LaunchVic will take a more active role in the delivery of services and focus on growing the Victorian angel investing sector as part of a new one-year strategy.
This year’s Victorian state budget allocated $10 million for LaunchVic to “continue its work supporting local startups and to attract world-class innovation and investment projects that grow jobs and productivity across the state”.
The budget allocation only provided for one additional year of operation for the startup and innovation agency, with a review conducted into its future focus.
LaunchVic was originally tasked with deploying the state’s $60 million innovation fund in early 2016 and has now revealed a new strategic focus for it additional funding.
It will be shifting its focus away from startups and towards later-stage scale-ups, LaunchVic chief executive officer Kate Cornick said.
“In addition to continuing to support the early-stage companies, we’re looking to do more work to support scale-ups,” Dr Cornick told InnovationAus.com.
“We’ve done a lot of work in Victoria around putting in place accelerators, and there’s been an increase in the market and we’re seeing a lot of successes coming through, she said.
“We hear from those startups that they get the post-accelerator slump, and about the challenges these companies have as they scale. Three years ago the challenges were about getting early-stage startups the support they needed to establish. Now we have a steady supply we need to turn our attention to the scale-up strategy.”
It has identified five key areas of focus: building a robust investor community, growing startups to scale-ups, increasing startup creation, researching and monitoring the ecosystem and promoting, connecting and advocating.
LaunchVic has previously shied away from investing directly in startups, instead focusing on the surrounding infrastructure of the ecosystem. Its new strategy will see it playing a more active role in the direct delivery of services.
LaunchVic has run 10 funding rounds across its near-four years of existence, but over the next year it will instead focus more on direct funding and supporting the existing companies and the programs it supports.
“We’ll continue to seek applications from third parties, but we may not do it at the same rate as early days, given we’ve got programs running and we want to continue to support programs doing great work and also fill gaps where we need to and use the levers we have at our fingertips to do that,” Dr Cornick said.
LaunchVic’s main focus for the next year will be on growing the local angel investor sector in Victoria.
“At a macro level, the story for VC is very positive. There’s been an increase in capital flowing into the Victorian startup community, but when you delve into the data there’s a diminishing amount of capital flowing to seed and early-stage companies,” Dr Cornick said.
“Ultimately we want to make sure that startups are successful in raising capital so they have the runway to prove themselves and go on to raise a Series B.”
To do this, the agency will lobby government for investor supports, supporting the growth of local investor networks, training investors and running events. It already as an EOI open for support for Victorian angel networks.
The agency will continue to support Victorian startups by funding programs that support startups and encourage diverse founders. It will also continue its collation of data on the ecosystem too.
LaunchVic also plans to launch a digital hub as a resource to connect and showcase the Victorian tech sector, and lobby the state government for friendly policies.
LaunchVic’s previous strategy covered 2017 to 2019 and had similar focus areas: more founders, stronger angel investor community, better connections between startups and corporates, more businesses scaling successfully and more sustainable startups.
In this year’s budget the state government gave LaunchVic the task of supporting at least 70 companies or new entrants in the financial year, down from a target of 120 in the previous year, signalling a “more targeted focus”.
While it was only funded for one more year, state Innovation Minister Martin Pakula has flagged his intent to keep LaunchVic running beyond that.
The organisation is still in discussions with government for ongoing funding, Dr Cornick confirmed.
“Making sure the startup sector is well-funded commensurately with global ecosystems takes up an enormous amount of my time. The Victorian government is very supportive and continues to be – we’ve had very positive discussions,” she said.
“At the end of the day it’s a decision for the Victorian government, but we are moving very positively. There’s a recognition that we are a very important part of the Victorian economy and that our sector is creating jobs.”