Australia is "quite blessed" when it comes to the appetite for early stage venture capital, says Investec.
Investec’s emerging companies portfolio was launched in early 2017 and announced its 13th investment, Sydney-based glasses start-up Dresden Optics, in early June 2018.
Investec helped Dresden Optics raise $4 million to further its global expansion, which has already seen the Australian company open an office in Canada.
Speaking in Sydney last week, Investec’s Hein Vogel said the emerging companies portfolio has been set up to help entrepreneurs grow from $10 million to $200 million.
The investment bank has similar operations in Hong Kong, London, India and South Africa (where it is headquartered).
"My feeling is that a lot of high-net-worth [investors] are punting on entrepreneurs. They're punting on ideas, and they're investing and backing these young guys to build some great businesses," Mr Vogel said.
Investec invested in H2 Capital's start-up accelerator in March 2016, and increased its funding facility with the backing of the government in early 2017.
"There is a huge amount of money flowing into the space, lots of R&D grants. It's a great ecosystem. We're seen that for the last three years, and we think we're at the start of a wave of these growth companies coming through," Mr Vogel said.
The emerging companies fund has not exited from any of the 13 companies as yet, but Mr Vogel said Investec is "very close" to its first successful exit.
"We have to prove to [Investec management] that we can do that. Performance of the portfolio has been quite strong," he said.
Mr Vogel said he would be open to an IPO or a trade sale, adding that Investec is "quite happy for an entrepreneur to buy us out".
Australia’s ETF industry continues to thrive despite the sharemarket decline with $3.9 billion in value traded according to a review by Be...
There are growing calls for a financial sector-wide code that “consolidates” conduct regulation and self-regulation in the industry. ...
A new emerging companies fund is a natural progression for equities investment manager DNR Capital, which has typically stuck to larger comp...