AI scale-up accelerator Boab AI has officially launched, with the first cohort and $1.5 million in investments announced. And for managing director Andrew Lai, this isn’t just a turning point for the five businesses in question, it means a boost for the whole Aussie AI tech ecosystem.
The launch this week represented the first investments of the $100 million Boab Global AI Fund, backed by VC firm Artesian.
Each startup selected for the accelerator receives a $300,000 initial investment, and is eligible for up to $5 million in follow-up funding.
The fund will invest in both local and overseas startups, a strategy Artesian managing partner Matthew Clunies-Ross says is intended both to boost local talent and draw on international expertise “to build a complete ecosystem”.
The Victorian government also contributed $1.5 million to the program through its startup agency LaunchVic.
First announced in June last year, the six-month program is focused on supporting businesses that already have a fairly mature product, and customer validation in some capacity, Lai tells SmartCompany.
These are not lean businesses at the very early stages. In fact, “in some cases, they have millions in revenue”.
That means they have varying needs, and the accelerator is set up to provide tailored support to each of them.
Some, for example, might be gearing up for a Series A round, in which case the program would focus on investment advisory and support — helping the founders hone their pitch, refining their models and documents, and introducing them to investors.
Others might be looking or assistance in their PR and marketing efforts, or general business coaching.
Five businesses have bee accepted into the first cohort already, and applications for the second are expected to open next month.
At the moment, there’s a skew towards enterprise Software-as-a-Service startups, but that was by coincidence rather than design, Lai says.
Or perhaps, he concedes, it’s indicative of an area in which Aussie tech companies have seen particular success, historically.
Boab AI is sector agnostic, requiring only an AI element to any business is backs.
“We always refer to AI as a horizontal as opposed to a vertical,” Lai explains.
“AI technology can be used in any industry.”
The startups in Boab AI’s first cohort are:
- PI.EXCHANGE, a machine learning platform designed to reduce the barriers to AI and machine learning for organisations;
- Remi AI, a tool focused on demand forecasting, supply chain and price optimisation;
- Strongroom AI, a digital gateway medtech business allowing fast and safe access to specialised treatment plans;
- Plaetos, a virtual forum for businesses, allowing employees to share knowledge, ideas and opinions; and
- Daitum, a decision-making platform automating prescriptive analytics.
For Lai, the accelerator, and the involvement of both the local government and a VC industry player, represents the beginning of a maturing of this sector in Australia.
And he says it’s more than a little overdue.
According to Lai, investment in AI in Australia is at about a sixth of what you would expect when compared to GDP, and “tremendously lower” than I deployed in other regions.
That’s one of the biggest barriers to growth, both for individual startups and the ecosystem more broadly.
Actually building a business isn’t the problem, he suggests. Founders no longer have to build their own hardware and host their own software.
“At the early stage, it’s never been easier to actually start a business.
“What’s really lacking is growth capital.”
The AI ecosystem in Australia, and really internationally, is still in its infancy, Lai says. Rather than being a sign of growth here, Boab AI is a catalyst for it. We’re just getting started.
“I’m not saying it’s a silver bullet solution, but it’s something that can help grow [the sector],” he says.
“We’re very keen on helping early-stage companies to continue their growth trajectory.”