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Kate Cornick, the CEO of scrapped Victorian startup agency LaunchVic, has issued a heartfelt message to supporters, revealing that while the decision might come as a shock it could also be considered a “healthy” move.
The state’s startup community has been reeling over the past week due to the Victorian Government’s decision to merge LaunchVic with Breakthrough Victoria as part of a broader review across the public sector to slash $4 billion in expenses from the state budget.
LaunchVic, which is costing the government about $10 million a year to run, has directly supported more than a third of the state’s startups since it was established in 2016.
In a LinkedIn post today, Cornick reveals she received messages of support, both publicly and privately, from “hundreds of stakeholders” who have expressed their support for LaunchVic over the past week.
“The groundswell of support has meant a great deal to the team and me,” says Cornick.
“Like all periods of change, there is opportunity if you choose to see it. In this case, the opportunity is to shape the next chapter of Victoria’s startup ecosystem.
“There is much to work through, but I want to reassure those who work with us that, for now, it is very much business as usual.”
Cornick points out that all of LaunchVic’s programs will continue, including the pre-accelerator grant round which is currently open.
However, the 30X30 program, which helps Victoria's fastest-growing tech scaleups achieve unicorn status, will be paused with plans in place to deliver the program next year.
“Roles are being maintained, and our funding and existing investments remain in place,” says Cornick.
“In the months ahead, the LaunchVic board and I will work alongside the Breakthrough Victoria team and the Victorian Government to ensure a smooth and well-considered transition to the new entity.
“While change can be a shock, it can also be healthy.
“LaunchVic has been operating for nine wonderful years, and, in that time, we have achieved a tremendous amount. There is no denying that the ecosystem has come a very long way.”
The Victorian startup ecosystem, including startups, scaleups and unicorns, is currently estimated to be worth $143 billion.
Since 2017, the sector has grown to more than 4,300 companies, with LaunchVic estimated to have unlocked more than $1.5 billion in private sector capital.
“My heartfelt thanks to the team for their resilience and passion during a challenging week, and to the many ecosystem partners, founders, and community members who have taken the time to reach out with their support,” says Cornick.
“This year has tested us, but it has also reinforced the strength and ambition of Victoria’s startup ecosystem, placing us in an excellent position for what comes next.”
Breakthrough Victoria is the state government’s investment arm, with a focus on deep tech in the fields of health, clean energy and space. Its portfolio, which currently stands at just under 50 equity investments, is expected to generate $5.3 billion in economic impact for Victoria by 2035.
The decision to absorb LaunchVic into Breakthrough Victorian followed a government review earlier this year of its innovation and commercialisation entities. The government argues that the changes to LaunchVic will ensure these entities remain “effective, efficient and positioned to deliver sustained impact”.
The government believes the merger will strengthen and streamline innovation support, although the startup community remains sceptical.
The decision to close down LaunchVic has been criticised as a “backward step” for business innovation in Victoria.
“It’s hard to reconcile the government’s ambition to be an innovation leader with its decision to wind back LaunchVic,” says Sam Rowse, CEO and founder of Melbourne-based logistics tech company MachShip.
“The agency ran an event earlier this year targeted at the logistics industry, pulling together innovators in the space alongside some of its largest players. It was a rare event, and I was given the opportunity to present at it.
“For context, this kind of gathering is incredibly rare in our industry. Events in the sector usually don’t draw interest from major companies, or are heavily geared towards being an advertorial for one key player.
“LaunchVic cut through all of this and added incredible value to our sector as a result - the kind we weren’t getting anywhere else.”
Rowse, who founded MachShip in 2014 and is currently expanding operations into New Zealand, points out that a common ethos in his industry is the “elimination of bureaucracy and drive for efficiency”.
“There’s a lot government could learn from the sector it’s now absorbing into a broader investment machine,” he says.
“The loss of a dedicated, founder-centric agency is a step backward for Victoria’s startup competitiveness.”
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