Australian technology king scouts for prospects

By Aimee McClinchy

Friday 28th April 2000

Roger Allen

One of Australia's top venture capitalists has visited and is considering local companies for a $A175 million fund and a separate Silicon Valley-based incubator.

Roger Allen, co-chairman of Sydney-based Allen & Buckeridge and an IT adviser to Australian governments, said his new fund was looking to place seed and early-stage venture-capital money in IT companies on both sides of the Tasman after his first $A100 million fund solely invested in Australians. Mr Allen's company (www.a-b.com.au) began the first IT venture capital fund in Australia in 1996, placing $A100 million seed money in 20 companies, 18 of which were start-ups.

Local businesses could also apply for a position in Allen & Buckeridge's joint venture with Deloitte Touche Tohmatsu, ePark, a virtual - or mostly online - incubator headquartered in Silicon Valley.

Mr Allen has been visiting this country in recent weeks and will speak to local entrepreneurs at IT Investment Network's second investment forum in Auckland on May 8.

"We are constantly looking for companies," Mr Allen, an IT entrepreneur turned venture capitalist, said. "We've always operated with the intention of having companies from both countries."

New Zealand companies would be helped into the Australian market first before other markets, he said.

Both countries' strengths lay in telecommunications, media, middleware tools (equipment that makes networks talk to each other) and other value-added applications, he said.

"I've always felt the talent [in Australasia] is particularly in software. We are sophisticated users and we push the envelope. Because there are fewer resources people make the dollar go further."

Allen & Buckeridge expects to list six companies on the Australian Stock Exchange this year, with its first float on the ASX in June, and has recently formed a joint venture with Broadview, the world's largest IT merger and acquisition investment bank.

His first fund was funded by public sector superannuation - the primary source of investment in venture capital globally - and $A27.5 million from the government and a significant amount of the proceeds Mr Allen made from selling the company he founded 23 years ago, Computer Power Group.

Mr Allen built Computer Power in to a $300 million company with 3000 staff after starting with two staff and an initial venture-capital injection from media baron Rupert Murdoch.

The new fund is made of $A90 million in super funds, $A10 million from Allen & Buckeridge's investors and $A75 million from Ord Minnett, raised from the public.

Mr Allen, heavily involved in both government and industry issues and the former deputy-chairman of Austrade, lives a third of each month in Silicon Valley, overseeing the growth of ePark. ePark, a government and Deloitte-supported venture, aims to fast track companies on to the global stage through the help of experienced consultants. Set up as a virtual park with little real estate, companies swap a minor equity stake or options in turn for a place, he said.

Mr Allen stressed the focus for companies he might invest in was not necessarily global. Although 13 of the 20 companies the first fund invested in have been set up in the US, the alliance with Broadview might see other avenues such as mergers followed.

Mr Allen said the IT startups had to concentrate on a realistic business plan, not just ideas, to be considered. "Anyone who has built a company, like I have, knows how hard you have to work and the determination it takes. People have to stop looking through rose-tinted glasses."

Sausage Software founder Steve Outtrim and Telemedia Networks International's chief executive Chris Jones will also speak at the IT Investment Forum at Sky City, Auckland. To register: www.itinvestment.com

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