What is the CSIRO Innovation Fund?

The CSIRO Innovation Fund is a $200 million fund to commercialise early stage innovations from CSIRO, universities and other publicly-funded research bodies.

 

Background

CSIRO Financial Services Pty Ltd trading as Main Sequence Ventures is manager of the CSIRO Innovation Fund (CSIRO Innovation Fund 1, LP and CSIRO Innovation Follow-on Fund 1 “the Fund“), which is intended to help improve the translation of Australian publicly-funded research into commercial outcomes and stimulate innovation in Australia.

The CSIRO Innovation Fund will support co-investment in new spin-out and start-up companies, and SMEs engaged in the translation of research generated in the publicly-funded research sector.

 

Objective

The CSIRO Innovation Fund was launched in December 2016. It will invest in start-up and spin-off companies, existing SMEs engaged in translation of research, and company formation opportunities. This investment is designed to:

  1. Improve the translation of publicly funded research into commercial outcomes and stimulate innovation in Australia.
  2. Help successful businesses to grow – amplifying Australia’s productivity and exports, and generating jobs, particularly in priority sectors of the Australian economy.
  3. Boost the Australian innovation ecosystem as those individuals and companies supported by the Fund go on to further stimulate productivity and a culture of innovation and entrepreneurship.

 

Funding

The Fund invests in start-up and spin off companies, and SMEs engaged in the translation of research generated in the Australian publicly funded research sector.

 

Administration

The CSIRO Innovation Fund will be managed as an early stage technology venture fund and as a separate legal entity to CSIRO. The Fund will, however, be managed by a subsidiary company of CSIRO which is ultimately accountable to the CSIRO Board and will also be subject to the regulatory processes that oversight venture funds, for example Innovation and Science Australia . The Fund will have its own governance and decision-making structure, including an investment committee that will include independent members.

Bill Bartee has been appointed leader of the CSIRO Innovation Fund Investment Managers team. A recruitment process for investment managers for the Innovation Fund is also underway, to form the Investment Managers team.

 

Eligible Applicants

The Fund invests in start-up and spin off companies, and SMEs engaged in the translation of research generated in the Australian publicly funded research sector.

The CSIRO Innovation Fund is open to investment proposals from CSIRO, Australian universities, Australian publicly funded research agencies, and SMEs who partner with one of these eligible organisations.

 

How to get the CSIRO Innovation Fund

Applications for the CSIRO Innovation Fund will need to demonstrate:

  1. the requirement for funding to address the initial ‘Death Valley Curve’ in pre-seed and seed funding.
  2. how investment will bring forward the commercialisation of ‘deep technology’
  3. how it aligns to national industry priorities as currently articulated through the Industry Growth Centres.
  4. a commercial return
  5. a National benefit
  6. a focus of investment in Australia during their formative years.

 

How to get Main Sequence Funding?

Need for Funding

  • The CSIRO Innovation Fund applicant has insufficient financing to fund the entire project.
  • It would be unreasonable to expect that the applicant should obtain financing from alternative sources.

Market Opportunity

  • The need for the new product, process or service is clearly defined.
  • The type of customer is clearly defined.
  • The size of the target market.
  • The strength of the IP and how it will address the market opportunity.

Value Proposition

  • A clear, concise and compelling value proposition, i.e. why the customer wants the product, process or service.

Execution Plan

A sound execution plan to capture the opportunity and manage the risks, for example

  • a clear set of objectives
  • a clearly defined path to market
  • an understanding of the key structural or market challenges to be resolved
  • a sound IP strategy

Management Capability

The CSIRO Innovation Fund applicant demonstrates an appropriate level of expertise in:

  • commercialisation management
  • project management
  • business management
  • the relevant sector/technology domain

National Benefits

The project will improve Australia’s participation and competitiveness in the global economy.

Significant spill-over benefits will accrue to Australia through the conduct of the project and/or commercialisation of its results, including:

  • diffusion of knowledge and skills;
  • diffusion of new products, processes or services; and/or
  • increased collaboration between businesses and/or businesses and research institutions.

