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Breakthrough Victoria post $3 million loss
- The controversial Victoria-based venture capital fund, Breakthrough Victoria, has reported a $3m loss in its third year of operation.
- Breakthrough Victoria has faced sustained criticism concerning its modest investments and high operating costs. In its 2023 annual report total costs amounted to $22m with only $73.7m invested that year. The fund made a $58.7m profit.
- There was also criticism from supporters of the Australian start-up industry such as Adir Schifmann, the chair of ASX-Listed Catapult Group, and Matt Rockman, co-founder of Seek. Shifman demanded the fund be shut down.
- The 2024 report reveals a $360m reduction in funding in the Victorian budget this year and a reduced focus on direct investment. Despite this, investment related expenses as a percentage of assets under management reportedly nearly halved to 3.1% compared to 6% in 2023.
- Breakthrough Victoria reported investing $191.5m in 21 opportunities out of more than 500 in the financial year 2024.
- The organisation spent $52m of public money on getting two US firms, World View and Liquid Instruments, to set up offices in Melbourne.
- World View designs and manufactures stratospheric balloons for sensing, weather monitoring and communication, which can stay airborne for up to 45 days. It is also working on space tourism. The creation of World View during the recent investment round, held in 2024, was widely criticised as unrealistic.
- Breakthrough Victoria also made deep tech investments, such as lactose-free milkmaker Eden Brew and medtech start-up Navi.
- Breakthrough Victoria said its net assets rose by $172m to $536.1m by the end of June this year. Among the investments yet to be completed are those in Millibeam, a Sydney 5G chipset start-up.
- Treasurer Tim Pallas, who is Breakthrough Victoria's sole shareholder, has been criticised for not releasing details of the fund's finances.
- Labor Opposition Industry and Innovation Spokesperson Bridget Vallence says Breakthrough Victoria is in financial disarray. The CEO and five board members have quit.
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