The Victorian government has a mission of positioning the state as a “world-leading innovation hub” with significant funding in the recent budget and a new $1.5 million investment in an AI program, Innovation Minister Jaala Pulford said.
Through its innovation agency LaunchVic, the Victorian government has provided $1.5 million to the newly established artificial intelligence accelerator program Boab AI, which is also working to close a $100 million AI investment fund.
Victoria has put significant emphasis on tech and startups for its economic recovery from COVID-19, with the state budget late last year providing $626 million to digital infrastructure and $130 million for local startups. This included a new $60.5 million Victorian Startup Capital Fund and a $2 billion Breakthrough Victoria Fund.
“Backing young, innovative firms and startups is how we prepare Victoria’s future economy and grow jobs for Victorians,” Victorian Minister for Innovation, Medical Research and the Digital Economy Jaala Pulford told InnovationAus.
“With investments in collaborations like Boab AI, we are positioning Victoria to be a world-leading innovation hub that attracts and develops the best talent, investment and artificial intelligence expertise.”
The Boab AI program, backed by investment firm Artesian, will put 32 artificial intelligence-focused companies through its program over four years, with each receiving a minimum of $300,000 in funding and up to $5 million in follow-on funding.
The program targets established scale-ups with a product and demonstrable traction, with assistance, investment advisory, partnerships and mentorship on offer.
The program’s managing director Andrew Lai said it will fill a significant gap in the Australian market.
“It’s quite a different offering from inception-level accelerators. They’re more about finding the product-market fit and learning about lean startups – cookie-cutter template stuff,” Mr Lai told InnovationAus. “This time around for us it’s what we call portfolio support. We examine teams as they come in and examine their strengths and weaknesses.”
“In terms of early-stage support there are about 25 accelerator programs in Victoria alone, and at the later stage there are around 100 VC funds.
“But there’s that gap in the middle of growth capital. That’s our growth thesis. There are a lot of companies seeking growth capital but finding it difficult to raise that pre-Series A round.”
The organisation is also raising a $100 million investment fund focused on AI, which will provide follow-on funding to accelerator participants along with other separate investments in about 150 companies overall.
“The intent is to go out internationally to seek talent, for companies looking to do business in Australia or that have an Australian connection. It’s exciting because it’s a way for us to deploy and support AI companies that are not just in Australia but out in the wider region where AI investment is also lacking,” Mr Lai said.
The state government funding and support is “vitally important” for the Boab program, and for Victoria to achieve its potential in the AI space, Mr Lai said.
“From our perspective it’s possibly the revolutionary technology of our lifetime and investment in AI is statistically quite low – it’s a big opportunity,” he said.
“It’s very helpful to have a government not only contribute, but its networks too, it’s very much pivotal. From our perspective Victoria is the most progressed state in terms of initiative. All around the country the latent potential of AI is yet to be reached.
“But there’s a lot more work to be done. Additional support and development within the translation and commercialisation of research, particularly from academic institutions. Australia is still statistically lagging behind in the OECD on that front.”
Boab AI has recently announced its first cohort of five startups: Pi.Exchange, Plaetos and Strongroom AI from Victoria, and Daitum and Remi AI from around the country. It is also readying to open up applications for its second round of companies.
This post was originally published on InnovationAus.