Three years is long enough to have an opinion about what you got right and what you got wrong, and we've been spending time doing that accounting as Banksia Fund II moves into active deployment. The headline view is that the structural thesis — AI-native commerce infrastructure, APAC-specific problem spaces, operators who build for the region's complexity rather than porting Western solutions — has held. The specific timing of which subcategories would develop fastest, and where the most acute capital scarcity would sit, has evolved in ways worth being explicit about.
The area where our conviction has strengthened most is the cross-border payment and financial infrastructure layer. When we made our first investments in 2022, the cross-border commerce thesis was partly prospective — we believed the APAC corridor commerce opportunity would grow and that the infrastructure gap would become more acute as it did. What's happened since is that cross-border commerce flows within APAC have grown faster than the consumer economy as a whole, and the infrastructure constraints are now clearly legible to the companies operating in them. The demand for better cross-border payment rails, smarter FX optimisation, and compliant local payment method support is coming from operating companies with real revenue and real pain — not from theoretical projections. That changes the diligence conversation from "do you believe this market exists?" to "what is the right architecture to serve it?"
The area where we've updated our view most significantly is on the timeline for AI personalisation to produce demonstrable commercial impact at mid-market retailers. In 2021 we expected the adoption cycle to be faster than it has been. The companies in our portfolio that are working in personalisation and recommendation have built genuinely strong technology, but the buyer journey for AI personalisation at mid-market retail has turned out to involve more proof-of-concept cycles, more internal stakeholder navigation, and more integration complexity at the customer side than we modelled. The market is real and the commercial outcomes when deployed are strong — but the sales cycle is a B2B enterprise cycle, not a product-led growth motion, and the capital requirements to navigate that cycle look different from what a pure product-led growth assumption would produce. We've adjusted our fund construction accordingly.
For Fund II, we're specifically extending our coverage into three areas that weren't in the original thesis or were underweighted: post-transaction data infrastructure (smart receipts, loyalty infrastructure, and the data layer that sits between the transaction and the marketing system), agentic commerce tooling (the software layer that supports autonomous purchasing agents — whether those are merchant-side replenishment agents or consumer-side shopping agents), and B2B procurement automation in categories beyond hospitality. The common thread across these is the question of where AI adds value not by improving a human decision but by replacing a class of decisions that humans were making expensively and poorly. That's a different product design problem from AI-assisted decision support, and the commerce categories where pure automation is the right answer tend to be the ones with highest repetition and lowest ambiguity — exactly the B2B procurement and post-transaction categories we're now focused on.
The competitive landscape for APAC-focused commerce infrastructure investment has changed since 2021. There are more funds with an explicit APAC commerce thesis than there were when we launched, which means the supply of capital to the best companies has increased. We think that's a healthy development — it validates the market thesis and it means the founders we're backing have more options. Our differentiation has to live in the quality of our operator insight, the network we've built across the region, and the ability to add genuine product and go-to-market value at the seed stage. Those aren't things that scale with AUM, which means staying true to our emerging manager profile — high conviction, small fund, close operator relationships — is the right strategic posture for Banksia over the next several years.