The VC Market in Australia

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Venture capital is relatively new even though equity financing for promising ventures that were fast growing has been around for a very long time. Merchant banks have been around since the Middle Ages and the investment bank made its appearance in the 30s. “Business angels” came onto the entrepreneurial playing field in the 20s when Broadway musicals would be funded by wealthy patrons who would provide the monies needed by producers to fund the new shows. But the VC industry has only been around as we know it since the 90s. Efraim Landa is an experienced venture capitalist who provides expertise and funding to encourage the growth of a business until it matures. Venture capitalists provide the monies to help a business grow until it can go public with its offering of stocks or sell out to a larger entity. VC is an essential part of the economy in most regions of the World.

History of Venture Capital in Australia

Australia took the plunge into VC investments much like the US except on a smaller scale. Australia has continued to strive toward developing a strong VC market since the early 80s. They tend to focus on entrepreneurship founded in a strong technology base and over the last 30 years they have begun to emerge as one of the major VC hubs in the region. In 1987, Australia concentrated on developing the VC market and instituted the Management & Investment Companies. From what they learned through the limitations of MIC they were able to give birth to the Pool Development Fund in 1992. The trouble with this group is that it undermined the government in order to grab opportunities to fund younger companies which were focused on technology. The late 90s were relatively rocky with various institutions making an attempt to build a solid structure for the VC market but it wasn’t until 2002 when the government founded VC companies which were designed to emulate the structure of the United States’ limited partnership structure. Over the last decade the economy of Australia has changed and settled down until the VC climate in Australia is prime.

Changing Focus

The primary focus of VC funds in Australia continues to be seed, early stages and startups. Some have tended to consider the VC funding available in Australia more as development capital. Companies which receive VC funding are categorized most are technology related but a significant amount of VC funding still seems to be in the field of bio-technology. Since 1998, venture capital funding has been playing a role in the market place. And by 2005, there had been a role shift in which the VC funding began playing a more dominant role.

Future of Venture Capital in Australia

The Australian PE and VC Association reported in 2012 that there was more than $26 billion worth of venture capital and private equity investments in Australia. Since 2007 it has been rocky and much more difficult to raise funding. It is probably that over the next few years the venture capital industry will shrink in Australia. It seems that there is a move away from venture capital investors toward the open stock market. The biggest concern right now in Australia is finding funds for venture capital. Inside the region’s infrastructure there is plenty of competition for funding from various other sectors.  However, recently there has also been a surge in entrepreneurship in Australia which is still looking for startup funding or capital for expansions. The Australian Investment Network is making an attempt to match businesses with investors. The government has also promoted investments by offering tax exemptions for some sectors. Recent changes such as these are helping to create an economic climate which is encouraging VC investments and Australia is becoming a very appealing market. It is expected that we will see substantial growth over the next few years.

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About Efraim Landa

My name is Efraim Landa I am an entrepreneur and an expert in venture capital. I am the co founder of Effi Enterprises, a venture capital firm as well as the co founder and CEO of Gluco Vista, a company that is in the process of developing a non invasive glucose meter for those with diabetes.

Posted on August 22, 2013, in Effi Enterprise, History of Venture Capital, VC Firm, VC investments, Venture Capital, Venture Capital Markets and tagged , , . Bookmark the permalink. Leave a comment.

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