Tech startups with at least 50 per cent female ownership will be eligible for substantial financial support from a new $10m fund established by Victorian startup support firm LaunchVic.
The organisation’s new Alice Anderson Fund – named after the founder of Australia’s first all-women motor garage, in Kew, Melbourne, in 1919 – has been structured as an investment ‘sidecar’ in which private investors will match the Victorian government’s contributions 3:1.
That could potentially open up $30m worth of private-sector investment for women-led businesses, with between 40 and 60 individual companies eligible for between $50,000 and $300,000.
The state government will take 85 per cent of its contribution as equity, with the remaining 15 per cent provided as a non-dilutive grant that keeps the equity in the hands of the company’s founders.
Local and international angel networks, early-stage VCs and individual investors will qualify for support, which was allocated in an 2021 Victorian Budget that also included $60.5m for the Victorian Startup Capital Fund ‘Fund of Funds’ and $40m for LaunchVic over four years.
To be eligible for funding, companies must be either 50 per cent owned by at least one woman, or there must be a 30 per cent ownership stake by women – including one woman in an executive role.
The decision to explicitly support women-led startups is specifically targeted to address the “significant minority” of such firms at every stage of the startup lifecycle, Victorian Minister for Innovation, Medical Research and the Digital Economy Jaala Pulford said in launching the new funding, for which applications are open until 1 July.
“This is a pivotal time to support women entrepreneurs to drive economic growth and create new jobs,” Pulford said, adding that the fund “will help level the playing field and ensure more women-led companies have access to the early-stage capital they need to take their startups to the next level.”
States taking the lead
Coming in the midst of a budget-busting pandemic, Victoria’s latest budget has been heralded by business leaders as “set[ting] a new bar for the level of government commitment to innovation”, with AirTree Ventures partner James Cameron noting that “the signalling behind this budget is just as important as the way it is spent”.
The indices are part of a growing awareness of the economic potential for women-led businesses to tap into high-growth startup opportunities – of which, state government startup mapping found, women comprise just 20 per cent and attract just 15 to 18 per cent of capital raises over $1m.
The low representation of women in startups is also reflected in exit outcomes, with just four women-led startups managing to lead their companies to an IPO during 2020 – and last month’s IPO of dating app Bumble giving co-founder and company head Whitney Wolfe Herd a net worth of around $2b.
The disparity between men and women-led startups “affects the whole startup ecosystem”, LaunchVic chief executive Dr Kate Cornick said, encouraging investors “to start reviewing their pipeline for those talented women founders, so we are ready to invest come July.”
Victoria’s funding – which Cornick called “exactly what is needed to help grow our early-stage venture capital landscape” – isn’t the only funding available to women-led companies.
The Commonwealth government’s $52.2m Boosting Female Founders Initiative is also currently accepting applicants, with its second round of grants offering from $25,000 to $480,000 to support female-founded startups that are ready to scale their businesses domestically and globally.
Previous major funding recipients under that program include social-engagement firm Catalyser, silent-disco provider Discodtours Australia, intelligent home AI firm Akin Australia, oncology management firm Episoft, heart disease screening firm Eugene Labs, and others.
“Victoria has many modern-day Alice Andersons,” said Victorian Minister for Women Gabrielle Williams, “and we’ll continue to back their innovation, excellence, vision and commitment.”