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 search out inefficiencies and potential price financial savings within the public sector, the authorities tabled her closing report, and its response, on Thursday.
The Silver overview discovered important cost-cutting alternatives, centered on reshaping a “top-heavy” public sector and shedding round 2,000 full-time equal employees.
As an alternative, premier Jacinta Allan and treasurer Jaclyn Symes flagged shedding 1000 jobs, together with 330 senior government 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 web debt is predicted to hit $194 billion in three years – practically 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 economic system.
The Silver overview mentioned there are “substantial alternatives to scale back and streamline entities and their workers numbers via 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 packages for girls comparable to Press Play Ventures, in addition to funding startup accelerators, together with Startmate and VC funds. It additionally helps native startups construct to unicorn standing (a $1 billion valuation). It has 19 workers and a finances of round $10 million, most of which is invested within the native startup group.
LaunchVic CEO Dr Kate Cornick
The state is dwelling to greater than 3,800 startups, valued at $143 billion – a 29-fold enhance since LaunchVic started.
However simply 12 months after being promised $40 million over 4 years, by former treasurer Tim Pallas, LaunchVic’s grant funding was minimize from $12.26m in FY24 to $9.4m in FY25, amid management modifications and departures within the authorities. It went from posting a $143,000 deficit in FY24 to a $4m loss in FY25.
The Silver overview beneficial the state authorities “consolidate department and entity industry support functions, expertise and activities” beneath Make investments Victoria. It additionally known as for the administration of LaunchVic’s current fairness investments, and people held by the Division of Treasury and Finance, to come back beneath the government-backed startup fund Breakthrough Victoria.
General, the state authorities ought to minimize its total investments and scale back danger publicity, the report mentioned.
Rethinking Breakthrough Victoria
The state authorities shared in-principle assist to switch LaunchVic as a standalone entity.
Beneath its plan, LaunchVic’s current startup sector assist actions will come beneath Make investments Victoria — which the federal government championed as a future one-stop store for “dedicated facilitation support to businesses looking to invest in Victoria”.
The federal government supplied partial assist for the Silver overview’s funding consolidation plan, saying the “ongoing management of existing investments, will be consolidated — bringing together the capabilities of Breakthrough Victoria and LaunchVic”.
And the federal government confirmed it’ll minimize the danger profile of its direct fairness funding funds, with decreased funding supplied 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 supplied grants of as much as $300,000 to lure new angel teams and VC funds to the state, and launched Basecamp, a program connecting superior startups to senior government expertise, on high of its current providers.
LaunchVic in July introduced $3.75 million in funding to the state’s startup sector, via assist for VC funds organising store within the state, grants for college pre-accelerator packages, 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 just lately acquired by REA Group.
Elita cofounders Paloma Newton and Jackson Gritching
In January, LaunchVic CEO Kate Cornick mentioned the state’s startup ecosystem had a urgent want for its providers and funding capabilities.
“This isn’t just a nice little innovation thing on the side,” she mentioned.
“That is about reshaping Australia’s economic system and Victoria’s economic system in our context.
“Normalising startups is a really important phase that we need to go through in Australia.”
The Division of Jobs, Expertise, Business 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.
Nicely earlier than the Silver overview, the Victorian authorities used its 2024-25 finances 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 companies like Quantum Brilliance and RayGen.
“As Victoria moves to a new structure for innovation support, the mission remains clear: turbocharge investment, build future industries, and deliver lasting economic transformation for the state,” it mentioned in an announcement posted to LinkedIn.
Business 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 – mentioned closing LaunchVic ought to solely be a final resort for the federal government.
Murray Hurps
“LaunchVic has set the highest bar possible in terms of ambitious, relentless and community-engaged support, the envy of every state and with results to be proud of in terms of investment attracted and ecosystem growth,” he mentioned.
They need to be the very last thing shut down throughout tough monetary instances, if we’ve any hope of getting to raised instances.
I stay hopeful that this determination might be reversed, and the capability that has been constructed on this construction might be retained for additional impression.
Local weather Salad founder Mick Liubinskas, who acquired funding from LaunchVic known as the information “devastating”.
“LaunchVic was the best possible nationwide program for real ecosystem constructing, a mannequin we’d hope each state would observe,” he mentioned.
“They were Climate Salad’s first major grant provider and the national industry would not be at its current strength without it. Thank you to Kate and the whole team.”
Rampersand companion Paul Napthali praised LaunchVic as “a powerful force for the development of a thriving ecosystem” within the for a few years.
It has delivered big impression that’s measurable within the quantity and the worth of firms began right here and the variety of energetic traders empowered by its packages,” he mentioned.
“Everyone in the ecosystem has benefited from their work – it’s a real shame to see it come to an end but its impact will be felt for years, perhaps decades, to come.”
Startup Day by day gaming columnist Harrison Polites mentioned 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 traders, abroad traders, helped solved points within the ecosystem round range, equal alternative. They funded and supported facets of the ecosystem others wouldn’t, and did so prudently. With out extra,” he mentioned.
“It also, smartly, invested in other funders and programs, as opposed to pouring funds startups directly. We have some brilliant investors in Australia, and LaunchVic used government money to harness their expertise to back winners. Rather than creating a political mess – and transparency nightmare for the company receiving backing – by directly backing founders from government coffers.”
Startmate’s former CEO Michael Batko, who stepped down this week after 8 years on the helm, was succinct.
“This is crazy,” he mentioned.
“LaunchVic is the best thing that happened to Victorian startups in the last decade.”
