Editor’s note: This report has been updated with a response from the Minister for Economic Growth and Jobs.
The Victorian government plans to wind down startup support agency LaunchVic and rework technology investment fund Breakthrough Victoria while cutting its direct equity investments, as part of broader public sector reforms set to save the state $4 billion.
The landmark decision has rattled the state’s startup sector, and spells an uncertain future for state-backed accelerators, grants, and investment funds tailored to local talent.
Review calls for major overhaul
The government revealed its decision on Thursday in response to a long-awaited review from senior bureaucrat Helen Silver, who was commissioned to search for inefficiencies and potential cost savings in the public sector.
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The Silver review found “substantial opportunities to reduce and streamline entities and their staff numbers through carefully targeted cessation, merging and streamlining” across the public sector.
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Among its key recommendations was the abolition of LaunchVic — the state-backed startup support agency behind co-investment funds like the Alice Anderson Fund, and founder support schemes like Press Play — as a distinct entity.
The state government should consolidate LaunchVic’s grant and startup support programs within Invest Victoria, it found.
It also called for the management of LaunchVic’s existing equity investments, and those held by the Department of Treasury and Finance, to come under the government-backed startup fund Breakthrough Victoria.
Overall, the state government should also cut its overall investments and reduce risk exposure, the report said.
Allan government to wind down LaunchVic, rethink Breakthrough Victoria
The state government agreed the nine-year-old LaunchVic should wind down as an independent agency.
It now plans to consolidate LaunchVic’s innovation and commercialisation support functions, and the management of its existing investments, with the capabilities of Breakthrough Victoria.
In a statement provided to SmartCompany, Minister for Economic Growth and Jobs Danny Pearson said the government will retain startup support “through a single entity, bringing together the functions of Launch Vic and Breakthrough Victoria, streamlining support while continuing to grow the ecosystem in Victoria.”
The state is “home to a world-class research and innovation ecosystem that’s delivering real benefits – improving lives and driving economic growth,” he added.
The recommendation to fold LaunchVic’s “grant and facilitation and capacity uplift program activity” into Invest Victoria gained the government’s in-principle support.
However, those startup support programs are set to come under the new hybrid LaunchVic-Breakthrough Victoria entity, the precise shape of which is under development.
Calls to reduce overall risk exposure in its equity investments also gained partial support, with the government planning to cut overall investment and sharpen its funding profile.
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Reduced funding will be offered to the new-look Breakthrough Victoria.
Startup support in focus
Plans to abolish LaunchVic come after a busy year for the agency.
In 2025, it offered grants of up to $300,000 to lure new angel groups and VC funds to the state, and launched Basecamp, a program connecting advanced startups to senior executive talent, on top of its existing services.
LaunchVic in July announced $3.75 million in investment to the state’s startup sector, through support for VC funds setting up shop in the state, grants for university pre-accelerator programs, and startup founders’ community events.
Its Alice Anderson Fund invested in pet health startup Elita, and medtech GonGlobal, adding to an investment portfolio including urban data startup Neighbourlytics — which was this week acquired by REA Group.
Speaking to SmartCompany in January, LaunchVic CEO Kate Cornick said the state’s startup ecosystem had a pressing need for its services and investment capabilities.
“This isn’t just a nice little innovation thing on the side,” she said.
“This is about reshaping Australia’s economy and Victoria’s economy in our context.
“Normalising startups is a really important phase that we need to go through in Australia.”
SmartCompany has contacted LaunchVic for comment.
The decision to reduce Breakthrough Victoria’s funding allocation comes after a difficult year for the government-backed private investment company, which booked a $5.7 million loss in 2024-25.
Well before the Silver review, the Victorian government used its 2024-25 budget to cut its funding by an average of $90 million a year over four years.
Breakthrough Victoria appeared to defend its record on Thursday, reflecting on its investment in firms 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 said in a statement posted to LinkedIn.
