EiR tech fund set to grow into China

Technology investor Entrepreneurs in Residence is planning a major diversification by establishing a US$20 million ($26 million) venture capital fund targeting Australian companies expanding into China.

Plans for the new fund follow a change in EiR’s ownership, with Sydney fund manager Trivest acquiring a 30 per cent shareholding.

With Technology Park manager Zernike Australia continuing as a 53 per cent shareholder, the new ownership structure strengthens EiR’s financial base.

EiR has been a major supporter of emerging Western Australian companies in the information and communication technology sector over the past five years, having backed 25 companies that have attracted a total investment of $40 million.

The new venture capital fund will be established in partnership with a Chinese institution and will invest in Australian companies in the ICT and biomedical sectors seeking to expand into China.

It will operate on a dollar-for-dollar basis, with EiR and its Chinese partner contributing equal funding.

“It is quite exciting because it’s an Australian-Chinese joint venture to help Australian companies go to China,” Zernike Australia chief executive Arnold Stroobach told WA Business News.

Mr Stroobach said the fund aimed to invest in up to six Australian companies. EiR’s new shareholder, Trivest, was established last year through the merger of three existing investment funds, and is seeking a range of property and ‘alternative’ investments.

One of its founding directors, Alastair Hood, who was previously with Macquarie Bank and law firm Gilbert & Tobin, has joined the board of EiR as chairman. EiR’s continuing minority shareholders are its executives Greg Reibe and Annabel West and business advisory firm William Buck.

Mr Reibe said EiR would continue to focus on the ICT sector, which has provided plenty of opportunities to date.

Companies in which EiR has invested include defence software developer Calytrix, mining services firm Intierra and Solutions IT, which has developed software packages for the school education sector.

EiR was also a founding shareholder in PanoramaLabs, which has attracted plenty of investor interest.

Listed IT company ST Synergy, chaired by Athans & Taylor senior partner John Athans, has invested $5 million in PanoramaLabs in the past two years, giving it a 33 per cent shareholding. This illustrates the potential of the Australian Stock Exchange as a source of risk capital for emerging technology companies.