The Victorian government’s flagship tech investment fund, Breakthrough Victoria, ended up in the red for a second year in a row after just four years in operation.
The fund, which cut costs while ramping up investment, and increasing returns on cash deposits, posted a $5.7 million loss, according to its 2025 annual report, attributing it to unrealised changes in the value of investments, foreign exchange rate fluctuations and an office relocation under new CEO Rod Bristow.
It follows a $3 million loss in FY24.
The sovereign investor, which has faced sustained criticism by several prominent members of the Victorian startup community, invested $118 million across 22 deals, having assessed 436 potential investments in FY25.
Half of the investments were in new startups and funds, alongside five follow-on investments and six co-investments with the University Innovation Platform.
Perhaps the most notable investment of the past financial year was the bailout of portco Seer Medical, which was revived after the metech startup’s administrators found three investors willing to back the business with $40 million from Breakthrough Victoria BV), which retains a 25% stake, joined by neurodiagnostic equipment manufacturer Cadwell Industries, and Singapore’s TrialCap.
BV took a $30 million stake in 2022 and went on to provide additional emergency funding to first failure in BV’s portfolio since its launch in 2021. Seer was handed to voluntary administrators in early January.
The company’s cash balance sat at $291.9 million including $75.1m in un-utilised operating grant funds from prior years ; • $138.9 million in capital funds for investments already approved by the Board, including uncalled capital of $54.9m; and • $70.4m in new government funding in 2025.
Perhaps stung by criticism in previous years about the cost of the fund, Breakthrough Victoria was at pains to point out that expense growth continued to fall and sits below the Consumer Price Index.
The management expense ratio has gone from 19.4% during its first 15 months of establishment during the initial setup phase (Mar 2021 to June 22), to 3.9% in FY24 and now 3.4% in FY25. Total expenses remained relatively stable, increasing by just $100,000 last financial year to $17.8 million.
Breakthrough Victoria’s management expense ratio. Source: BV annual report
Chair John Brumby wrote in the annual report that while traditional capital “is retreating from deep tech and other future-focused sectors”, the fund is stepping in with a mission-driven approach and investment focus aligned with Victoria’s economic priorities.
“Breakthrough Victoria’s investments have attracted over $1.29 billion in public and private capital alongside our own commitments, which equates to $3.21 in additional capital for every dollar Breakthrough Victoria commits,” he said.
“These results demonstrate the catalytic role government-backed Venture Capital plays in transforming an economy through investment in innovation.”
CEO Rod Bristow, who took on the role in February said Breakthrough Victoria had a net operating profit of $200,000 amid a year of strategic transformation.
“While non-cash losses from foreign exchange, asset revaluations and disposals reflect temporary market volatility, particularly in the second half of the financial year, they do not impact the company’s core financial health and strategic positioning,” he wrote in the annual report.
“As of 30 June 2025, 45.5% of the portfolio was held in USD, underscoring Breakthrough Victoria’s global investment strategy and exposure to high-growth opportunities.”
Bristow said that $3.21 in additional capital is attracted from every $1 the fund commits, with an average of 7.7 co-investors per portfolio company
“Breakthrough Victoria’s Internal Rate of Return since inception is tracking ahead of public and private benchmarks – exceeding the ASX Small Ordinaries Index over the same period – and an independent report found our investments are forecast to contribute up to $5.3 billion to Victoria’s economy by 2035,” he said.
The financial highlights include investment values rising 23% to $321.5 million and net assets growing to $605.2 million.
Startups receiving investment included synthetic diamond creator Quantum Brilliance, livestock methane reduction startup Number 8 Bio, additive manufacturing startup Conflux’s $11 million Series B, Sydney proteins startup Harvest B’s $3.5m pre-Series A and Umps Health.
Breakthrough Victoria’s financial results. Image BV annual report
