Beaten Zone Venture Partners Announces First Capital Call Following Successful Fund Close
Press Release, For Immediate Release
Brisbane, Thursday FEBRUARY 6, 2025
Brisbane, Australia – Beaten Zone Venture Partners (BZV), Australia’s specialist Defence technology venture capital firm, today announces its first capital call following the successful first close of Fund I, a conditionally registered ESVCLP fund. The capital call, scheduled for the week of February 3rd, 2025, marks a significant milestone in advancing sovereign Defence capabilities through private capital investment. Over AU$10M has been committed so far to Fund I, allowing the Fund to meet its final condition for ESVCLP status, and we are expecting a final close within 18 months and targeting AU$60M.
“The response from investors has validated our thesis that Defence technology requires dedicated venture capital expertise,” said Steve Baxter, Founder and Managing Partner of Beaten Zone Ventures. “With this capital call, we’re moving from thesis to action, ready to deploy more capital into companies building strategic technologies that enhance Australia’s sovereign capabilities. On behalf of the Beaten Zone Ventures team I want to thank unreservedly our investors who have trusted their capital to us.”
Fund I is primarily targeting companies that have traditionally found it very difficult to raise capital due to their exposure to Defence. This reticence has led to an opportunity for good value equity, given traditional capital has been irrationally scared away. The western world’s holiday from history is over and substantial tailwinds in an investment sense abound. The recent change of government in the US and the open discussion about defence budgets moving towards 5% of GDP from their current levels currently closer to 2% only add to the opportunity in this sector. At the same time as budgets are moving upwards the mix of capability used by defence forces is undergoing radical change with the onset of more consumer technologies being incorporated into modern arsenals – small, cheap and plentiful aerial drones sporting very capable sensors being the most visible example of this.
Since launching, Beaten Zone Venture Partners has demonstrated significant momentum in the Defence technology sector. The team has conducted comprehensive reviews of more than 350 companies, representing potential investments of nearly $320M. This thorough evaluation process has already led to several strategic investments, including commitments to transformative companies like HEO, which is creating technologies and solutions that ensure a sustainable and secure space environment. Arkeus is accelerating decision-making through the fusion of optics and autonomy with its cutting-edge sensor technology, and Nominal Systems’ innovative simulation platforms hold a big vision to change the way we design, test and operate every complex system, from satellites to cars.
Beaten Zone Venture Partners targets sovereign Australian businesses that can sell to an identified market demand that is primarily in the US. The US Defense budget is almost US$900B compared to Australia at US$32B. The US DoD also has well over 100 organisations that can acquire capability with low/no tender and process overhead, and these are the targets of our companies.
Through these investments and ongoing deal sourcing, Beaten Zone Venture Partners has built a robust pipeline of opportunities spanning crucial Defence domains from Sea to Space, positioning the firm at the forefront of sovereign capability development.
The pipeline we’ve built spans crucial capability areas including:
- Advanced computing and software solutions for Defence applications
- Next-generation materials and manufacturing processes
- Autonomous systems for multi-domain operations
- Quantum technologies and their Defence applications
- Advanced sensing, connectivity, and security solutions
- Space technology and orbital capabilities
- Biotechnology and human performance enhancement
- Microelectronics and semiconductor sovereignty
The breadth of our deal flow reflects the evolving nature of modern Defence requirements, where traditional domains intersect with emerging technologies. Through our investments, we’re not just funding individual companies; we’re helping build interconnected capabilities that strengthen Australia’s Defence industrial base.
The timing of equity investments in this sector aligns with unprecedented growth in Defence spending and capability requirements. The global allied defence sector now exceeds US$1.2T, presenting Australian companies with significant export opportunities. This is further amplified by AUKUS commitments of over $350B across the next three decades, creating a sustained demand for innovative Defence technologies. While the Australian defence market, at US$32B, represents a strong foundation, the real opportunity lies in accessing the broader allied market through strategic partnerships and capability-sharing agreements.
Beaten Zone Venture Partners’ investment strategy is built around core pillars that define modern Defence capabilities. Lethality focuses on advanced weaponry and supporting systems that enhance operational effectiveness. Survivability invests in protective technologies and countermeasures that keep forces resilient in contested environments.
“What we’re seeing in the market validates our investment thesis,” added Baxter. “The traditional funding structure has built impressive capabilities. With private capital, these companies can deliver their innovations globally.”
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PHOTO: Alexandra Grigg ( BZV Investment Manager & Steve Baxter, Lead Investor, Founding Partner)
ABOUT BEATEN ZONE VENTURE PARTNERS
Beaten Zone is headquartered in Brisbane and will invest in sovereign early-stage businesses with products having material military use, that help to contribute to Australian and allied war-fighters lethality and survivability. The scope precludes investments involved with controversial weapons, e.g., landmines or other capabilities that would violate Australian ratified treaties or agreements.
MEDIA CONTACT
Stephen Baxter Lead Investor and Founding Partner (steve@beatenzone.vc)
Peta Ellis General Manager (peta@beatenzone.vc)
About Steve Baxter (www.stevebaxter.com.au)
Steve is a passionate Australian, Queenslander and veteran. He has been investing into the Australian technology scene since 2011 with over 90 companies funded. He was the founder of South Australian dial up ISP SE Net, and co-founder of Brisbane based whole telecommunication company PIPE Networks. Following successful exits, Steve started River City Labs, Startup Catalyst, River Pitch and TEN13 as well spending one year as Queensland Chief Entrepreneur and four seasons on the Channel Ten show Shark Tank.
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