Eight new or new-to-Victoria venture capital firms have received $300,000 from LaunchVic. The goal is for the VCs to turn that combined $2.4 million into $300 million in funding for Victorian startups and founders.
Some 800 startup founders, VCs, investors, academics, and government officials filled Melbourne Park on a frosty winter evening this August. The Victorian Startup Gala attendees dressed in their Thursday-night best, and celebrated the state’s blossoming entrepreneurial ecosystem in style.
LaunchVic, the organisation behind the event, was established by the Victorian government in 2016. Since then, the number of startups in the state has grown to 3,500. The value of the startup, scaleup, and unicorn ecosystem has exploded from $5.6 billion 8-years-ago to $123 billion in 2024.
It is not all rainbows and sunshine in Garden State ‘startupville,’ however.
“In 2023, Victorian startups attracted $668 million in investment, a sharp decline from the $2 billion annual averages seen in 2021 and 2022,” LaunchVic CEO Dr Kate Cornick tells Forbes Australia.
“This drop mirrors a global slowdown in venture capital funding. And despite the number of startups in Victoria more than tripling in size since 2016, early-stage investment in the state remains stubbornly below $100 million per year.”
To combat this, the Victorian government is chipping in a little extra this year. It allocated $40 million toward LaunchVic in the 2024 budget. And at the Victorian Startup Gala, the Victorian Minister for Economic Growth announced a further $2.4 million investment to seed eight Victorian-based VC funds.
The funding will be administered through LaunchVic’s ‘VC Support Program,’ with a goal for the $2.4 million going to VC funds, having a follow-on effect of more than $300 million in capital being allocated to Victorian startups.
The eight VC funds each receiving $300,000 to get off the ground, are Australian Medical Angels, Ecotone Partners, Era VC, Flying Fox Ventures, Mandalay Funds Management, Pacific Channel Ventures, SBE Australia and Synthesis Capital.
“These new VC funds will provide more investment for startups when they need it most, allowing them to scale up quicker and create more high-skilled jobs in critical sectors like medtech and climate technology,” Minister Tim Pallas says.
And that is music to Dr Cornick’s ears.
“This program is supporting the growth of the local VC sector and placing more capital into the hands of quality founders during those crucial early stages,” says Dr Cornick.
“LaunchVic’s VC Support Program hopes to change these statistics by seed funding new or new-to-Victoria VCs to establish in the state. Our eight successful recipients will collectively aim to raise over $300 million, unlocking critical capital for Victorian founders in a challenging investment environment.”
LaunchVic’s 8 new Victorian VCs
- Australian Medical Angels led by Dr Amandeep Hansra and Dr Bi Mian, will focus on investing in early-stage healthcare startups from pre-seed to Series A.
- Ecotone Partners led by Nicole Kleid-Small and Amanda Goodman, will launch a fund focusing on investing in early-stage climate tech startups via both equity and debt.
- Era Ventures Management will focus on investing in early-stage transformative startups in the consumer products and associated technology ecosystem.
- Flying Fox Ventures, led by Rachael Neumann and Kylie Frazer, has established a novel VC fund structure that will use Special Purpose Vehicles (SPVs) to hold multiple startup investments across different stages and sectors.
- Mandalay Ventures will invest in high-potential Australian agrifood technology ventures across Seed to Series A.
- Pacific Channel will create and invest into deep-tech pre-seed to early-stage companies within the future of food, health and the environment in Victoria.
- SBE Australia led by Kerri Lee Sinclair and Nicole Cook, will focus on investing in women-led startups.
- Synthesis Capital Management a spin-out of the MedTech Actuator, will focus on investing in early-stage, deeptech medical, health and wellbeing-related ventures, from pre-seed to series A+.
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