Jobs for NSW has underwritten a deal between niche lender Investec and H2 Ventures that will provide the Sydney-based fintech accelerator with an additional AU$4 million in funding.
Deputy Premier and Minister for Small Business John Barilaro said the government's AU$2 million loan guarantee, which comes from its AU$190 million Jobs for NSW fund, will help H2 Ventures create up to 40 new fintech startups and 400 new jobs across NSW.
The guarantee will allow H2 Ventures to access the AU$4 million loan from Investec Australia. The terms of the guarantee states that if H2 Ventures cannot repay its loan, Investec can claim 50 percent of any losses from the government.
David Phillips, head of the Emerging Companies division in Investec Australia, said the joint financing is a great example of private and public sectors working collaboratively to support entrepreneurs.
Founded by brothers Ben and Toby Heap in 2015, H2's portfolio includes equity crowdfunding platform Equitise, automated investment service Stockspot, and sharemarket visualisation platform Simply Wall St.
In September 2016, H2 Ventures launched a fintech fund H2Ocean, backed by financial and technology industry heavyweights including Link Group chairman Michael Carapiet and Atlassian co-founder Mike Cannon-Brookes.
H2Ocean was forced to withdraw from the IPO market in October 2016 after failing to raise the minimum subscription requirement. The co-founders stated that they're not abandoning the initiative, but not much activity has been noted since.
Jobs for NSW, which replaced the State Investment Attraction Scheme and Regional Industries Investment Fund, is also supporting startups through minimum viable product grants, building partnership grants, accelerating growth loans, and allocating AU$10 million to grow the state's network of incubators and accelerators.
The NSW government-backed initiative's board is being led by former Telstra CEO David Thodey.