The South Australian government has selected Blue Sky Venture Capital to manage its $50 million South Australian Venture Capital Fund, making the announcement at startup festival SouthStart.
Dr Elaine Stead, head of venture capital at Blue Sky, will be managing the fund.
Stead believes the SAVCF fund will play a “huge role” in boosting the local startup ecosystem.
“South Australia has been more vulnerable than most from some of the structural changes in the economy,” Stead says.
She notes that while the state is on par with the likes of Victoria and Queensland in terms of R&D funding and SMEs per capita, there are “woefully low amounts of capital invested in South Australia,” which means startups can’t convert their businesses in to high-growth companies.
“We want to address that market failure with a goal to try and increase the number of high growth companies…to help address some of those structural changes in the economy,” she says.
Reinforcing the crucial role startups play in the new economy, Stead notes that high growth startups “can transform an economy within a decade, instead of trying to wait another century to build up industry strength.”
Instead of targeting specific sectors like Agritech of Fintech, Stead notes Blue Sky will cast a wide net over the startup ecosystem, after being chosen for its “generalist investment strategy.”
Blue Sky’s Adelaide team will also include Michael Ng and Mark Watson, as well as a yet to be announced female member that Stead says will make an “excellent contribution” to the team.
Blue Sky VC has invested over $340 million in South Australia over a decade, Stead says, and has invested a further “$40 million in the last couple of weeks”.
The SAVCF is structured as a co-investment fund, which will enable the state government to invest alongside private VC funds to grow South Australian startups.
“The thing that I really noticed [in Adelaide startups] is that there is less understanding…that they can access VC to supercharge their business – the don’t go out and seek it like other states,” Stead says.
“This fund will help build a profile for SMEs that there is capital available.”
The announcement comes as Elon Musk headed to Adelaide to announce that Tesla will build the world’s largest lithium ion battery in conjunction with French company Neoen to power South Australia.