A new $30 million venture capital fund has been announced on the back of rapid growth in the Australian start sector and recent government reforms surrounding tax incentives.
Aura Group has unveiled the new fund, which will aim to “harness the power of the ideas boom” by providing Series A rounds to mostly Australian startups.
The establishment of the new VC fund was rapidly brought forward in order to take advantage of the government’s recent reforms of the Early-Stage Venture Capital Limited Partnerships and tax incentives that were passed by the Senate this week.
Aura Venture Fund general partner Calvin Ng says the announcement comes at a time when investors are “increasingly turning to venture capital as an alternative asset class”.
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“Launching the Aura Venture Fund was the natural next step of progression for Aura Group in regards to our venture capital offeing,” Ng says.
“We have been helping build great Australian businesses for quite some time and the Aura Venture Fund under an ESVCLP structure offers our investors very attractive tax incentives to make investments in innovation.”
The Aura Group was an early backer of Catapult Sports, now a publicly-listed giant of the Australian tech scene.
The new VC fund will target startups with “sizable” revenue and a proven concept that are looking to rapid expand and have a clear path to profitability.
Other key elements the organisation will be looking for in a startup include a strong management team and a deep assessment of the business environment.
“If a company does not possess all of these characteristics – we simply will not invest,” Ng says.
This is something that will set the new VC fund apart from the pack, he says.
“Unlike a large number of venture capital firms, we generally only invest at the growth and expansion stages of the funding cycle,” Ng says.
“We believe this gives every portfolio company the best chance of succeeding through the opening up of debt and hybrid funding markets and strategic M&A opportunities.”
Australia has seen a record amount of funds going into venture capital this year, with nearly $1 billion already announced.
But many say the sector is still just approaching maturity and is nowhere near saturation levels yet.
Big announcements this year include Signal Ventures, a $10 million fund with the backing of big-name international investors, and the Dragon Egg Fund, a $20 million cash pool aiming to help local startups crack into the China market.