VC Success Stories
The Venture Capital industry in Australia has come a long way over the last decade. The industry has funded and developed several successful products and services some of which have gained global recognition. These products and services, as listed below, are mainly from the IT, Telecommunication, Biotech and Life Science sector.
| Company name | SEEK Ltd |
| VC backing firm | CHAMP Ventures (AMWIN Innovation Fund). Co-investors include: Macquarie Technology Fund 1A and 1B; and Australasian Media and Communications Fund |
| Total VC funding (to date) | A$2.5m |
| Effective Shareholding (%) | 5.70% |
| Date of first investment | Oct-99 |
| Date of Exit | Aug-05 |
| Investment IRR (%) | 47% |
| Times Money (.x) | 6.5 |
| Government assistance | N/A |
| Latest available revenue figure | A$66.8m FY05F (A$209.8m last ASX Reported Revenue - FY09) |
| Exit Route | IPO |
| Current employees | 200 full-time (as at Aug 05) |
| Business sector | Internet Technologies |
| Company website | www.seek.com.au |
| VC firm website | www.champventures.com |
| Description | Recruitment search engine and database |
| Company name | Enterix |
| VC backing firm | Innovation Capital |
| Total VC funding (to date) | $A21.38 |
| Effective Shareholding (%) | |
| Date of first investment | Jul-01 |
| Date of Exit | 6/06/2006 |
| Investment IRR (%) | 7.02% |
| Times Money (.x) | 1.4 |
| Government assistance | Comm ready |
| Latest available revenue figure | $85m |
| Exit Route | Trade Sale |
| Current employees | 65 |
| Business sector | Life Science |
| Company website | http://www.questdiagnostics.com |
| VC firm website | www.innovationcapital.net |
| Description | Provides colorectal cancer screening services |
| Company name | eServGlobal |
| VC backing firm | Allen & Buckeridge plus private co-investors |
| Total VC funding (to date) | A$5.39m |
| Effective Shareholding (%) | |
| Date of first investment | Dec-98 |
| Date of Exit | Jul-05 |
| Investment IRR (%) | 36% |
| Times Money (.x) | 4x |
| Government assistance | |
| Latest available revenue figure | $23 m revenue in FY01 grew to A$38 m in FY05, in tough market conditions |
| Exit Route | On market sales through AIM, after secondary listing in 2004 |
| Current employees | |
| Business sector | Enhanced services software developer for mobile telecommunication carriers |
| Company website | http://www.eservglobal.com |
| VC firm website | http://www.a-b.com.au/ |
| Description | Combined a software service company with two product companies, floated merged entity on ASX at September 2000. High growth transition of network management architecture, particularly for mobile carriers. Led equity syndicate for merger pre-IPO, provided executive leadership for 2 years post telecoms crash, assisted in securing external directors and London AIM listing, to secure liquidity . |
| Company name | Catapult Genetics |
| VC backing firm | Four Hats Capital Pty, Ltd. |
| Total VC funding (to date) | A$2.34m |
| Effective Shareholding (%) | |
| Date of first investment | Mar-05 |
| Date of Exit | Mar-08 |
| Investment IRR (%) | 35% |
| Times Money (.x) | 2.6 |
| Government assistance | IIF – A$50m – 2001 (investment in fund). Commercial Ready Grant |
| Latest available revenue figure | |
| Exit Route | Sale to Trade Buyer |
| Current employees | 30 |
| Business sector | Life Science |
| Company website | www.geneticsolutions.com.au |
| VC firm website | www.fourhats.com.au |
| Description | Catapult Genetics had its origins when Gerard Davis and Jay Hetzel established Genetic Solutions in 1998. After the merger with Catapult Systems, it grew to become the global leader in livestock DNA testing. Its innovative gene marker tests assist global food producers, processors and retailers in improving profitability and quality in the food chain. The Four Hats managed Nanyang Innovation Fund invested $2.34m in Genetic Solutions and added significant value during the investment period including during the merger with Catapult Systems and the ultimate sale to Pfizer in 2008. Pfizer operate the world’s largest animal health business and saw the technology and expertise of Catapult Genetics as providing the next platform for growth. During the 3 year investment period Catapult Genetics revenues grew over five times and the acquisition crystallized a significant return for shareholders. The shareholders in Catapult Genetics also included AgResearch, CSIRO, Meat & Wool NZ, Gerard Davis and Jay Hetzel. |
| Company name | Pharmaxis |
| VC backing firm | GBS Venture Partners Ltd in A round, GBS Venture Parners and CM Capital in B round |
| Total VC funding (to date) | A$ 15.12m |
| Effective Shareholding (%) | 50% at Series A, 14% prior to exit |
| Date of first investment | Oct-99 |
| Date of Exit | Oct-07 |
| Investment IRR (%) | 61% |
| Times Money (.x) | 17.4 |
| Government assistance | IIF – A$42.5m – GBS – 1998 (investment in fund)IIF – A$41.25m – CM Capital – 2001 (investment in fund) , R&D Start |
| market capitalisation 2010 | A$556m |
