The government’s $1b clean-energy fund may have captured the headlines, but Australian healthtech and spacetech innovators will also get access to targeted support as private investors increasingly step in to support early-stage companies in high-growth industries.
The latest injection of funding includes $2m in private-sector capital that will be available to 10 early-stage healthtech startups with the support of Australian Medical Angels, a network of over 400 doctors who have pooled funds to support innovative companies in the sector.
“Quality angel investments are a lifeline for early-stage startups,” LaunchVic CEO Kate Cornick said as the new initiative was launched, noting that healthtech is Victoria’s largest startup sector.
The network is LaunchVic’s first sector-specific angel network, coming in the wake of its moves last year to establish four new angel networks and the recommendation of noted investment academic Professor Josh Lerner’s recommendation that the organisation prioritise investments in healthtech companies, which comprise 18 per cent of Victorian startups.
That initiative led to a $300,000 grant for Australian Medical Angels, which was founded by emergency clinician and neuroscience researcher Dr Mian Bi and Sydney GP Dr Amandeep Hansra as a way of letting investment-minded doctors support their sector.
Angel investors have been linked to much-improved business outcomes for emerging startups, and the support of Australian Medical Angels has been welcomed by Kunal Kalro, founder and CEO of genomics startup Eugene Labs – who noted that the group has “a first-hand understanding of healthtech challenges and the right connections, advice and operational expertise that will help Victoria’s sector scale globally.”
Access to mentorship and networking is also core to the CSIRO’s newly-launched Innovate to Grow: Space program, which is accepting applications this month for a 10-week focused initiative designed to help small to medium enterprises (SMEs) better focus their efforts in the space sector.
Aiming at emerging areas such as small satellite technologies, remote operations and robots, earth observation and microgravity science, the CSIRO program – which follows a similar program for agrifood businesses – will link SMEs with industry experts working with the support of program collaborator the Australian Space Agency.
Collaboration is key to the growth of Australia’s space industry, noted CSIRO space research program director Dr Kimberley Clayfield in launching the new initiative – which, she said, taps the agency’s 75 years of space-related experience with “leading global companies, international space agencies and small-to-medium businesses”.
“SMEs have a lot to contribute,” she said, “and when combined with our strong capabilities in Earth observation, robotics, advanced manufacturing and communications, the sky is no limit to what we can achieve together.”
Engaging the private sector
The new programs, which were announced contemporaneously to the Commonwealth government’s announcement of $1b in clean-energy funding, highlight the vast gap in funding between industries that support policy priorities and those that are often left to bootstrap their equally innovative efforts.
The government’s Modern Manufacturing Initiative, for example, spread just $14m across a handful of established spacetech projects as the fledgling sector competes with companies across other key industries including medical products, mining, food and beverage, defence, and sustainable industries.
The federal government will provide half of that funding and raise the other half from private investors – a far higher proportion than the 15 per cent that Victorian Government-funded LaunchVic will contribute to its healthtech angel fund.
This disparity highlights the importance of private-sector funding in providing critical mass for startup ecosystems where access to capital is crucial to overcoming commercial inertia – which is often, as one National Bureau of Economic Research analysis found, self-imposed.
Availability of angel funding had a “positive impact on the growth, performance, and survival of firms as well as their follow-on fundraising”, that report concluded, regardless of the country’s ‘entrepreneur-friendliness’.
Startups applying for angel funding tended to be more-mature in countries with low levels of entrepreneur-friendliness – suggesting, the study’s authors posited, “self-censoring by very early-stage firms that do not expect to receive funding in these environments.”
In other words, startups are waiting until they have grown to a certain size before applying for funding designed specifically to help them achieve that growth.
Melbourne ranked 36th in Startup Genome’s recent Global Startup Ecosystem Report 2021 but came in at 24th in the Life Sciences ranking – which rated the city’s life-sciences community as being strong on talent and infrastructure but weak when it comes to funding, knowledge, and policy.