Key Takeaways
- • Innovation Victoria, the state-owned venture fund, reported a $165.8 million operating surplus for FY2026, its final year as Breakthrough Victoria, according to the annual results reported by Startup Daily.
- • The fund ended FY2026 with $824.2 million in net assets, up 36% year on year, while assets under management grew 41% and expenses fell 32%.
- • Two profitable exits, Infleqtion (NYSE listing in February) and World View (acquired by Ondas in April), contributed to the result, though the report did not quantify their individual contributions.
- • The Opposition Coalition, led by Jess Wilson, has pledged to wind up the fund and sell its portfolio before the November 28 state election, with savings estimated at $1.27 billion over a decade.
- • The annual report reflects a portfolio-level internal rate of return of 21.9% as of FY25, but the reported gains are largely unrealised and do not represent a cash dividend to taxpayers.
Summary
Innovation Victoria, the state-owned venture capital fund, recorded a $165.8 million operating surplus in FY2026, its final year operating as Breakthrough Victoria before the Labor government merged it with LaunchVic in July, according to Startup Daily. The fund finished the year with $824.2 million in net assets, up 36% on the prior year, and assets under management grew 41%. Expenses were reduced by 32%. The result contrasts sharply with FY25, when the fund posted a $200,000 operating surplus but a $5.7 million loss after investment revaluations and other adjustments. FY24, the fund's third year, recorded a $3 million loss, a figure critics have cited in their long-running campaign to shut the fund down.
The result arrives weeks before the November 28 state election. Opposition leader Jess Wilson has pledged to wind up the fund and sell its investment portfolio, arguing the proceeds would fund elective surgeries. Shadow finance minister Bridget Vallence previously put the savings from winding up the fund at $1.27 billion over a decade, while the surgery program the Liberals intend to fund costs $1.27 billion over four years. Startup Daily cautions that a forced sale could see investments offloaded at a discount, shortchanging taxpayers.
Over five years as Breakthrough Victoria, the agency committed $529.3 million across 103 investments, including a $25 million grant to Melbourne's Jumar Bioincubator, and said its portfolio attracted more than $1.8 billion from other public and private investors. The fund recently invested a further $10 million in the Alice Anderson Fund for women founders. CEO Rod Bristow, in his first full financial year in the role, said the fund "has demonstrated the power of patient capital to attract private investment, commercialise research and grow globally competitive companies." The agency also pointed to a recent strategic collaboration with Nvidia to accelerate AI adoption.
The two FY26 exits were both US companies. Quantum computing firm Infleqtion listed on the NYSE in February, and the fund's $29 million stake was worth five times its original investment when trading opened, though that reflects market price rather than a realised sale. Stratospheric balloon maker World View, in which the fund invested $37 million in May 2024, was acquired by Nasdaq-listed Ondas in April for around US$150 million, mostly in scrip. A subsequent US filing showed 3,341,927 Ondas shares held by Breakthrough Victoria for resale. Ondas shares peaked above US$13.50 in early June but have since fallen to US$6.32, and selling at the peak would have yielded around A$60 million. The annual report did not disclose the value of any sale.
The fund's FY25 portfolio internal rate of return of 21.9% exceeded the median for Australian, US and European venture funds from the 2021 vintage. Startup Daily notes that these gains do not constitute a dividend to taxpayers, as they include the value of holdings the state still owns. In June, capital returned over five years was put at $83.7 million.
The result arrives weeks before the November 28 state election. Opposition leader Jess Wilson has pledged to wind up the fund and sell its investment portfolio, arguing the proceeds would fund elective surgeries. Shadow finance minister Bridget Vallence previously put the savings from winding up the fund at $1.27 billion over a decade, while the surgery program the Liberals intend to fund costs $1.27 billion over four years. Startup Daily cautions that a forced sale could see investments offloaded at a discount, shortchanging taxpayers.
Over five years as Breakthrough Victoria, the agency committed $529.3 million across 103 investments, including a $25 million grant to Melbourne's Jumar Bioincubator, and said its portfolio attracted more than $1.8 billion from other public and private investors. The fund recently invested a further $10 million in the Alice Anderson Fund for women founders. CEO Rod Bristow, in his first full financial year in the role, said the fund "has demonstrated the power of patient capital to attract private investment, commercialise research and grow globally competitive companies." The agency also pointed to a recent strategic collaboration with Nvidia to accelerate AI adoption.
The two FY26 exits were both US companies. Quantum computing firm Infleqtion listed on the NYSE in February, and the fund's $29 million stake was worth five times its original investment when trading opened, though that reflects market price rather than a realised sale. Stratospheric balloon maker World View, in which the fund invested $37 million in May 2024, was acquired by Nasdaq-listed Ondas in April for around US$150 million, mostly in scrip. A subsequent US filing showed 3,341,927 Ondas shares held by Breakthrough Victoria for resale. Ondas shares peaked above US$13.50 in early June but have since fallen to US$6.32, and selling at the peak would have yielded around A$60 million. The annual report did not disclose the value of any sale.
The fund's FY25 portfolio internal rate of return of 21.9% exceeded the median for Australian, US and European venture funds from the 2021 vintage. Startup Daily notes that these gains do not constitute a dividend to taxpayers, as they include the value of holdings the state still owns. In June, capital returned over five years was put at $83.7 million.
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