| Exit Route | shares sold on market |
| Current employees | 80 |
| Business sector | Life Science - Pharmaceuticals |
| Company website | www.pharmaxis.com.au |
| VC firm website | www.gbsventures.com.au www.cmcapital.com |
| Description | Pharmaxis develops drugs to treat and manage respiratory diseases such as asthma, cystic fibrosis and bronchiectasis. The lead technology was developed by Dr Sandra Anderson at the Royal Prince Alfred Hospital in Sydney. Founding investor GBS Venture Partners provided support in identifying the lead technology, building the board and management team, and developing the strategy. Pharmaxis listed on the ASX, and later on NASDAQ. GBS sold its shares yielding a 17x return in October 2007. |
| Company name | Maxamine |
| VC backing firm | CHAMP Ventures (AMWIN Innovation Fund).. Some other co-investors include: Playford Capital, Deaus Pty Ltd, Shellsoft Pty Ltd, Dynamic Overseas Venture & Bousted Information Technology. |
| Total VC funding (to date) | A$3.0m |
| Effective Shareholding (%) | 25.90% |
| Date of first investment | Sep-99 |
| Date of Exit | Feb-08 |
| Investment IRR (%) | 15% |
| Times Money (.x) | 1.6 |
| Government assistance | N/A |
| Latest available revenue figure | A$2.6m (at at 30 June 2006) |
| Exit Route | Trade Sale |
| Current employees | 16 (as at 30 June 2006) |
| Business sector | Internet Technology |
| Company website | www.maxamine.com |
| VC firm website | www.champventures.com |
| Description | Develops products for the visualization and quality assurance of large government and corporate web sites. |
| Company name | BTF Pty Ltd |
| VC backing firm | Four Hats Capital Pty, Ltd. |
| Total VC funding (to date) | A$2.94 |
| Effective Shareholding (%) | |
| Date of first investment | Aug-02 |
| Date of Exit | |
| Investment IRR (%) | 27% |
| Times Money (.x) | 2.8x |
| Government assistance | Commercial Ready - $A1.93m (direct investment into the company) |
| IIF – A$50m – 2001 (investment in fund) | |
| Latest available revenue figure | |
| Exit Route | Sale to Trade Buyer |
| Current employees | 25 |
| Business sector | Life Science |
| Company website | www.btfbio.com |
| VC firm website | www.fourhats.com.au |
| Description | BTF was formed in 1999 by two scientists Graham Vesey and Mark Gauci from Macquarie University. They saw an opportunity for their technology with the Sydney Water crises in 1998. The water crises enabled them to create a company that produced reference standards for micro biology and therefore increased the precision of micro biological testing and quality control. They initially developed a product to improve the testing of water for the protozoa Cryptosporidium and Giardia (C&G) and in 2001 saw the need to raise capital to be able to expand into lucrative food and pharmaceutical markets and develop products for bacterial testing. With the assistance of Four Hats Capital (manager of Nanyang Innovation Fund), and several other investors they were able to grow their product range and expand their market until 2007 when their successful products and business strategy attracted an offer of a buy out from a French biotechnology company, BioMerieux (BMX). The takeover deal was signed at the end of August and completed on the 14 September 2007 closing the circle from inception to exit and becoming one of Australia's successful commercial outcomes from biotechnology research and early stage venture capital. |
| Company name | Peplin |
| VC backing firm | GBS Venture Partners Ltd |
| Total VC funding (to date) | AU$11.86m (GBS Ventures only), co-investors MPM, NEA |
| Effective Shareholding (%) | 9.13% |
| Date of first investment | 23-Oct-2008 |
| Date of Exit | 6-Nov-2009 |
| Investment IRR (%) | 127% |
| Times Money (.x) | 2.35 |
| Government assistance | Company received R&D support |
| Market Cap | $350m at acquisition |
| Exit Route | Acquisition of all shares by Leo Pharma |
| Current employees | 25 |
| Business sector | Life science - pharmaceuticals |
| Company website | http://www.peplin.com/ |
| VC firm website | www.gbsventures.com.au |
| Description | Peplin is a specialty pharmaceutical company focused on developing and commercializing innovative medical dermatology products. The company was founded in 1998 in Brisbane, Australia, listed on the ASX in 2000, and has operations in Australia and the USA. Peplin is developing PEP005 (ingenol mebutate) for the treatment of actinic keratosis and other skin conditions. |
| Company name | Hitwise Inc |
| VC backing firm | Allen & Buckeridge, later Insight Venture Partners (US) |
| Total VC funding (to date) | A$7m |
| Effective Shareholding (%) | 27% |
| Date of first investment | Jun-00 |
| Date of Exit | May-07 |
| Investment IRR (%) | 47% |
| Times Money (.x) | 12x |
| Government assistance | |
| Latest available revenue figure | Minimal revenue at first investment to US$50m run rate at time of trade sale |
| Exit Route | Trade sale to Experian plc, for US$260m cash |
| Current employees | |
