From Holdens to hematopoietic stem cell expansion: meet the investor taking Australian manufacturing way up the value chain

From Holdens to hematopoietic stem cell expansion: meet the investor taking Australian manufacturing way up the value chain

A company that can turn old newspapers into pharmaceutical-grade solvent is among the investees of a rare specialist fund for advanced material manufacturing technologies, which has just opened its second fundraising round.

Manifex , based in the Melbourne suburb of Scoresby, raised just over $1 million in its first round. One of two companies it took an interest in was Circa Group – a Coburg-based company that, in addition to old newspapers, can turn straw and sawdust into a flexible molecule with a bevy of chemical manufacturing applications.

Manifex is assisting Circa with mezzanine debt financing to fund its recent move to a bespoke manufacturing facility, which has allowed it to process large orders from European chemical companies.

Manifex’s other investee, Cytomatrix , promises leukaemia sufferers more stem cells from a bone marrow or cord blood transplant, thanks in part to a patented short-nanofibre production machine.

Manifex bought its interest in both companies from the Victorian Government-backed Victorian Centre for Advanced Materials Manufacturing (VCAMM). Manifex managing director, Iain Ralph, worked at VCAMM for six years helping commercialise the ideas of its portfolio companies, and says they are poorly served by traditional start-up funding mechanisms.

“Finance people talk to finance people and they’re just not on the same wavelength as the entrepreneurs out of bodies such as VCAMM,” says Ralph, a qualified engineer with a masters degree in business administration.

“We can understand the value in these businesses, which need a lot more than money. I’m active on all the boards because the path to commercialisation requires some pretty specialist knowledge.”

The struggle most laypeople have in understanding advanced materials manufacturing was highlighted by Manifex’s inability to raise enough money to justify a closed-end fund structure.

“That typical process where you raise $40 million, close and then spend it just wasn’t going to work for us,” he says.

Manifex instead has an evergreen structure, raising capital as required to support its investees’ needs. Ralph is targeting $2 million in this latest round, and hopes the fund can grow to $6 million – if you have a good materials manufacturing idea, Ralph wants to hear it.

His two fellow investors so far have both been based offshore, however a local angel group is also mulling an investment and Ralph hopes patriotism can help attract more.

“Australia has some great minds and great opportunities for advanced manufacturing,” he says. “With the injection of appropriate early-stage investment to qualified ventures, Australia will realise substantial economic dividends.”

 

Article reposted from the Business Review Weekly (Published 02 February 2015 15:02)