With the recent release of $100 million of taxpayer money under the Innovation Investment Fund (IIF), there is good news and bad news.
On December 9, just three days before Kim Carr was demoted from industry minister to manufacturing, he announced the release of the final round of money available through the IIF. Under the IIF program, venture capital managers that can raise $20 million from private investors, such as superannuation funds, may apply for a matching $20 million from the IIF, provided they meet the other criteria of the program. In the broadest terms, that means they need to fund new companies. Good news!
The bad news? Unless the federal government changes its mind, this is the last round of funding under the IIF program, which to date has helped 99 businesses commercialise original research, creating jobs, profits and useful products.
Does that matter? Yes, it does. Consider Vaxxas, a company that received funding from an IIF fund manager, OneVentures, last year. Vaxxas is developing a way to deliver vaccinations via a patch rather than needle and syringe. For most of us, a patch is a helluva lot nicer than a jab but for millions of people in developing countries, Vaxxas may be life-saving. In Africa, transporting vaccines at stable cold temperatures is very difficult and doses are wasted. Training health staff to apply a patch is much easier than training them to give a needle safely, effectively and with the least possible pain.
Last year, the world spent $US21 billion on vaccinations. If the Vaxxas patch works – animal studies are positive but human trials are some time away – that is a big market and it is growing at 10-15 per cent a year. But more importantly, the world will have a great tool to help tackle deaths from preventable causes, such as the 164,000 deaths from measles in 2008. The $15 million that OneVentures raised for Vaxxas comes from its own fund and from another three venture capital companies. It is the biggest first-round investment in a private start-up ever made in Australia. Would Vaxxas succeed without the IIF? Possibly.
Its founder, Mark Kendall, is a smart man. But OneVentures and the others bring global commercial expertise and contacts, as well as perspective, encouragement and energy to the project. Its chances are much improved. The IIF is much more than a program to help venture capital funds get new companies started and it, too, deserves a long life.