Global telecommunications company Ericsson has joined the growing number of technology investors expanding their presence in Australia by establishing a multimillion-dollar venture capital fund that will invest in the development of mobile Internet technologies in Australia.
Expected to raise between $60-80 million by the end of the year, the fund will target businesses at an early stage of growth, committing between $1-5 million to selected companies, in return for 10 to 40 per cent equity.
"I am delighted that the board in Sweden has recognised the talents and expertise that Australia has to offer in the field of IP and wireless data," Leo Silver, Ericsson's general manager for business development, enthused. "By financing a fund of this type, Ericsson has shown strong support and belief in Australian innovation and business," he said.
Ericsson's board has agreed to pro- vide $20 million to kick-start the fund, indicating the initiative will be used as a guide for possible investment fund ventures elsewhere.
In recognising the maturity of the Australian IT&T industry, Ericsson joined a number of investors opening their coffers to talented startups down under.
Earlier this month, Hong Kong-based technology firm Asia Online pledged $30 million in investment dollars to Internet and electronic-commerce companies in Australia and New Zealand.
The company has already acquired five Australian startups and will continue its aggressive expansion strategy by targeting niche-oriented developers and service providers.
Meanwhile, Intel appointed its first manager of corporate business development in Australia to look for new investment opportunities. The company's first investment deal with Melbourne-based company 80-20 Software was sealed earlier this year in cooperation with Sydney-based venture capitalist Allen & Buckeridge.
The latest influx of foreign capitalists into the Australian IT&T market comes in the wake of the Ralph Report recommendations and the Federal Government's decision to exempt foreign investors from capital gains tax as of October 1.