EiR picks up some other BITS money

Information technology incubator Entrepreneurs in Residence EiR has secured a share of the latest round of Federal Government funding under the Building on IT Strengths incubator program.

Only eight of the original ten incubators were successful in securing a share of the $36 million in funding over the next four years.

EiR chief executive officer Greg Riebe said he had not been told how much funding the incubator would receive.

However, WA Business News understands the government funds will be split equally between the eight incubators meaning EiR’s portion would be $4.5 million.

Each of the successful incubators prepared submissions based on past performance in order to be eligible for the funding.

Mr Riebe said the Technology Park-based incubator had performed well and, in some cases, secured $12 of private equity funding for every $1 of BITS funding invested.

“We had a number of graduations within the program and exceeded our initial estimations by 10 per cent,” he said.

“We also made a number of partial exits during the program which means we got a return back of capital invested.

“In terms of total revenue, investors grew their revenue by 256 per cent from the point of initial investment to June 30,” Mr Riebe said.

However, Mr Riebe said EiR experienced some difficulties with the capitalising of investments and would work to improve this with the next round of funding.

“What we are doing with the new funding is to get them better capitalised,” he said.

Mr Riebe said that while EiR was permitted to look at opportunities outside of WA, it would continue to keep its focus within the State.

“There are a lot of good projects out there that are seeking capital,” he said.

“My view in the state of things is that we have to get together and grow the garden patch.”

Mr Riebe said EiR had 15 companies at various stages of development including those seeking their next round of funding.

EiR was initially allocated $10 million through the BITS program and was established in 2000.

Originally called the Perth Ideas Centre of Technology, EiR offers services designed to accelerate the development of ICT start-ups by providing seed capital, management expertise, legal advice, office space and mentoring.

EiR provides funds of between $50,000 and $450,000 over a two-year period and has assisted companies such as Calytrix, Autumn Care Systems, Imagemation, Intierra and Luceo Systems.

The BITS program commenced in June 1999 when the Federal Government announced a $158 million commitment over five years to establish the program.

However, a mid-term review of the program by the Allen Consulting Group in November 2003 found that while the incubators had performed well by international standards, they would need further funding in order to become self-sustainable.

After deciding to extend funding to incubators, Department of Communications, Information Technology and the Arts (DCITA) officials told a senate estimates hearing earlier this year that not all of the original ten incubators would be eligible for further funding.