Australian venture capital firm Square Peg has secured more than $1 billion across two investment funds to back startups at different stages of growth. The fundraising covers Fund 6, focused on early-stage businesses, and Opportunities Fund 3, targeting larger investments. The firm confirmed the combined total in October 2026 but did not reveal the exact figure.
Two Funds Serving Different Investment Stages
Approximately 40% of the capital is allocated to Fund 6, which backs young technology businesses. The remaining 60% is assigned to Opportunities Fund 3, which can invest in more mature companies, including existing portfolio businesses. The split combines new startup investments with follow-on financing.
Square Peg had previously secured a $650 million first close for the two vehicles in February 2026. Co-founder Paul Bassat subsequently informed investors that the funds had reached their final closes, without initially specifying their combined size. The latest confirmation establishes that total commitments across both vehicles have exceeded $1 billion.
A Major Raise for Australian Venture Capital
The latest fundraising exceeds the $860 million Square Peg raised across two funds in 2022, marking a new high for the firm. It also follows Blackbird's announcement of a $1.05 billion fund in August 2026, another major commitment to Australia's venture sector. The fresh capital will finance startup development and expansion.
Australian startup investment has also shown signs of recovery after the post-pandemic funding slowdown. Investment reached $1.7 billion in the second quarter of 2026, representing a 60% increase from the previous year. Investors nevertheless remain selective about valuations and growth prospects.
Portfolio Returns and Notable Investments
Square Peg says it has returned more than $1.4 billion through exits involving 19 companies since its establishment in 2012. The firm also reports a 41% gross internal rate of return, a measure calculated before investor-level fees. Those historical figures do not guarantee future fund performance.
Past realizations include the sale of its position in cybersecurity company Bugcrowd and reductions in its holdings in Canva and Rokt. Square Peg also benefited from transactions involving Deci.ai, acquired by Nvidia, and PropertyGuru, acquired by private equity group EQT. These transactions provided liquidity from earlier investments.
Among its best-known investments is Airwallex, which Square Peg backed during the fintech company's Series A funding round in 2017. Its portfolio has also included Canva, Zeller, Neara, and human resources software company Deputy, spanning fintech and business software. Beyond these businesses, the firm has invested in payments company Stripe and artificial intelligence startup Thinking Machines Lab.
International Strategy and AI Opportunities
Square Peg's investment activity extends beyond Australia, with Israel and Southeast Asia remaining important parts of its geographic strategy. It opened offices in Tel Aviv in 2014 and Singapore in 2020. These markets provide access to diverse technology startups.
Artificial intelligence is another area of attention, alongside the firm's longstanding interest in fintech and software-as-a-service businesses. In earlier investor communications, Square Peg described increasing investment activity in AI-native companies and efforts to strengthen its internal AI capabilities. Its investment in Thinking Machines Lab, co-founded by former OpenAI executive Mira Murati, illustrates that focus.
Founded by Paul Bassat and Tony Holt in 2012, Square Peg now invests across multiple markets. Its latest fundraising combines fresh capital for early-stage startups with greater financial flexibility to support companies as they scale. Its next challenge will be translating the commitments into promising investments and eventual returns.
Source: Forbes Australia