A managing director of Australia’s biggest venture capital fund has warned tech company valuations are becoming overheated, with low interest rates and a growing number of multi-billion investment funds causing a flood of money into the sector.
Matthew Koertge, who is the co-managing director of the $735 million investment fund Telstra Ventures, says the competition for deals in the current climate is such that investors are buying in to companies at extremely high prices, seemingly with little consideration of how the company can grow to justify a higher price in a liquidity event such as a float or a sale.