Capital Markets in Australia

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There are many hot sectors in the capital raising markets in Australia.

Mining and Resources: This includes a number of sectors – the first being the existing resources producers, which are seeking to raise capital from capital firms to fund for production. The capital providers include private equity firms, venture capital firms and also banks for lending.

The second sector related to mining and resources are the engineering firms and mining contractors which provide drilling and exploration activities for the miners. These companies seek capital from private equity firms and banks to finance their purchase of equipments or long term equipment leases.

Biotechnology Sector: This sector is typically serviced by venture capital firms, our research has also shown that majority of Australian firms have shown interest in investing in biotechnology sectors. Other capital providers for biotechnology in Australia include universities grants which receive R&D grants from governments. Many biotechnology venture capital funds are actually coming from universities.

Renewable Energy and Clean Tech: The most talked about sector in Australia now, and it is endorsed by the Government. The venture capitalists are now very interested in investing in this sector but may require training to understand this sector. Other capital providers include government grants, and there has been increasing number of grants now available to invest in Clean Tech applications or technologies. Additionally, major oil and gas companies are also becoming large investors into this sector.

E-Commerce: E-commerce and web based companies are always of strong interest from Australian investors. Successful ventures such as Hit Wise, LookSmart, Seek and Wotif are some of the great examples of successful e-commerce companies backed by Australian venture capital companies.

IT Service Providers: An interesting sector that not normally associated with Australia, but Australia has created many successful global IT enterprises, Melbourne IT is a good example as well as a number of IT service providers. Australia leads in Asia in terms of large outsourcing contracts and this has prompted interest in IT services providers. Venture capital funds have been investing in these IT service providers to set their operations.

Technologies and Applications: Australian VCs have been backing many successful technology companies in Australia.

They do not have much experience in semi-conductors industry as in Asia or US, but Australian VC firms have specific experiences and knowledge especially in the mining and resources engineering technologies for instance. Australian venture capital providers have also backed successful Australian software companies, some of the venture capital backed companies including software as application and document management companies.

Environmental technology or Clean Tech is a particular sector that has been in demand, the current Australian Government has also announced numerous initiatives to make this as the Sector of the next decade, replacing the old mining and commodities industries.

The government has even introduced new grants and set up its own investment funds to invest in clean technologies. However, it remains as a relatively new concept for many venture capital investors, and retraining is required, and this transition process is likely to take several years to complete.

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