RedFire launches A$70m debut venture fund

Australia’s RedFire Investments will back domestic startups with the opportunity to commercialise their businesses by tapping into Asia's growth.

RedFire Investments has launched an A$70 million (€40 million; $58 million) venture capital fund and has raised A$10 million to date. Eighty percent of the fund's capital will be invested in Australia, while the rest will be committed to companies in the rest of Asia, primarily in Southeast Asia.

It will invest in the environmental and technology sectors. However, in the environmental sector, the fund will invest only in companies that have a distinct “technology play”, Alistair McCreadie, a partner at the firm, told PEO. For instance, the firm is close to finalising its first deal in a company that has developed a technology to save energy in the use of lighting.

RedFire was established in October 2007 to provide business development support to early-stage businesses. This fund has been launched with the objective of providing Australian startups with an opportunity to commercialise their businesses by taking them outside of Australia. This will be done by expanding operations in Asia and by introducing Asian investors and partners to investee companies. “We want to address the issues of commercialisation,” McCreadie said.

He noted that while most venture capital firms take their companies to the US to grow, RedFire will look to take them to Asia. “Growth will continue to be driven by the Asian region. The technology coming out of Australia is highly sought after in the Asian market, and therefore it makes sense to take our investee companies there to tap into that market,” he added.

The firm’s debut fund will see a first close in February 2009 and is expected to see a final close by February 2010, he said. Investors being targeted for the fund include Asian and Australian high net worth individuals, and Australian superannuation funds and family offices.

The fund is looking to make about 10 to 15 investments from this fund and McCreadie said it will not invest more than 20 percent of the capital in any single deal.

Lim Ho Kee is the chairman of RedFire and one of the firm’s major shareholders. He is presently the chairman of Singapore Post, the country's main postal service company, and a director of Keppel Land, the property arm of Singaporean conglomerate Keppel Corporation. Lim was earlier a director of SingTel, one of the largest telecommunication service providers in the Asia Pacific, and a subsidiary of Temasek Holdings, one of the two investment arms of the Singapore government.