Asia-Pacific venture capital firm Pacific Channel is launching its first local vehicle, Fund IV, targeting $55 million in deployment to early-stage Australian deep-tech startups.

The new multi-stage fund, which will invest in up to 30 startups from pre-seed through to Series B, aims to bridge a critical funding gap for companies commercialising world-class research across science and engineering, a historically challenging area for capital access in Australia.

The move is partially backed by the Victorian government, with the state’s startup agency, LaunchVic, providing a $300,000 grant through its VC Support Program to incentivise the firm’s establishment in the state.

Pacific Channel, established in 2004 and one of Australasia's most experienced deep-tech investors, specialises in science- and engineering-based solutions for health, ag/food, and the environment.

“While there are several later-stage deep-tech investors in Australia, as a multi-stage investor providing pre-seed through to Series B capital, we can support deep-tech companies at the earliest and most critical stages of their development,” said Brent Ogilvie, Managing Director of Pacific Channel.

“We have already identified a number of investment opportunities which reflect the strength of Australia’s deep-tech pipeline and are now progressing through our due-diligence process, with several nearing completion.”

This fresh capital infusion is structured as an Early-Stage Venture Capital Limited Partnership (ESVCLP), offering investors favourable tax exemptions on capital gains from eligible venture capital investments, plus a 10 per cent offset on contributions, a key government incentive designed to attract VC money.

The fund’s launch was announced by The Hon Danny Pearson, Victoria’s Minister for Economic Growth and Jobs, who framed the investment as a major vote of confidence in the state’s burgeoning tech scene.

LaunchVic CEO Dr Kate Cornick emphasised the strategic importance of attracting specialist investors like Pacific Channel.

“LaunchVic is really proud to back Pacific Channel’s expansion to Australia and delighted to support the diversification of Victoria’s early-stage venture capital community,” Dr Cornick stated. She added that the state's universities are key to this pipeline: “Victoria is home to some of the best Universities in the world, producing incredible DeepTech breakthroughs.”

The goal is to move research into the commercial world faster: “Access to more capital in these crucial early stages will ensure more of that research is commercialised and scaled, rather than remaining in the lab.”

Minister Pearson highlighted the state's rapid growth as the context for the international attention. “We’re supporting global venture capital funds to set up in Victoria because it helps our startups scale faster and create more high-skilled jobs. Pacific Channel’s first Australian fund reinforces Victoria’s position as a leader in attracting global venture investment.”

He provided recent statistics to support the claim of a "booming" ecosystem: “The number of local startups has more than tripled since 2017 to 4,300 and the enterprise value of the sector now sits at $A143 billion.”

Fund IV is designed to capitalise on Pacific Channel’s two decades of deep-tech investment across Australasia, with a focus on companies possessing “strong scientific foundations and clear pathways to global scale,” according to Ogilvie.

The firm has a proven track record, having invested in 67 companies across its three other funds to date, achieving 11 successful exits. These include the sale of Quantifi Photonics to Teradyne and Engender Technologies to CRV, the latter of which reportedly generated a 75x return.

Pacific Channel stresses an active approach, going beyond capital to provide operational, technical, and commercial support. This includes a team with five PhDs for scientific due diligence and four partners with multi-exit founder experience. The firm also claims deep expertise in licensing and corporate partnering, leveraging its network of global corporates, such as Intel, IKEA, and CRV, and an investor base that includes sovereign wealth funds and private family offices across the Asia-Pacific.