Offshore VC Investments Prove Australia is a Contender

Australian VC is looking healthy in the wake of new AVCAL statistics which show that private investment ballooned in the last financial year. We detail the figures and explore what it might mean for the Australian startup scene in this brief blog.


The numbers

In the financial year 2012-13, venture capital investments totalled $131 million – a modest amount and a concerning droop from the heady highs of the previous year. 

The last financial year tells a different story. $516.39 million worth of venture capital was invested in Australian startups between 2013-14, which means that the country saw almost a $400 million increase in that short space of time. More impressively, the result is a record for venture capital invested in Australia – a record that previously stood at $280 million in 2011.

This is great news for Australia as a growth market. It shows that investors are finally recognising the high quality of our startups. Australia is defining itself as a standout by providing opportunities that long-established VC markets can’t. 
 

Domestic deficiencies

Inbound investment for venture capital and private equity from foreign firms has risen to $1.2 billion, which is a telling figure following the significant reduction of government funding and support earlier this year. The growing importance of offshore investors is a particularly key point of interest, as it may indicate a future trend of increased foreign investment in opposition to the domestic funding deficiency that has unfortunately reared its head of late.

While dwindling native funding remains a concern in the wake of offshore investment, there is still much to celebrate about the current state of the Australian startup scene. The government will find it hard to ignore the successes of startups – they provide a compelling motivation to support the security of domestic VC in the long term. For now though, it shows that Australian entrepreneurialism and innovation is well on the way to competing on the global stage.