OneVentures launches Australian VC fund

The firm is targeting A$100m for its second vehicle targeting venture capital opportunities in the region.

OneVentures, an Australia-focused venture capital fund, has launched its second vehicle targeting A$100 million ($93 million; €67 million), according to a statement.

The fund will target emerging Australian companies in sectors including healthcare, education, mobile, media, cloud computing and data, security and privacy, with the potential to grow overseas.

The second offering is over double the size of its A$40 million predecessor, which was formed as an early-stage venture capital limited partnership in 2010.

The fund is trading at a premium after four years and, of its eight portfolio companies, two are now operating out of Silicon Valley and one out of Boston, the statement said.

OneVentures was one of the first funds in Australia to tap high net-worth individuals and family offices for venture capital funding in the absence of institutional investors post-global financial crisis, according to the firm.

Since, OneVentures has also closed three co-investment funds worth a combined $30 million.

The first vehicle was also a beneficiary of A$20 million from the Australian government’s Innovation Investment Fund, a government-backed vehicle that matches LP commitments to venture capital funds to boost investment in the sector.

The Australian government has previously pledged A$350 million to the Innovation Investment Fund, a move driven by lobbying by the Australian Private Equity and Venture Capital Association.

However, venture capitalists in Australia could receive less backing from the government this year as budgetary pressure forces it to pull back on funding, Yasser El-Ansary, AVCAL chief executive, told PEI earlier.

This week, AVCAL also made a submission to the Financial System Inquiry in Australia saying that private equity and venture capital has the capacity to invest in 30,000 small- and medium-sized enterprises in the country, but is constrained by funding limitations.

“Private equity funds are currently invested in fewer than 350 businesses in Australia – which means they presently have funding capacity to back less than two percent of the total investable pool of up to 30,000 businesses,” El-Ansary said in a statement.

AVCAL has therefore called on the government to examine the ability of superannuation funds to invest in private equity and venture capital, including raising the threshold for allocations to longer-term and illiquid asset classes and offering tax breaks and incentives for long-term investors, including a decrease in capital gains tax.

“Our superannuation savings pool is a vitally important part of the foundation of our financial system now, but there is a very clear opportunity to remove roadblocks that deter some superannuation funds from backing private equity and venture capital firms to invest in Australian businesses,” El-Ansary added.