Perth-based venture capital firm Purpose Ventures has demonstrated that there is enough money in the west to support local start-ups, raising $37 million in just six weeks for a $40 million goal.

The VC opened its fund to investors on Feb. 8 — in the middle of the Silicon Valley Bank collapse — and raised $37 million in pledges from Western Australian investors before the end of March.

Purpose Ventures invests in early stage companies and has committed 70-80% of its investments to WA founded or operated companies. The foundation will also allocate 50% of their performance fees to supporting charitable initiatives.

The Steinberg Family Office has backed the $40 million fund as a cornerstone investor, attracting investment from some of WA’s largest corporations and wealthy families.

The fund is not sector specific and has a 15% carve-out for health-related investments.

Director Derek Gerrard has stepped in to solve a local problem regarding access to capital for West Coast founders. Despite accounting for around 10% of the Australian population and contribute more than 15% of the country’s GDPWA has for some time struggled to attract venture capital.

He said WA is at least five times underrepresented in access to local venture capital. It means the state loses founders in the process (WA’s most notable exports are Canva co-founders Melanie Perkins and Cliff Obrecht who met at the University of WA as Arts and Commerce students and wanted to solve the yearbook design problem)

“While much of the supportive startup ecosystem in WA has improved, the lack of WA-based venture capital often results in WA’s best entrepreneurs being forced to move their businesses to the eastern states or abroad in search of to finance, and local IP, job creation and wealth creation,” he said.

Gerrard believes these companies would and would have stayed in WA had capital investment been available from WA sources at an early stage.

In 2022, $4.57 billion was allocated to venture capital through the Early Stage Venture Capital Limited Partnerships (ESVCLP) structure, but less than 1% was invested in companies registered in WA.

Purpose Ventures received conditional ESVCLP registration in February and is the first WA-based fund to do so. The Venture Partners team includes some of the top contributors to the state’s startup ecosystem, including HealthEngine founder Dr. Marcus Tan, Lockwood Advisory Nicole Lockwood and founder of Spacecubed. Brodie McCulloch.

The VC also recently received operational funding from the WA State Government’s New Industries Fund of the Department of Jobs, Tourism, Science and Innovation for the first three years to establish the fund under their WA Ventures Support (WAVES) -program.