(13 October 2023 – Australia) The Australian Business Growth Fund (ABGF) is planning to invest greater equity capital into a wide range of SME industry verticals critical to Australia’s economic future including technology, cybersecurity, clean energy, advanced manufacturing and defence.
Growth SMEs that require more funding to expand their operations are encouraged to partner with the A$540 million venture capital style fund underwritten by the Big Four majors and federal government.
The ABGF invests between A$5 million to A$15 million into small businesses with turnover between A$2 million to A$100 million for a minority stake of up to 49 percent. The fund does not extend credit like banks but instead assumes the position of of a minority equity partner via “patient capital” over the long term for fast-growing SMEs for up to a decade.
ABGF has closed nine deals including backing its first female-led business this month, Inskin Cosmedics.
“We want to be investing in innovators and disruptors. We want to be in sectors and businesses that are adding value to the future of Australia” commented ABGF CEO & Managing Director, Anthony Healy.
“There is very little equity capital in the SME space, apart from limited investment appetite from family offices, small private equity funds and some high net worth people.”
“Business often estimates its growth potential from how much money banks will lend them. Banks can only lend so much. One of our aims is to prove that commercial returns can be generated in the SME sector, which hopefully leads to more capital coming from other investors.”