Key Takeaways
- • Kate Gaffney, cofounder and director of partnerships, engagement and research at AxleTree Capital, argues that the Victorian Opposition's proposal to wind up Innovation Victoria's investment function and sell its early-stage portfolio to fund a $1.27 billion healthcare plan is a false economy.
- • The article cites Innovation Victoria's roughly $2 billion Breakthrough Victoria-derived fund, which backs roughly 100 active investments across health, climate resilience, advanced manufacturing, agriculture, water and sovereign capability.
- • Per the article, Victorian startups raised $2.2bn across 134 deals in 2025, overtaking NSW for the first time, according to the Victoria Venture Capital Report 2025.
- • Of roughly 100 active investments, only one, epilepsy medtech Seer Medical, has entered voluntary administration, and a collaborative $40 million rescue backed by private capital preserved local jobs and IP.
- • The author contends that selling an early-stage portfolio before its companies mature would weaken the investor signal that draws private capital to Victoria and reduce the state's capacity to build future industries.
Summary
With the Victorian election weeks away, the Opposition has proposed winding up Innovation Victoria's investment function and selling its early-stage portfolio to help finance a $1.27 billion healthcare plan, according to an opinion piece published by Startup Daily. The article, written by Kate Gaffney of AxleTree Capital, argues that the proposal treats health funding and innovation investment as competing priorities when Victoria's future healthcare capacity depends partly on the companies, technologies and jobs that patient capital helps create.
The author acknowledges the political appeal of the proposal, noting that long elective surgery waiting lists affect real families. However, the piece argues that the plan conflates the urgent need to fix the healthcare system today with the long-term investment architecture needed to grow the economy that funds it. Innovation Victoria was created through the consolidation of Breakthrough Victoria and LaunchVic, and its investment function carries forward the mandate of Breakthrough Victoria, which launched in 2020 with an initial $2 billion fund.
The article cites the Victoria Venture Capital Report 2025 as stating that the state is home to 4,400 startups, 4.4 times as many as in 2017, and attributes 63,900 jobs since 2004 to the sector. It also notes that Victorian startups raised $2.2bn across 134 deals in 2025. The author highlights portfolio companies including Planet Protector Group, which makes thermal packaging from waste wool and insulation from waste denim, Navi Medical Technologies, which develops devices for premature babies in intensive care, and SmileyScope, which builds VR tools to reduce children's pain and anxiety. The article notes that the Opposition has pointed to portfolio companies entering administration as evidence of volatility, but states that of roughly 100 active investments only Seer Medical entered voluntary administration, and a $40 million rescue package backed by private capital preserved local jobs and intellectual property.
The author concludes that selling an early-stage portfolio before its investments mature would expose founders and workers, weaken the signal that attracts private capital, and reduce the state's capacity to build future industries. The piece characterizes healthcare reform and innovation investment as matters to be judged on their own merits rather than framed as a false choice. The article is an opinion piece and its claims reflect the author's perspective.
The author acknowledges the political appeal of the proposal, noting that long elective surgery waiting lists affect real families. However, the piece argues that the plan conflates the urgent need to fix the healthcare system today with the long-term investment architecture needed to grow the economy that funds it. Innovation Victoria was created through the consolidation of Breakthrough Victoria and LaunchVic, and its investment function carries forward the mandate of Breakthrough Victoria, which launched in 2020 with an initial $2 billion fund.
The article cites the Victoria Venture Capital Report 2025 as stating that the state is home to 4,400 startups, 4.4 times as many as in 2017, and attributes 63,900 jobs since 2004 to the sector. It also notes that Victorian startups raised $2.2bn across 134 deals in 2025. The author highlights portfolio companies including Planet Protector Group, which makes thermal packaging from waste wool and insulation from waste denim, Navi Medical Technologies, which develops devices for premature babies in intensive care, and SmileyScope, which builds VR tools to reduce children's pain and anxiety. The article notes that the Opposition has pointed to portfolio companies entering administration as evidence of volatility, but states that of roughly 100 active investments only Seer Medical entered voluntary administration, and a $40 million rescue package backed by private capital preserved local jobs and intellectual property.
The author concludes that selling an early-stage portfolio before its investments mature would expose founders and workers, weaken the signal that attracts private capital, and reduce the state's capacity to build future industries. The piece characterizes healthcare reform and innovation investment as matters to be judged on their own merits rather than framed as a false choice. The article is an opinion piece and its claims reflect the author's perspective.
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