The Victorian authorities will wind down startup assist company LaunchVic and rework expertise funding fund Breakthrough Victoria as a part of broader public sector reforms set to save lots of the state $4 billion.
The choice has rattled the state’s startup sector, and spells an unsure future for state-backed accelerators, grants, and funding funds tailor-made to native expertise.
Months after commissioning former Premier and Cupboard secretary and Allianz Australia deputy MD Helen Silver to seek out inefficiencies and potential price financial savings within the public sector, the authorities tabled her remaining report, and its response, on Thursday.
The Silver assessment discovered vital cost-cutting alternatives, centered on reshaping a “top-heavy” public sector and shedding round 2,000 full-time equal employees.
As a substitute, premier Jacinta Allan and treasurer Jaclyn Symes flagged shedding 1000 jobs, together with 330 senior govt and technical specialist roles to save lots of $359 million. Victoria’s public service wages invoice has greater than doubled over the previous decade to $38 billion in 2024-2025.
Victoria’s internet debt is predicted to hit $194 billion in three years – almost 10x the $20bn determine when Labor got here to energy a decade in the past. State debt is now round 1 / 4 of the whole Victorian financial system.
The Silver assessment stated there are “substantial alternatives to scale back and streamline entities and their employees numbers by means of rigorously focused cessation, merging and streamlining.”
Amongst its key suggestions is abolishing LaunchVic — the government-backed startup assist company based in 2016. The organisation created the ladies founder-focused co-investment VC the Alice Anderson Fund, and backed the award-winning entrepreneurship applications for women such as Press Play Ventures, in addition to funding startup accelerators, together with Startmate and VC funds. It additionally helps native startups build to unicorn status (a $1 billion valuation). It has 19 employees and a price range of round $10 million, most of which is invested within the native startup group.
LaunchVic CEO Dr Kate Cornick
The state is residence to greater than 3,800 startups, valued at $143 billion – a 29-fold improve since LaunchVic started.
However simply 12 months after being promised $40 million over four years, by former treasurer Tim Pallas, LaunchVic’s grant funding was cut from $12.26m in FY24 to $9.4m in FY25, amid management adjustments and departures within the authorities. It went from posting a $143,000 deficit in FY24 to a $4m loss in FY25.
The Silver assessment really helpful the state authorities “consolidate division and entity trade assist capabilities, experience and actions” below Make investments Victoria. It additionally referred to as for the administration of LaunchVic’s present fairness investments, and people held by the Division of Treasury and Finance, to return below the government-backed startup fund Breakthrough Victoria.
Total, the state authorities ought to reduce its total investments and cut back danger publicity, the report stated.
Rethinking Breakthrough Victoria
The state authorities shared in-principle assist to exchange LaunchVic as a standalone entity.
Beneath its plan, LaunchVic’s present startup sector assist actions will come below Make investments Victoria — which the federal government championed as a future one-stop store for “devoted facilitation assist to companies trying to spend money on Victoria”.
The federal government provided partial assist for the Silver assessment’s funding consolidation plan, saying the “ongoing administration of present investments, might be consolidated — bringing collectively the capabilities of Breakthrough Victoria and LaunchVic”.
And the federal government confirmed it can reduce the danger profile of its direct fairness funding funds, with lowered funding provided to the new-look Breakthrough Victoria.
Startup assist in focus
Plans to abolish LaunchVic come after a busy 12 months for the company.
In 2025, it provided grants of up to $300,000 to lure new angel groups and VC funds to the state, and launched Basecamp, a program connecting advanced startups to senior executive talent, on high of its present companies.
LaunchVic in July introduced $3.75 million in funding to the state’s startup sector, by means of assist for VC funds establishing store within the state, grants for college pre-accelerator applications, and startup founders’ group occasions.
Its Alice Anderson Fund invested in pet well being startup Elita Genetics, and medtech GonGlobal, including to an funding portfolio that includied city knowledge startup Neighbourlytics — which was not too long ago acquired by REA Group.
Elita cofounders Paloma Newton and Jackson Gritching
In January, LaunchVic CEO Kate Cornick stated the state’s startup ecosystem had a urgent want for its companies and funding capabilities.
“This isn’t only a good little innovation factor on the aspect,” she stated.
“That is about reshaping Australia’s financial system and Victoria’s financial system in our context.
“Normalising startups is a extremely essential part that we have to undergo in Australia.”
The Division of Jobs, Abilities, Trade and Areas, which oversees LaunchVic, was unable to remark on the time of publication.
The choice to scale back Breakthrough Victoria’s funding allocation comes after a tough 12 months for the government-backed personal funding firm, which booked a $5.7 million loss in 2024-25.
Effectively earlier than the Silver assessment, the Victorian authorities used its 2024-25 price range to chop its funding by a median of $90 million a 12 months over 4 years.
Breakthrough Victoria appeared to defend its document on Thursday, reflecting on its funding in corporations like Quantum Brilliance and RayGen.
“As Victoria strikes to a brand new construction for innovation assist, the mission stays clear: turbocharge funding, construct future industries, and ship lasting financial transformation for the state,” it stated in a press release posted to LinkedIn.
Trade response
The information has appalled many within the startup sector.
UTS head of entrepreneurship Murray Hurps, who’s launching the annual Startup Muster report tonight – for the primary time with none state or federal monetary report – stated closing LaunchVic ought to solely be a final resort for the federal government.
Murray Hurps
“LaunchVic has set the very best bar attainable when it comes to bold, relentless and community-engaged assist, the envy of each state and with outcomes to be pleased with when it comes to funding attracted and ecosystem development,” he stated.
They need to be the very last thing shut down throughout tough monetary instances, if we now have any hope of getting to raised instances.
I stay hopeful that this choice might be reversed, and the capability that has been constructed on this construction might be retained for additional influence.
Local weather Salad founder Mick Liubinskas, who obtained funding from LaunchVic referred to as the information “devastating”.
“LaunchVic was the very best nationwide program for real ecosystem constructing, a mannequin we’d hope each state would observe,” he stated.
“They had been Local weather Salad’s first main grant supplier and the nationwide trade wouldn’t be at its present energy with out it. Thanks to Kate and the entire group.”
Rampersand accomplice Paul Napthali praised LaunchVic as “a strong pressure for the event of a thriving ecosystem” within the for a few years.
It has delivered large influence that’s measurable within the quantity and the worth of firms began right here and the variety of lively buyers empowered by its applications,” he stated.
“Everybody within the ecosystem has benefited from their work – it’s an actual disgrace to see it come to an finish however its influence might be felt for years, maybe many years, to return.”
Startup Each day gaming columnist Harrison Polites stated he was in disbelief
At nearly each startup occasion I’ve gone to in Victoria, somebody from LaunchVic was within the room. They attracted curiosity from interstate buyers, abroad buyers, helped solved points within the ecosystem round variety, equal alternative. They funded and supported facets of the ecosystem others wouldn’t, and did so prudently. With out extra,” he stated.
“It additionally, neatly, invested in different funders and applications, versus pouring funds startups instantly. We’ve got some sensible buyers in Australia, and LaunchVic used authorities cash to harness their experience to again winners. Moderately than making a political mess – and transparency nightmare for the corporate receiving backing – by instantly backing founders from authorities coffers.”
Startmate’s former CEO Michael Batko, who stepped down this week after 8 years on the helm, was succinct.
“That is loopy,” he stated.
“LaunchVic is the most effective factor that occurred to Victorian startups within the final decade.”
