Queensland’s startup investment pool continues to grow with four more venture capital firms agreeing to expand in the state in exchange for backing from the Miles government’s new development fund, which is being lauded as one of the most significant innovation plays in memory.
Jekara Group, Tidal Ventures, Sprint Ventures, and Brandon Capital on were announced on Monday as the latest participants in the $130 million Queensland Venture Capital Development Fund (QVCDF). They join five inaugural firms in receiving up to $20 million each.
The firms must provide their own matched funding, establish or expand operations in Queensland and are required to invest 1.25 times the QVCDF contribution into local startups.
While the value of each QVCDF investment has not been revealed, it is understood that remaining funding will be committed to another four VC firms.
So far, the VC firms backed through the fund have invested more than $8 million across seven local startups.
The QVCDF was announced as a $75 million initiative in mid-2023 but was expanded to $130 million after being inundated by applications. The first five VC firms to receive funding were announced in February, when $30 million of the fund was set aside for startup accelerator programs.
Cleantech focused Jekara Ventures managing partner Kara Frederick said the QVCDF is creating one of the “most significant” mandates for venture capital in many years.
She told InnovationAus.com no program run by an Australian government “has been as clear and as transparent, as comprehensive, and as large” in targeting the attraction of venture capital, putting much of the success down to its administration by the Queensland Investment Corporation (QIC).
“In perhaps the single-largest VC program of its kind, QIC-managed VCDF is mobilising investor and entrepreneurial talent nationwide,” Ms Frederick said.
“Emerging managers and teams with non-traditional VC backgrounds are included. Having worked on Sand Hill Road & Wall Street, I appreciate the critical importance of [limited partnership] mandates like this for the future of innovation.”
Ms Frederick, who was an early backer of electric vehicle charging company Tritium, said that capital is a vital ingredient to startup systems, comparing the Queensland co-location effort to Silicon Valley’s proximity to Sand Hill Road, where many venture capital firms are located.
The latest expansion of the QVCDF will also see the QIC become a cornerstone investor in the Brisbane-based early and growth-stage focused firm’s upcoming fund, subject to it matching.
Sprint Managing Partner Georgia Barkell said the support will increase the number of investments made by the fund across healthtech, aged care, climate and infrastructure tech, AI and automation.
“With excellent universities, well-equipped hospitals, government funding, and innovation hubs like LuminaX, the state is well-positioned to lead the way in digital healthcare solutions,” Ms Barkell said.
“We’re also seeing the ClimateTech sector boom fuelled by government investment in renewables and cutting-edge conservation solutions.”
The expansion also sees the QVCDF joining Brandon Capital’s new $270 million fund and it luring Sydney based Tidal Ventures to the state in exchange for matched funding.
Tidal VC founder and managing partner Grant McCarthy told InnovationAus.com the QVCDF backing accelerated the firm’s decision to expand into Queensland, but it will continue to engage with other state programs that “nurtures early-stage innovation and supports Australian technology companies to scale globally”.
Tidal VC’s senior investor and ex-Atlassian M&A manager Felicia Lal will move to Brisbane to support its Queensland operations as part of the expansion.
Jekara’s Ms Fredericks said the injection of risk capital will pay off in indirect ways as well, pointing to Tritium founders and management that have gone on to start hydrogen technology company Endua and another EV charging company EVOS Energy.
