typically ranging between US$300,000 and US$1.5 million before follow-on rounds.
He said the maximum size of the first fund was based on the deal flow, the number of investments it wanted to make and the size of them.
As a fund focussed on providing seed and series A investments, AO Ventures was unlikely to lead funding rounds and more likely to follow-on.
AO Ventures has so far backed:
- Bolt6: artificial intelligence (AI)-powered officiating, broadcast and data services used in tennis and other sports
- Raven Controls: real-time venue operations and incident management software, and
- Mindspring Padel & Padel Haus: companies supporting growth in padel sport infrastructure and premium clubs.
Tennis Australia has contributed 25% of the first fund, with the balance coming from investors including Caledonia Investments Chair Mark Nelson, Tanarra Capital Founder and Chief Executive Officer (CEO) John Wylie, Melbourne businessman Mark Healey, Ellerston Capital Chairman and CEO Ashok Jacob, the Denholm family office, Wollemi Capital Group, American venture capitalist Brad Feld and Malaysia’s Gnanalingam family.
