The University of Wollongong (UOW) has launched an AU$10 million seed fund aimed at providing a pipeline of early stage business development for young tech startups, in order to attract outside investment.
The initiative is part of the university's iAccelerate initiative, a co-working space and program that was launched in 2012 to provide support for first- and early stage business development.
Artesian Venture Partners will manage the seed fund, with PricewaterhouseCoopers advising on the structuring of the fund.
According to Artesian Venture Partners, the seed fund is designed to provide seed and follow-on investment in early stage, capital-efficient, technology-focused startups from the university’s iAccelerate program.
Artesian Capital Management managing partner Jeremy Colless said that funding at the initial and early stages of business development plays a vital part to a startup's eventual success, particularly in areas outside of the country's major cities.
"We know that the younger an enterprise is, the more support is required, and early stage or angel funding can often be a challenge for startups in regional areas," said Colless. "This seed fund will give startups a great financial leg up, while the iAccelerate programs will support them through education, coaching, and mentoring. We believe this multifaceted support will attract some great entrepreneurs in the Illawarra."
CEO of iAccelerate and director of innovation and commercial research at UOW, Elizabeth Eastland, said the launch of the seed fund comes at a time when many entrepreneurs are heading offshore to gain access to venture capital investment, mentors, and networks.
"Historically, early stage venture funding in Australia has been difficult to source. Despite Australia having a GDP of about 10 percent of the United States, Australian venture capital funding over the past 10 years is only 1 percent of the amount raised by the US," said Eastland.
"UOW supplies large numbers of ICT graduates, and it is in a unique position to attract the best startups to the region, which we hope will grow a hub of innovation in the Illawarra. We now need the dedication of early stage investments in Australia’s innovation future," she said.
All companies accepted into the iAccelerate program will be able to apply for the seed funding, lowering investor risk due to the support and development provided to the startups through the program and its assessment process.
iAccelerate employs a multifaceted approach, with a two-stream program, and up to a three-year incubation period, aimed at accelerating sustainable business growth to deliver the greatest economic impact.
The program's two streams include iAccelerate Start, a co-working space for entrepreneurs with first-stage ideas, and iAccelerate Advanced, which is focused on enabling more advanced startups to transform and scale into sustainable and globally focused companies.
The program's mentors include Anthony Marcar, the founder of Grabble, a mobile shopping technology startup with roots in Wollongong that was acquired by Walmart in 2011, and Hamish Hawthorn, CEO of Sydney-based technology business incubator, ATP Innovations.
Startups participating in the program will also benefit from the purpose-built high-tech incubator facility, following the start of construction last month of the 4,000 square-metre iAccelerate Centre at UOW's Innovation Campus. The centre will provide space for more than 280 entrepreneurs.
The NSW government's Restart Illawarra Infrastructure Fund, which provided AU$100 million in NSW government funding for 12 projects in the region, contributed AU$16.5 million in funding for the centre. The funding was announced in December last year.