The Victorian government will continue funding its startup agency LaunchVic beyond next year, but a review into its future focus is underway, state Innovation Minister Martin Pakula said.
Addressing a Public Accounts and Estimates hearing on Tuesday, Mr Pakula was questioned over why LaunchVic was only allocated $10 million in 2019-20 in last month’s Victorian budget, with no guaranteed ongoing funding.
The Opposition accused the government of “taking the axe” to LaunchVic, with the agency previously receiving $60 million over four years to the end of this financial year.
But Mr Pakula denied that it was a cut, nor that any of its programs will have to be shed.
“You may characterise that as a reduction, but the fact is that as the Treasurer has indicated, there has been a revenue write-down over four years of something in excess of $5 billion. I don’t think anything will be cut,” Mr Pakula told the hearing.
The Innovation Minister flagged a new direction for the agency, with discussions underway to refocus its efforts on later-stage tech companies.
“You will note that in the budget papers, the number of startups to be supported is not the same number as it has been, and one of the reasons for that is that LaunchVic has a view, and it’s a view that I agree with, that it may well be appropriate over the next few years to focus less on those early-scale startups and potentially to provide some great support for the later-scale and more mature startups,” Mr Pakula said.
LaunchVic was set a target of “supporting” at least 70 companies or new entrants in 2019-20, down from a 120 goal in the previous year and 122 in the year before.
The agency was officially launched in early 2016 under previous innovation minister Philip Dalidakis, and has since ran 10 funding rounds focused on different elements of the Victorian startup ecosystem. The agency provides funding for programs and support organisations like accelerators rather than individual startups.
Mr Pakula said he would have further discussions with LaunchVic chief executive Kate Cornick over funding beyond 2019-20.
“You would probably appreciate that it’s difficult for me to make predictions about what will happen in next year’s budget, but it will certainly be my fervent desire and intention that it will,” he said.
“One of the reasons that the government made this a one year commitment is because we are going through that process I described, and that will form the basis of the longer-term approach.”
A Victorian government spokesperson said a “review” of LaunchVic is currently underway, which would likely lead to a refocusing of its programs.
“LaunchVic funding has been renewed for one year. During that time the government and LaunchVic can review and refocus on the next phase of initiatives, including consideration of more targeted interventions to strengthen our startup ecosystem and encourage strong jobs and investment outcomes,” the spokesperson told InnovationAus.com.
“The scope of LaunchVic’s initiatives for 2019-20 are currently being developed by LaunchVic in conjunction with the department. The next phase of LaunchVic initiatives is likely to have a greater focus on more mature startups and early-stage companies.”
Shadow innovation minister Mary Woolridge said the Labor government had cut funding to LaunchVic, and warned against the planned change in direction.
“Establishing Melbourne as the premiere location for startups has never been more within our grasp, but Daniel Andrews is taking an axe to our startup and innovation agency,” Ms Woolridge told InnovationAus.com.
“How can LaunchVic be expected to effectively help build the startup ecosystem and support early-stage innovative businesses with funding cut to $10 million next year and no commitment for funding beyond that?”
“It’s vital LaunchVic doesn’t abandon early-stage startups as they look to reorient operations in the future.”
The Coalition has previously been highly critical of LaunchVic, and in late 2017 attempted to force an inquiry into the organisation following the 500 Startups controversy, where a funding grant was eventually pulled after harassment allegations were made against the US accelerator’s founder.
The Opposition had attempted to launch an inquiry into LaunchVic’s governance, business activities, recruitment, funding and criteria and the appropriateness and use of funding provided by the state government in the context of its objectives.
Do you know more? Contact James Riley via Email.