Govt tips extra $100m into innovation VC fund

The government has committed an extra $100 million to support venture capital investments in biotechs and other innovation-focused Australian companies.

Innovation Minister Senator Kim Carr has announced the allocation of the final tranche of funding under round three of the Innovation Investment Fund (IIF).

The IIF is a venture capital program open to private venture capital firms which provide early-stage funding for start-ups commercialising applications of Australian research.

VC firms will have until 2 July to apply for a slice of the latest round of funding, and must commit to match the government's allocation at least 1:1 with private sector capital.

Applications will be judged by statutory body Innovation Australia using criteria developed by Senator Carr.

According to the Senator, the IIF is designed to serve as a bridge to longer-term investments from larger venture capital funds.

“Venture capital has been shown to be an effective mechanism for commercialising innovative technologies into new products, services and processes,” he said.

Carr pointed to the example of Pharmaxis (ASX:PXS). The specialist pharmaceutical company, supported by the fund, is expanding its R&D and manufacturing facilities in Sydney with $10 million in new equipment to develop its cystic fibrosis and asthma treatments.

“R&D works better when it can be coupled directly to manufacturing,” Pharmaxis CEO Dr Alan Robertson said.