Another large venture capital fund has launched in Australia on the back of the government’s recent startup tax incentives and innovation policies.
Tech advisory group StartMesh has revealed its first early-stage venture capital investment fund, with the aim of securing $20 million in capital.
The fund will be structured as an ESVCLP and will benefit from the government’s early-stage investment tax incentives and changes to the ESVCLP scheme.
It comes just days after the Aura Group announced its own $30 million startup fund to “harness the ideas boom”.
StartMesh has brought global law firm Norton Rose Fulbright to manage the fund, and partner Fadi Khoury says the government’s recent movements in the VC space provided further incentive to establish an innovation fund.
“There’s been a dramatic increase in the number of venture capital funds launched by existing and new players,” Khoury tells StartupSmart.
“The industry was given an injection of moral support with the Turnbull government’s innovation statement at the end of 2015. The federal government has indicated its interest in supporting the VC investment space.
“The legislation was passed through Parliament in a short period of time and many fund managers saw the new tax offset as a significant additional sweetener to attract investor capital.”
Khoury says the fund will be on the hunt for early-stage, high-potential startups.
“We’re looking for opportunities that are validated and disruptive ideas, with a sensible business model, a global application and are managed by committed and passionate entrepreneurs,” he says.
StartMesh co-founder Richard Webb says the fund will aim to help develop the local Australian startup ecosystem.
“The Australian government has taken an enlightened position on the future of technology and innovation in Australia by introducing incentives for investors in this very important asset class,” Webb says.
While the fund will aim to form a “diverse and balanced portfolio”, it will focus on some specific sectors:
- Consumer profiling and insights
- Crowd services enablement
- Asset sharing and utilisation
- Health, fitness, education and safety
- Digital privacy and security
The new fund is another step in the maturity of the Australian venture capital sector, with more than a billion dollars set to be poured in this year.
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Signal Ventures kicked off proceedings this year, announcing a $10 million fund with the backing of some big-name US investors, quickly followed by a $20 million fund aimed specifically at helping local startups expand into China.
According to Blue Sky Venture Capital investment director Elaine Stead, it’s set to be a record-breaking year for Australian venture capital.
“We are starting to see the industry approaching maturity and a critical mass,” Stead says.