As the Victorian state endeavours to get people back to work to combat the government’s COVID-19 induced recession, it has specifically directed tremendous support to boost and foster Victoria’s innovation, R&D and commercialisation ecosystem like it has never before. The Andrew’s governments bold budget is set to place Victoria on the map as a global leader in R&D and tech with a specific focus on health and life-sciences, agri-food, advanced manufacturing, clean energy and digital technologies.
But what does it all mean for your start-up venture or tech company? What’s in it for you? Below we summarise the key initiatives and opportunities available.
$2B Breakthrough Fund
Tech companies looking to translate and catapult R&D and innovation into a tangible commercial outcome may access a portion of the $200M funding allocated per annum over 10 years (in addition to significant investment expected from other industry, university and government sources). Projects will be expected to be undertaken in conjunction with institutes and industries located in one of Melbourne’s key innovation hubs at Parkville, Arden Macauley, Fishermans Bend, Latrobe Bundoora and Monash Clayton. This fund is expected to create and support 15,700 jobs in priority industries.
R&D Loans for Victorian R&D Companies
Small to medium enterprises (SMEs) that access the refundable R&D Tax offset for undertaking eligible R&D activities under the R&D Tax Incentive program may now access a low interest loan facility to help fund R&D activities.
$50M has been allocated to the establishment of this new initiative which will provide up to 80 per cent of the company’s forecasted refundable tax offset to assist SME companies undertaking R&D with cash flow to fund their R&D activities during the year they incur the R&D expenditure, rather than waiting for the end of a financial year to lodge an R&D claim and receive a refund. It is expected the government will take its cut from the R&D refund that will be received by the company.
The Victorian Start-up Capital Fund
The State government is set to invest $61 million over three years to support early-stage start-ups. If your start up is in need of capital, you may have the ability to access a pool of $500,000 this year, $20 million in 2021-22, followed by $40 million in 2022-23.
Venture Growth Fund
A new option for scale-up companies needing cash flow assistance predominately this year is the $25 million short-to-medium term venture debt facility (which the government will co-invest into with a private investor) which is aimed for companies that aren’t able to access traditional loans. Only $100,000 is allocated to it for the following three years.
LaunchVic will receive $10M over 4 years to offer continued support to Victorian angel and early-stage investor communities and start-ups in the government’s priority sectors to ultimately create jobs and drive innovation and productivity growth. LaunchVic will also focus its efforts in regional Victoria to boost and promote entrepreneurship in the regions.
In addition, the CivVic Labs Accelerator Program will continue to provide an opportunity for start-ups to assist the government solve public sector challenges.
Women’s Founder Angel Sidecar Initiative
Female founders in the start-up sector may access a pool of capital worth $10 million over three years (to be offered by LaunchVic) to incentivise the participation of women in Victoria’s start-up economy and create new high-value jobs for them.
Other various opportunities are presented for tech companies to get involved with the Government’s plan to:
- Improve cybersecurity for the Victorian public sector ($7.5M allocated), by provision of tools, software and services to better protect the sector from malicious attacks
- Drive the state’s digital transformation in the public sector ($180M)
- Develop software for a contact tracing system for venues ($4.5M)
- Creation of a single digital solution for COVID-19 reporting of whole-of-government data. ($4.6M)
- Develop and pilot an advanced digital platform for the ‘Digital Twin Victoria’ initiative to aim to transform the State’s management of its built and natural environments using 3D models and spatial data innovation ($1.7M)
- Support for high-potential defence opportunities and a digital
- Capability uplift program will also help to promote a competitive advanced manufacturing.
Start-ups and companies involved in biotech, medtech and life sciences in general may benefit from:
- A pool of $210 million of funding has also been allocated for a number initiatives which will strengthen Victoria’s position as a leader in biotechnology and medical research, to support jobs and improve health outcomes, involving:
- The establishment of (and access to) a new Australian Institute for Infectious Disease
- a potential future establishment of a National Centre for Inflammation, led by the Hudson Institute
- continued support for the Melbourne Genomics Health Alliance to provide genomics medical technology to Victorians
- Involvement in a respiratory challenge trials project, in which the Government will take an equity stake in
- Coronavirus (COVID-19) research to support the development of treatments and responses that address its immediate, medium and long-term health impacts.
- $33M contribution to the Victorian biomedical industry to advancing the objectives of the Medical Research in cancer and Health portfolios to improve patient outcomes
- For companies involved in driving innovation clinical trials and research specifically for Melanoma, $25m has been allocated to co-locate Victorian Melanoma Service, Alfred Cancer Services and the Australian Clinical Trials Centre will be next to the Alfred Hospital to foster and drive innovation and research in this field
- A new $20M Australian MedTech Manufacturing Centre (AMMC) is poised to support local businesses to collaborate and pursue MedTech opportunities.
- Companies looking to innovate to reduce waste, transform recycling services and obtain increased value from recycled materials will be supported from a pool of $58.3M of funding for their R&D and innovation efforts to create new market opportunities for recycled products.
The strong investment by Victoria into R&D for start-ups and tech is part of a longer-term Labor Government strategy to support innovation, stimulating and driving our economy though commercialisation of Victorians ideas, job creation, and bringing business opportunity to Victoria.
Let’s hope this financial support and government backing will be enough to help innovators on their entrepreneurial journey to cement Victoria as a global tech and biotech hub. If it fails to meet that aspiration then maybe a more holistic revamp of the Australian innovation ecosystem would be required, because it certainly has the financial backing it needs to boost it. Is throwing more money at it the answer? Time will tell.