Australian government launches $191m biomedical VC fund

The Biomedical Translation Fund (BTF) aims to commercialize health and medical research discoveries in order to overcome local bottlenecks in the process of clinical trials and both regulatory and marketing approvals. Investments are expected to range between A$5-20 million for projects past the proof-of-concept stage.

Health Minister Sussan Ley formally launched the fund saying the selection of private sector fund managers would be competitive to ensure long-term health and business wins. Applications for fund managers will be open until September 14.

"This investment will ensure the most promising discoveries from world renowned, innovative Australian health and medical research will gain access to institutional growth capital to be turned into better drugs, better devices and better health outcomes for Australians," Ley said in a statement. "Without increased access to venture capital and entrepreneurial investment we risk missing an opportunity to commercialize our great ideas and research outcomes to benefit all Australians and our economy."

The fund will be administered by a specially formed committee under Innovation Australia, an independent, government-established body with a mandate that includes supporting start-ups and venture capital. Last year, Bill Ferris, co-founder of CHAMP Private Equity was appointed chairman of the body. The launch represents the culmination of a lobbying effort by sector stakeholders including Ferris and the Department of Health since 2013.

"We know we have world class health and medical research capability, but we have to do better at translating and commercializing those discoveries," Yasser El-Ansary, MRFF board member and CEO of the Australian Private Equity & Venture Capital Association (AVCAL), said in a separate announcement. "This new A$250 million commitment will play a major role in attracting much needed new private sector investment from large institutions."

BTF is the latest development in Australia's broader venture incentives and innovation agenda, which also includes a string of tax breaks for early-stage investors and the A$200 million CSIRO Innovation Fund. The CSIRO program will co-invest in new spin-off and start-up companies, products and services alongside a separate A$20 million publicly funded accelerator to begin in 2016-2017.

These efforts are aimed largely at filling a gap in Australian Series B and C investment that has resulted in only 23% of total VC funding being dedicated to bigger start-ups. Other recommendations by AVCAL to fill this gap include a fast-tracked limited partnership vehicle to encourage foreign investment into high-growth businesses, as well as the removal of regulatory impediments to superannuation funds investing more money into PE and VC.

Investor interest in Australia's biomedical technology sector was demonstrated last year with the raising of a A$200 million life sciences fund by domestic venture firm Brandon Capital. Earlier this year, the vehicle expanded its mandate to include New Zealand.

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• Topics
• Australasia
• Fundraising
• Healthcare
• Venture
• Technology
• Australia
• Growth capital
• Pharmaceuticals
• AVCAL