VC funds ready to roll

If all the venture capital funds targeting the biotech sector get up and running, next year the Australian biotech industry will have access to more early-stage funding than ever before.

Starfish Ventures recently closed its AUD$123 million Starfish Technology Fund I, which targets biotechnology among other high tech sectors, and hot on its heels are the $200 million Burrill Australia Life Science Fund and New Zealand-based Life Science Ventures fund, worth AUD$100 million, both expected to close on December 15.

"We hope to have it all wrapped up by 15 December -- we're just going flat chat getting things done," said Burrill's Australia Life Science Fund's managing director Peter Carre.

The Life Science Ventures fund has received substantial support from the New Zealand Government, which is kicking in $1 for every $2 of private sector support, as well as the Queensland government, which has pledged $6 million. Unlike other funds, which tend to target the biomedical side of the biotechnology industry, this fund is aimed at supporting the agricultural and food biotechnology industry.

Another fund, expected to be worth $150 million, is the IB Australia Bioscience Fund I, which is being raised by Intersuisse and UK venture group Bioscience Managers, with UK venture capitalist Jeremy Curnock Cook at the helm.

According to Intersuisse director Jonathan Buckley, Intersuisse is looking to close the fund early to mid-2005.

"We're talking to cornerstone investors in Australia and overseas -- we've had a very pleasing response from superannuation funds and other investors and now we're in the due diligence process," Buckley said.

Bioscience Managers recently closed a similar fund in Canada -- the BML International Maple Leaf Fund I -- with the Ontario Teacher's Pension Plan as a cornerstone investor and is also setting up a similar European fund.

Unlike many VC funds, which concentrate on early stage companies, the IB fund will focus on mid-stage companies, said Buckley, with products already in clinical trials or ramping up commercialisation strategies.

"The listed status of companies will be irrelevant to our fund -- we're not restricting ourselves to investment in either private or listed companies," he said.

Little news has emerged in recent months about the Scientiaus Fund, headed by former Uniseed CEO David Evans, which has been trying to raise $250 million for investment in early-stage companies.

Of course, it's not just a matter of getting the money. The new VC funds will also have to show they can put their money where their mouths are, and get cracking with investments.

"We're hoping to make our first investment early in the New Year -- in the first quarter anyway," Burrill's Carre said.