The Federal Government has injected $80 million into four Australian venture capital funds, with the aim of stimulating innovation and accelerating commercialisation in early stage Australian companies.
The funds will be part of the Government’s Innovation Investment Fund — a program initiated in 1997 under the then-Howard Government to address capital constraints and help develop a self-sustaining Australian venture capital sector.
The project has gone through several funding rounds since that time.
The four VC funds to benefit are: Carnegie Venture Capital, which focuses on the life sciences and IT sectors, among others; MRCF IIF Partnership (medical research); Southern Cross (IT, telco, materials and clean technology); and the Start-up Australia Fund (bioscience). To receive the government money — $20 million per fund — each fund was required to raise an equivalent or greater amount from private investors.
In a statement, Innovation and Industry Minister, Kim Carr, said the investment would lead to new skills, jobs and trade opportunities that would grow Australia’s economy as a whole.
The Government also took the opportunity to highlight some of the Innovation Investment Fund’s successes over the years. It has invested in companies like early stage internet giant, Looksmart, online job portal, Seek, pain management and neurodegenerative disease specialist, QRxPharma, drug discovery company, Pharmaxis, and biotech play, Alchemia.
Several of the firms ended up listing on the ASX. Looksmart, in particular, delivered a “staggering” return to its IIF investors.
The news comes as debate continues over the value of Australia’s technology sector, and what should be done to grow it — if anything.
Reserve Bank Governor, Glenn Stevens, recently claimed the nation hadn’t been disadvantaged by failing to grow a strong technology sector since the dot-com bubble burst a decade ago.
However, entrepreneurs continue to push the envelope of the industry in a bid to grow its size. In mid-October a new seed fund dubbed Startmate commenced operations, looking to dole out small parcels of funding and training to technology minnows in Australia. The fund is backed by a who’s who list of successful Australian technology entrepreneurs.
And Intel Australia chief, Phil Cronin, has said he wants to attract the chipmaker’s investment arm to Australia.
Cronin hopes the onset of the National Broadband Network will attract further capital down under.