Australian superannuation (pension) fund First State Super and venture capital firm H2 Ventures have set up a fund that will help fintech startups in the country.
First State Super manages AUD 54 billion ($39 billion) and has pledged a total AUD 250 million ($180 mln) for technology innovation initiatives over the next few years, according to Chief Investment Officer (CIO) Richard Brandweiner, as quoted by the Sydney Morning Herald.
Eight-figure investment pool
Although the size of the funds that will be allocated to fintech startups was not revealed, the sum will be in the eight-figure range, the daily said. The companies eligible for funding will be identified by H2 Ventures.
The official presentation for the fund was attended by Prime Minister Malcolm Turnbull. Speaking at the event, Brandweiner and Ben Heap, co-founder of H2 Ventures, said that the number of fintech startups in Australia is not sufficiently great at the moment, and so the fund allocated for investments in the segment is not as large as others. They added, however, that this could change and there could be talk of hundreds of millions of dollars being allocated for fintech investments.
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Government backs tech innovation
The initiative has the backing of the government, which seems ready to start paying a lot more attention to the tech sector. The Financial Standard reports that the government is offering a 20 per cent tax deduction for investments in innovative businesses plus a 10-year exemption on capital gains tax on the returns from these investments.
Tax incentives, incidentally, were among a number of issues identified by the nascent fintech Australian industry at an event last month. The business then called for much needed reforms that could bring Australia closer to fulfilling its potential as a regional fintech hub.