 

Business Plan

CSIRO Innovation Fund applicants should consider preparing a business plan against the merit criteria and should include clearly defined sections and headings including the following:

  1. Executive Summary – summary of who you are and the business opportunity, ie, what is your value proposition, what problem do you solve, for whom, and why your solution is better than alternatives.
  2. Team Overview – role and responsibilities of each member and how their expertise and experience is relevant to advancing the venture.
  3. Marketing Strategy – what is the market opportunity for your venture, who are your customers, do you have evidence from a lead customer/end user (e.g. a letter or email communication), how will you bring your product or service into the market (e.g., distribution channels, potential or existing partners).
  4. Competitive Advantage – who are your competitors and why your concept is sustainable.
  5. Key Resources and Development Plan – what resources do you require, what is the production process and plan to transform into end products.
  6. Financial Plan – this section should include detailed information about your startup costs and how you will meet them, as well as how you will make money. Types of financial tables to consider including: sales forecast, expenses budget, projected cash flow statement, profit and loss statement (P&L), projected balance sheet, and break-even analysis.
  7. Risk Management – outline the key challenges in the development and commercialization of this product, service, or process, what could go wrong and mitigating strategies.
  8. Action Plan –e., goals and key steps to undertake to achieve your business objectives.

 

Timing

As of 30 October 2017, the fund is now open.

 

Media Release

The CSIRO Innovation Fund, managed by Main Sequence Ventures, has attracted $232 million in investment in its first year. The Fund has made nine investments in companies, supporting hi-tech industries, creating more than 100 new jobs.

Capital raising for the Fund has realised $232 million – exceeding its target for private sector investment by $32 million. The Fund has attracted investors including Hostplus and the University of Melbourne.

$132 million has been raised through private investment, $70 million from Government and $30 million from CSIRO.

CSIRO Chief Executive Larry Marshall, said: “Australia has outstanding science but translating that science into real products, real jobs or growing entire new industries remains a challenge.

CSIRO can be the bridge to help more great Australian inventions flourish and our Innovation Fund is delivering returns to invest in even more critical research for future breakthroughs.”

Main Sequence Ventures Partner Mike Zimmerman, said: “We are proud and excited to partner with investors that share our belief that significant global companies can come from the important work happening in Australia’s publicly funded research organisations.”

The Fund’s current portfolio includes satellite communication company Myriota, telehealth start up Coviu and Baraja who are developing technology for driverless cars.

Sam Sicilia, CIO of Hostplus said: “We believe Australia’s new competitive advantage is our ability to translate technology and innovation, as well as scientific discovery, into commercial products and services to export globally.

Our investment with Main Sequence Ventures allows us to see what is coming, not just from emerging startups but also reaching right back into the labs.

“With the world rapidly changing around us, and the competitive landscape shifting very swiftly, we look to invest in the industries of tomorrow and the way Main Sequence Ventures builds its portfolio gives us new insight,” he added.

The Fund was established as part of the National Innovation and Science Agenda to commercialise early stage innovations from CSIRO, universities and other publicly-funded research bodies.

 

Latest Recipients

Q-Ctrl – A quantum computing startup being established under the leadership of Professor Michael Biercuk from the University of Sydney. Q-Ctrl will address the important issue of error control in quantum computing.  This is not about making qubits, but stabilising them.

Morse Micro –Imagine Wi-Fi devices that can run many years on a single coin cell battery. Or forever from harvested energy. With low peak power requirements and energy usage 100-200 times lower than conventional wireless links, the tantalizing dream of small, long lasting IoT devices will finally become a reality.  www.morsemicro.com

Maxwell MRI – Maxwell MRI is rethinking the way we detect and diagnose disease. By combining cutting edge deep learning with modern medical imaging Maxwell MRI is making cancer diagnosis faster, more affordable and more accurate – starting with prostate cancer. www.maxwellmri.com

Intersective – Intersective is an experiential education technology start-up co-founded in 2012 by veteran tech entrepreneurs Wes Sonnenreich, Beau Leese and Suzy Watson. Its Practera platform powers a range of experiential learning programs like internships, cross-functional projects, accelerators, mentoring and skills micro-credentialing, delivering better outcomes for educators, employers and learners. www.intersective.com

 

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