The Western Australian government on Thursday announced it will invest $30 million into venture capital funds looking to set up in the state if they support local startups in priority sectors.
The ‘fund of funds’ model, revealed by InnovationAus.com last month, will back venture capital (VC) funds that can attract $2 dollars of private investment per $1 of public investment. The funds will need to invest at least 1.25 times the government’s contribution in local startups.
This follows a similar VC attraction model in Queensland, however the Western Australian version will be run under two industry targeted streams by government departments.
The Department of Jobs, Tourism, Science, and Innovation (JTSI) will run the industry and technology development stream. It will target seven priority sectors including energy, defence industries, METS, space industries, and international education.
Meanwhile, the Department of Health will administer the future health research and innovation stream, with funding to come out of the existing Future Health Research and Innovation Fund – one of the state’s sovereign wealth funds.
The program has been on the cards since 2021, after Deloitte recommended developing a plan to grow the state’s VC market in a review of Western Australia’s innovation ecosystem.
The funding for VCs follows an earlier WA Venture Support (WAVES) program that committed up to $900,000 to three venture funds over the next three years to help with set-up costs. A program run by LaunchVic similarly helped VC funds set up local offices in Victoria.
Innovation and Digital Economy minister Stephen Dawson said growing the state’s venture capital ecosystem will “encourage more investment and encourage others to choose WA as a base of operations and the place to innovate”.
“The WAVC Initiative will leverage private sector experience to provide start-ups with essential capital, expert guidance, and support to grow,” Mr Dawson said.
“I am looking forward to seeing how the WAVC Initiative will help create new opportunities to support local start-ups grow and contribute to a thriving innovation ecosystem in WA.”
Queensland has used its similar but much larger $130 million VC attraction fund to bring in nine firms over the last year and fund startup accelerator and diversity initiatives.
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