IN a state where project funding is so often measured in the billions of dollars, a $1.5 million investment hardly seems like much of a milestone.
IN a state where project funding is so often measured in the billions of dollars, a $1.5 million investment hardly seems like much of a milestone.
But for the founders of Yuuwa Capital, that figure represents both a big step forward for their fledgling business and the WA venture capital space.
The trio – Matthew Macfarlane, Liddy McCall and James Williams – estimate that $1.5 million, the size of their first investment, would very likely represent most if not all of the venture capital committed in WA by east coast-based players, which dominate the sector, for the past 10 years.
While there are some VCs in WA, Yuuwa believes its focus on early stage investment in software, life sciences and biotech, communications technology and clean technology makes it different from most of the few local rivals.
Yuuwa was launched in September 2008, just in time to catch the global financial crisis. At the time it was one of three successful applicants for $20 million under the federal government’s Innovation Investment Fund, to be matched by a dollar-for-dollar investment from the private sector.
The group has spent much of the intervening period building its investment base and going over a huge number of investment proposals.
To attract the federal money, Yuuwa had to raise $20 million of its own, a goal it achieved via a handful of clients of Andrew Hector’s West Perth-based Candor Financial Management.
This week it announced the first investment from that fund, with up to $1.5 million committed to video analytic software that has been developed to monitor movement and which trains itself to identify unusual behaviour.
The software was developed at Curtin University of Technology’s Institute of Multi-sensor Processing and Content Analysis and will be commercialised via an entity called iCetana Pty Ltd.
The software’s uses may be broad but an example is identifying unusual behaviour in crowds, making it a potential crime-fighting tool.
Yuuwa’s founders have distinct backgrounds, which will form the basis of their initial investment strategies.
Mr Macfarlane, co-founder of Perth-based Web 2.0 start-up Vibe Capital, has experience in mergers and acquisitions for various major European companies.
Mr Williams and Ms McCall both have backgrounds in biotech, including key roles with iCeutica Inc and Dimerix Bioscience. Dimerix this month announced a research agreement with Japan’s biggest pharmaceutical group, Takeda.
The group believes venture capital for biotech and ICT start-ups has been lacking. Where it has occurred, often the investors are simply funding the project rather than being able to offer the strategic assistance these companies need to reach the milestones required for the next phase of commercialisation.
“We have the pockets to keep funding things and the networks to raise more funds as required,” Mr Macfarlane said.
Yuuwa’s federal funding agreement restricts it to innovation, with $8 million the most it can commit to any single investment.
It is a 10-year funding model, which, in effect, gives them the start-up funds to get their own venture capital firm up and running.
The trio believes that even east-coast venture capital firms recognise the merit in having a specialist of their sort on the ground in Perth, where they can be hands-on rather than fly-in, fly-out.