80% of MVP Ventures grants awarded to metro Sydney, sparking regional equity concerns
About 80% of recipients of the NSW government’s MVP Ventures Program were Sydney startups with most hailing from affluent suburbs in the north and east.
The NSW government’s MVP Ventures Program is about to open its second round of applications. A SmartCompany investigation has revealed that 80% of the cash awarded to first-round recipients went to businesses in metro Sydney, as well as affluent northern and eastern suburbs.
This has called into question the program’s effectiveness in supporting startups that exist beyond the borders of Heathcote McDonald’s and the M1 Northbound twin servos.
The MVP Ventures Program was re-launched in December 2023 after a six-month hiatus — providing between $25,000 and $50,000 of matched funding to early-stage startups to support the commercialisation of their products and services. This is from an overall grant pool of $3 million.
This is considerably less than the previous funding on offer by the Coalition when the MVP Ventures Program was expanded in late 2022.
It originally promised matched funding of up to $200,000, as part of a $10 million yearly commitment over four years. Prior to this, the program was known as the MVP Grant program and offered matched funding up to $25,000.
However, the program was scaled back by the Minns government, which put a number of industry grant schemes on hold after being elected in March 2023.
MVP Ventures Program a win for affluent Sydney siders
Out of the 34 recipients of the MVP Ventures Program grant since the December 2023 relaunch, only seven didn’t hail from Sydney, representing roughly 20% of the recipient pool.
Four of the projects were located on the central coast of NSW, one from Newcastle, one from the Illawarra and Shoalhaven region, and one from the Cootamundra Gundagai region
Furthermore, the vast majority of Sydney recipients listed the projects as either being metro-based or in affluent suburbs such as the Northern Beaches, Double Bay, Woollahra, Ku-Ring-Gai and Waverley.
Two recipients were listed as being located in Liverpool and Bayside, respectively, and both listed their projects as being located in Randwick.
According to Investment NSW, a sub-sector of the Department of Enterprise, Investment and Trade (DEIT), applications for the program are evaluated on eligibility and assessment criteria, with no consideration given to the business’ location.
“Applications are assessed in the order in which they are received,” an Investment NSW spokesperson said in an email to SmartCompany.
“Location of the business is not considered as part of the assessment process.”
According to the spokesperson, Investment NSW conducts online information sessions and makes these resources available on its website to aid in accessibility for regional startups.
“These sessions are also recorded and available on our website for those who cannot make the specific time,” the spokesperson said.
Additionally, program information is shared with universities in regional NSW and companies registered with the Regional Landing Pad in the Sydney Startup Hub.
The department has stated the NSW government is working on an Innovation Blueprint that aims to more effectively support the sector, including equitable access to startups.
“It’s not uncommon to see a disconnect between the strategy and the objective of a grant and how that is communicated to grant seekers; and the reality of a grant and what they’re actually looking for and how they’re actually funding,” Janine Owen, CEO and founder of Grant’d — a business that specialises in grant acquisitions for businesses — told SmartCompany.
For Owen, the disproportionate funding signals a gap in the applications being submitted by regional businesses.
“That needs to be addressed and that gap needs to be closed,” Owen said.
“If it is a capacity issue or a capability issue, and these businesses are not putting forward strong business ideas and or strong applications, then Investment NSW needs to take that on board and see how they can support stronger applications and better business models to access this program.”
NSW is lagging behind Victoria and Queensland
Owen also highlighted the results of the MVP Ventures Program as representative of a broader issue within NSW’s startup ecosystem.
“NSW lags behind Victoria and Queensland in government support for startups. The MVP program is highly contested because startups here need funding, but it has let down regional businesses,” Owen said.
Comparatively, the Victorian Government supports startups through LaunchVic, which provides a variety of grants and programs aimed at different stages of startup development. LaunchVic offers $50,000 grants for early-stage ag-tech startups and support for scaling med-tech startups.
It also recently launched a $300,000 grant program for angel networks.
It also runs the Alice Anderson Fund, which supports women-led startups by providing early-stage capital. The fund offers co-investment opportunities, addressing the gender investment gap and fostering diversity in the startup ecosystem.
Over in Queensland the Advance Queensland initiative includes several programs designed to support startups.
The Ignite Ideas Fund provided grants of up to $200,000 to help Queensland-based startups commercialise innovative products and services.
The Queensland government also offers a Regional Enablers Program with funding of up to $100,000 per annum over three years.
There is also a Female Founders Co-Investment Fund that offers funding from $50,000 to $200,000 matched at a 1:3 ratio for a raised round led by an eligible investment entity. And the Accelerating Female Founders program offered grants between $50,000 to $200,000 for both early and later-stage startups.
With the next round of MVP Ventures grants opening on July 1, 2024, it will be interesting to see if and how the MVP Ventures Program adapts to support the success of more regional startups.
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