Govt tips another $80m in VC into tech

James Riley
Friday, 05 November 2010 16:39

IT Policy - Government Tech Policy

An additional pool of $80 million in venture capital has been created through the Innovation Investment Fund, with information technology and new media companies likely beneficiaries.

Innovation Minister Kim Carr said four fund management companies - Carnegie Venture Capital, MRCF, Southern Cross Venture Partners and Start-up Australia Ventures - would receive $20 million to focus on four separate areas.

Carnegie will target companies in Life Sciences, the internet and new media, while the Southern Cross Fund No 2 will look at early stage investment in the IT, telecommunications, materials and clean technology. MCRF targets the medical sector, while Start-up Australia is more generalist.

Senator Carr said the new funding was targeted primarily at driving commericialisation success stories. He said venture capital was critical to an effective innovation system because it linked research to world markets.

"The venture capital we are providing these fund managers today will help early-stage high-growth Australian companies commercialise their research. This will lead to new skills, jobs and trade opportunities that will grow our economy," Senator Carr said.

"Receiving Government funding of $20 million each, the four fund managers also have received funding from private investors. This private investment must match or exceed the Government's investment."

The Innovation Investment Fund was started in 1998 by the Howard Government in the build-up to the first internet boom. Since it began it has supported more than 90 companies.

Its successful 'alumni' include the LookSmart internet search engine, which returned $245 million from an original $2.2 million investment by IIF fund manage AMWIN, as well as the hugely success online job market Seek.com.au.

Innovation Australia welcomed the new money and says the funding decision was based on its own assessment process.

"This investment will help ensure that great Australian ideas, research and innovation are developed for the benefit of the national economy," Innovation Australia chairman David Miles said.

"It will assist in building innovative new businesses, develop skilled fund managers and further the growth of Australia's venture capital market."