Funding boost for Australian healthcare startups

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Australia’s innovative healthcare and biomedical research sectors are set for a boost with the launch of a new venture capital fund.

“This is a breakthrough moment for many earlier stage, unlisted companies,” said BioScience Managers’ managing director Jeremy Curnock Cook. 

“Access to funding is vital in turning ideas into life-saving products and I am confident we will see effective new healthcare products reach the market as a direct result of this new source of capital.” 

Mr Curnock Cook said small healthcare and biomedical companies were particularly suitable for venture capital investment because of the size of the opportunity and the high potential returns. 

“You need high returns to match the higher risk but with judicious selection, there is no reason why investors should not do very well out of this sort of investment,’’ he said.

The $50 million BioScience Managers Ventures I Fund is the first of a planned series of funds, designed for Significant Investor Visa (SIV) applicants and will be offered as a venture capital opportunity exclusively to clients of  fund manager BT Investment Management (ASX:BTT). 

BTIM Group Chief Executive Officer, Mr Emilio Gonzalez, said: “We are pleased to be able to provide our SIV investors with access to such a high calibre healthcare investment specialist.  The fund will provide our growing number of SIV clients with the opportunity to invest in innovative earlier-stage healthcare solutions, underpinning Australia’s ability to meet the increasing healthcare needs of an ageing population.  This provides a winning solution for both our investors and healthcare innovation in Australia.” 

Chief Investment Officer with BioScience Managers, Matt McNamara, said the fund would adopt the same strategy that has produced strong net returns for several previous funds.

“Our approach is always to be hands on with management and to take a relatively large stake in a smaller number of investments to ensure we can contribute, to make a significant difference,” said Mr McNamara.

“The companies in this fund will be at an earlier stage than our other funds, so we will help them to meet the challenges of developing management teams, adding regulatory and clinical trial expertise and being introduced to capital and international networks.”

Senior independent adviser and the former CEO of AusBiotech, Dr Anna Lavelle, welcomed the launch of the fund.

"This new fund is a step change for earlier stage companies and sorely needed in Australia,’’ said Dr Lavelle.

“Together with later stage venture funding we now have a smooth continuum of capital access that will be of material benefit to many,’’ she said.

In a separate move, BioScience Managers announced it has applied to participate as a fund manager for the Federal Government’s $250 million Biomedical Translational Fund (BTF).

Successful BTF fund management applicants will need to privately raise funds that at least match the Federal Government’s initial $250 million investment. The BTF aims to expand Australia’s innovative biomedical and healthcare sector by investing up to $500 million in companies undertaking significant clinical trials and commercialisation activities. 

“It is very important for the commercialisation of Australia’s exceptional research to have an end to end solution for providing capital,’’ said Mr Curnock Cook.

“I strongly believe that the combination of initiatives such as the Significant Investor Visa scheme and the BTF is going to greatly improve access to capital and will help to drive Australian innovation to new heights and will add certainty to the commercialisation of Australian technology which will benefit investors and the country as a whole,’’ he said.

Victoria’s Minister for Small Business, Innovation and Trade, Philip Dalidakis, also welcomed the fund. 

“Victoria is already home to over 40 per cent of Australia’s ASX Life sciences companies, with a startup sector that is growing faster than anywhere else in the country.’’

“It's fantastic that major investors are recognising Victoria's reputation and funding early stage business ideas here in this dominant sector. This is great news for Victorian entrepreneurs and for Victorian jobs,” he said.