Emerging companies to get investment boost from innovation funds

Capital-starved emerging companies seeking capital in technology, media and life sciences could soon get a boost with the announcement of three successful applicants under the next round of funding of the Australian Government’s Innovation Investment Fund

Capital-starved emerging companies seeking capital in technology, media and life sciences could soon get a boost with the announcement of three successful applicants under the next round of funding of the Australian Government’s Innovation Investment Fund.

The successful venture capital fund managers are Andover Venture Partners, Yuuwa Capital, and IB Australian Bioscience Fund.

Under the program, the three successful applicants will be offered the opportunity to become licensed fund managers and the Government will commit capital of $20 million to each fund, matched by a minimum dollar-for-dollar investment by private sector investors.

Each successful fund has a specific focus. Andover will specialise in investing in Australian media, information and clean technologies. Michelle Deaker, managing partner of Andover, says the fund will have an eastern seaboard focus.

“In clean technology we will look for companies specialising in energy efficiency, renewable storage and clean water,” she says.

“In media, web 2.0 days are over so we’re looking for web 3.0 and distribution over the internet will be important to us. For example companies specialising in social engagement with a product or service that had the right distribution networks around the internet, like building applications for mobile phones.”

An average investment might be $5 million but companies that needed only $1 million or $2 million will be considered.

Deaker says Andover is in the process of closing its fund. “We’re looking to raise $75 million to $80 million.”

The second fund is Yuuwa, a Perth-based fund that will invest in seed-stage life sciences and information and communications technology.

The $40 million Yuuwa Capital IIF Fund proposes to invest in seed-stage life sciences and information and communications technology ventures.

Partner Liddy McCall says they will find many of their investee companies from projects being undertaken in universities and research organisations. Yuuwa intends to have a portfolio of 12 investees, with an average capital commitment of $2.5 million.

Private capital of $20 million is already committed to the fund.

Minister for Innovation Kim Carr says more than 80 investee companies have received support under the IIF program.

“Venture capital is increasingly important in funding high-risk innovations world wide. The IIF program plays an important role in developing fund managers with experience in early stage investing and in stimulating technological innovation, which contributes to productivity. This program has been central to growing a viable venture capital industry in Australia over the past 10 years.”

Related stories:

• Solving Australia’s innovation crisis
• SMEs win big from innovation review’s R&D tax breaks