The amount of venture capital investment into Australian start-up businesses and projects hit a new record last financial year, US$630 million, with one industry a stand-out attraction for investors.
That is according to accounting giant KPMG’s Venture Pulse for the second quarter of calendar 2018.
Additionally, KPMG suggested that while the number of deals had fallen slightly quarter-on-quarter, the amount of funds invested in each deal increased, with US$209.09 million of that funding allocated in the June quarter alone.
Agtech was, and continues to be, one of the most attractive investment options for venture capitalists, with US$1.7 billion invested in 2017, and a further US$600 million invested in just the first five months of 2018.
“Venture financing continues to rise in Australia, keeping pace with worldwide trends. It is encouraging to see Australian start-ups gaining access to the capital they need to develop into global companies,” said Amanda Price, KPMG Australia’s head of high growth ventures.
“However, as the VC focus continues to shift towards larger raises for later stage start-ups, it raises questions as to where the funding for early stage ventures will come from.”
Ms Price added, “This is a real concern as we are not seeing an increase in angel investors or seed investment. If we want Australia to have a successful and growing start-up eco-system we need capital at every stage of the pipeline.”
Despite the growth, Australia remains just a small portion of the global investment raised through venture capital, which hit a new high of $69.8 billion in the June quarter.
Tech entrepreneur turned venture capitalist Jamie Pride previously told My Business that there are a number of ways business leaders can excite a venture capitalist into giving them investment, and similarly sure-fire ways to turn off would-be investors.
Mr Pride also suggested that the biggest mistake made by business leaders is to seek investment where funds are actually not needed, saying that “money and capital doesn’t solve many, if any, issues related to business”.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
Ask the Experts: Does automation stack up financially?
By Christopher Overton
Opinion: How bad do things have to get?!
By Adam Zuchetti
Business lessons from the All Blacks
By Steve Stanley