Melbourne-based wealth management firm and consultancy BMY Group is seeking to raise AU$50 million from Chinese investors to back its first venture capital fund. BMY is setting up the fund in response to increasing demand from clients who are looking to diversify away from traditional investments in Australia, such as property, and take on more risk by investing in Australian startups.
The firm has already raised AU$10 million till date and is aiming to close the first AU$15 million tranche by January and the additional $35 million by mid-2017. With this fund, BMY will primarily focus on pre-IPO startups having an established business model with some existing revenue. It will particularly look for startups with global aspirations specializing in industries such as cleantech, biotech, aged care technology but will also consider fintech firms.
BMYG co-founder and managing director Eric Gao told ZDNet that people generally assume that affluent Chinese people are inclined majorly towards investment in real estate. He adds there has been a shift in Chinese growth model which encourages high-net-worth individuals to invest in technologies, domestically and globally.
The fund will facilitate active participation of the group in the startup space. BMYG aims to bridge the gap between China and Australian startups eyeing the Chinese market by providing them apt mentorship and guidance. This will help the startups overcome some of the common commercial challenges they face when expanding into China and other Asian markets. It is also planning to launch a AU$20 million fund in 2017 focused on early-stage startup investments.
BMY Group, led by co-founders Eric Gao and Julius Wei, has invested in ASX-listed fintech startup AfterPay and digital stockbroker OpenMarkets earlier in 2016. Wei said they wish to provide their clients with opportunities already available to Australian investors, as well as give them a more local insight into what they are actually investing in. The announcement of the fund comes at a time when the Australian government is making efforts to strengthen the nation’s ties with China.
