AVCAL recently launched The Venture Capital Effect – a report on the venture capital industry’s impact on the Australian Economy.
The report touched on the various ways in which the sector improves our economy’s ability to innovate by providing vital funding to the startups and early stage businesses which have the ideas to make and change industries – and technology is a key part of this.
As we see in section three, VC was instrumental in the establishment of the fintech sector with the creation of a not-for- profit fintech focused startup accelerator – Stone & Chalk. In 2016 alone, a healthy 47% of VC investment flowed into ICT, with a growing trend toward supporting fintech start-ups.
Ongoing investment in local technology companies means those ideas and jobs are now staying in Australia rather than being sent offshore to larger tech centres.
Right Click Capital’s own Internet DealBook also points to a trend of Australian tech businesses attracting international investment – with SaaS and Transactions companies driving the activity.
Technology is helping Australian businesses scale-up and take on global markets, faster and more easily than before.
Another interesting fact which I garnered from the Report is the strong support the community has towards science and innovation, with a recent ANUpoll showing 68% of people are more excited than concerned about new technology, and 75% believe the benefits outweigh the risks. This is heartening news, showing the public has a sophisticated view of the future.
This highlights that Australia is ready and embracing the technology trend and venture capital is key to fuelling these tech startups that are, in turn, driving our economy.
So, how do we continue to support our vital VC sector?
The future is certainly bright for our sector, with around $1 billion being raised this financial year alone including $500m for the Biomedical Translation Fund and $100m allocated by the Government to the CSIRO Innovation Fund, all of which we can expect to be deployed in the next few years.
While this is a good sign, our sector remains small by world standards and there are some things we need to tackle in order to become an innovation leader – including competitive policy settings which continue to support innovation; a superannuation system willing to make greater allocations to VC by recognising that our economy is transitioning away from resources and towards the jobs of the future; and by some of our country’s biggest corporate brands supporting innovation through their own VC investments.
Given time, we believe Australia can fulfil its potential to become an innovation leader. A thriving VC sector is essential to that transition.
Article by Yasser El-Ansary, AVCAL CEO