| Business sector | Web analytics services for marketing agencies and enterprise customers |
| Company website | www.hitwise.com |
| VC firm website | http://www.a-b.com.au/ |
| Description | Superior business model to competitors, launched at start of enterprise adoption of on-line marketing and e-commerce. |
| Company name | PermissionCorp |
| VC backing firm | Four Hats |
| Total VC funding (to date) | A$1.5m |
| Effective Shareholding (%) | |
| Date of first investment | Apr-05 |
| Date of Exit | Apr-09 |
| Investment IRR (%) | 40% |
| Times Money (.x) | 2.6 |
| Government assistance | IIF - Four Hats - $50m – 2001 (investment in fund) |
| Latest available revenue figure | |
| Exit Route | Management Buyback |
| Current employees | 60 |
| Business sector | ICT |
| Company website | www.permissioncorp.com |
| VC firm website | www.fourhats.com.au |
| Description | PermissionCorp was founded in 2001 by Bob Cheng as EmailCash and grew to become one of the leading online permission marketing companies in Australian, New Zealand and Taiwan. With over 900,000 active members, it services include market research data collection, email direct marketing and eCommerce. Four Hats Capital assisted in putting the foundations in place, to transform the family business, into the successful PermissionCorp. Four Hats Capital assisted with establishing a Board of Directors and governance procedures, new corporate and management structure as well as implementing a new accounting system and practices. Over the 3 year holding period EBITDA organically increased over 6 times. Due to its strong financial position, PermissionCorp bought out Four Hats crystallizing a significant retrun on investment. |
| Company name | Gekko Systems |
| VC backing firm | CHAMP Ventures (AMWIN Innovation Fund). AMWIN is the only external investor in Gekko. |
| Total VC funding (to date) | A$1m |
| Effective Shareholding (%) | 25% |
| Date of first investment | Oct-98 |
| Date of Exit | Oct-03 |
| Investment IRR (%) | 27% |
| Times Money (.x) | 3.4 |
| Government assistance | N/A |
| Latest available revenue figure | $7.7m (as at 30 June 2003) |
| Exit Route | Trade Sale |
| Current employees | 45 (as at 30 June 2003) |
| Business sector | Business & Industrial Products |
| Company website | www.gekkos.com.au |
| VC firm website | www.champventures.com |
| Description | Supplies gravity separation and related equipment for the mining industry |
| Company name | Vintela Inc |
| VC backing firm | Allen & Buckeridge, later a family office associated with founder of Novell Inc. |
| Total VC funding (to date) | A$5m |
| Effective Shareholding (%) | 34% |
| Date of first investment | Aug-01 |
| Date of Exit | Jul-05 |
| Investment IRR (%) | 81% |
| Times Money (.x) | 5x |
| Government assistance | R&D originated from U Qld |
| Latest available revenue figure | From pre-revenue to US$10m annual run rate at time of trade sale |
| Exit Route | Trade sale to NASDAQ listed Quest Software Inc. for US$75m |
| Current employees | |
| Business sector | Single-sign-on services in heterogeneous operating system environments for large enterprises |
| Company website | |
| VC firm website | http://www.a-b.com.au/ |
| Description | Initially a seed investment in Public Key Encryption technology that was later applied to single-sign-on market. A&B’s seed investment in Wedgetail Communications was converted to equity in a fast-growing US company that needed its technology to complete its offering in identity management. In turn, another US company purchased the private US company because of its technology and fast-growing customer base. |
| Company name | Looksmart |
| VC backing firm | CHAMP Ventures (AMWIN Innovation Fund) |
| Total VC funding (to date) | A$2.2m |
| Effective Shareholding (%) | 5% |
| Date of first investment | Mar-98 |
| Date of Exit | Feb-00 |
| Investment IRR (%) | 1197% |
| Times Money (.x) | 109.7 |
| Government assistance | N/A |
| Latest available revenue figure | A$5.5m (as at 31/10/99) |
| Exit Route | IPO |
| Current employees | N/A |
| Business sector | Internet Technology |
| Company website | http://www.looksmart.com |
| VC firm website | www.champventures.com |
| Description | The Group's principal activities are to provide Internet search-targeted marketing solutions for online businesses globally |
| Company name | Authentic8 Inc |
| VC backing firm | Allen & Buckeridge, Deutsche Bank plus private co-investors |
| Total VC funding (to date) | $9m |
| Effective Shareholding (%) | |
| Date of first investment | Oct-98 |
| Date of Exit | Sep-01 |
| Investment IRR (%) | 25% |
| Times Money (.x) | 1.6x |
| Government assistance | |
| Latest available revenue figure | From pre-revenue start-up in FY99 grew to US$4m in FY01 |
| Exit Route | Trade sale to ActiveCard Inc., NASDAQ listed French company |
| Current employees | |
| Business sector | Software for security and authentication of internet access |
| Company website | |
| VC firm website | http://www.a-b.com.au/ |
| Description | Spin out of Melbourne based R&D group from Phillips N.V. |