Deputy NSW Premier John Barilaro has announced the state government will be providing fintech-focused investment firm H2 Ventures with a loan guarantee of $2 million to enable it to access a $4 million loan from existing backer Investec Australia.
Coming through the Government’s $190 million Jobs for NSW arm as a gazelle loan guarantee, it will help H2 Ventures develop up to 40 new fintech startups through its accelerator program over the next few years, creating 400 new jobs across NSW. The firm stated it is on track to invest in at least 100 early-stage fintech startups over the next three to five years.
Ben Heap, founding partner of H2 Ventures, said the support of the NSW Government and Investec Australia, which acquired a stake in the firm last March, will help take the accelerator to the next level.
“This will allow us to attract more domestic and international entrepreneurial talent to NSW and to support a significant number of new fintech ventures, creating new channels growth and jobs,” he said.
The loan comes after H2 Ventures’ attempt to launch Australia’s first listed fintech investment group, H2 Ocean, last year.
Backed by independent directors David Koch, Beyond Bank chair Anne O’Donnell, and former Assistant Innovation Minister Wyatt Roy, H2 Ocean sought to raise between $27 million and $55 million to provide a stable pool of capital for long-term investment opportunities. It failed to reach the minimum subscription levels.
While the ASX may not have been quite ready for H2 Ocean, the firm will continue to look to raise an unlisted fund this year. CEO of Jobs for NSW Karen Borg welcomes its work, saying organisations like H2 Ventures are reshaping the financial services industry.
“In 2015 investment in the Australian fintech market totaled $438 million and by 2020 it is predicted to reach $4.2 billion. Jobs for NSW’s support for H2 Ventures demonstrates our focus on supporting the NSW startup ecosystem to scale to global standards,” she said.
The NSW Government has shown a particular interest in the fintech sector over the last year, eager to position Sydney as not only Australia’s fintech hub, but the ideal hub for global businesses looking for a launching pad into Asia as global economic activity shifts to the region.
For H2 Ventures the loan comes as it gears up for the launch of its upcoming accelerator intake. Previous graduates include Equitise, Stockspot, SuperAlbert, and Edstart.
Image: Ben and Toby Heap. Source: Supplied.