The fund recently merged with LaunchVic to become Innovation Victoria, and most recently backed Melbourne IVF startup Gon Global’s $1.2m raise earlier this month.
Liberal MP and Opposition finance spokesperson Bridget Vallence said winding up the fund and selling off its investments will “save” taxpayers $1.27 billion over the next decade.
“After a few short years, Breakthrough Victoria has spent hundreds of millions on foreign owned ventures that manufacture goods offshore, or on bailouts for companies that sunk into administration, and has failed its promise to deliver 15,000 jobs,” she said
“Unless we abolish Breakthrough Victoria now, Victorians will continue to see hundreds of millions of dollars lost on ventures that deliver no jobs and no return.”
Vallence says the fund has also failed to meet is stated target investment return and failed deliver any dividend to Victorian taxpayers.
The fund has committed more than $500 million across 100-plus investments, and says it has attracted $1.5 billion in additional funding from other investors. It’s been an extensive investor in other VC funds, especially at the university level, and encouraged VCs from other states to open offices in Victoria.
But it also posted a $5.7 million loss in FY2025, and has faced sustained industry criticism in recent years.
High profile portfolio company Seer Medical went in voluntary administration in early 2025 before Breakthrough Victoria chipped into a $40m rescue deal three months later to revive the eight-year-old medtech startup, which is tackling clinical monitoring at home for conditions such as epilepsy diagnostics and management.
There have been wins, including a 5x uplift when Infleqtion listed on the NYSE, and while much of the funding has gone to Victorian startups, other investments that raised eyebrows, including spending $52m on two US companies to set up shop in Melbourne – California-based test equipment manufacturer Liquid Instruments, which scored $15 million and $37 million for near-space exploration platform World View.
Former treasurer Tim Pallas, who launched in 2021, then gave BV a $360m haircut – $90m annually over four years – in the FY25 Victorian budget. The fund is now run by experienced VC manager Rod Bristow.
Vallence said with net debt heading towards $200 billion and interest payments exceeding $1 million an hour, “continuing Labor’s failed Breakthrough Victoria cannot be justified”.
There was no explanation of how the Coalition would divest the investments made by the fund. In 2026, no AI-based startups have seen their valuations marked down by investors as the impact of the technology washes through the sector.
There was no mention of LaunchVic’s future under Innovation Victoria in the shadow finance minister’s announcement. The VC fund was the senior partner in the alliance.
Innovation Victoria’s focus is “giving founders access to the tools, programs, advice, networks and investment they need to move forward, while strengthening connections across the ecosystem and attracting more capital into Victoria,” the Labor government says.
Glitch Capital’s Geoff Tarrant chair the board, with Scale Investors founder and Alice Anderson Fund chair Susan Oliver and clean energy expert Monique Conheady among the directors.
Latest polling on the November 28 Victorian state election gives the Coalition a clear lead over Labor, which has been in power since 2014 and is seeking a fourth term.
But it has also faced sustained criticism from the state Opposition and business leaders over high operating costs, successive deficits and the quality of its investments.
US-based observation balloon company World View and local medtech startup Seer Medical, which was rescued from voluntary administration, are among the “dubious investments” made by the fund, Ms Vallence said on Saturday.
“After a few short years, Breakthrough Victoria has spent hundreds of millions on foreign owned ventures that manufacture goods offshore, or on bailouts for companies that sunk into administration, and has failed its promise to deliver 15,000 jobs,” she said.
“Unless we abolish Breakthrough Victoria now, Victorians will continue to see hundreds of millions of dollars lost on ventures that deliver no jobs and no return.”
The Coalition has not explained how it would wind up the Breakthrough Victoria component of Innovation Victoria and divest its investments, nor how doing so would redirect $1.27 billion to government coffers.
But with net debt nearing $200 billion and interest payments $1 million an hour and growing, Ms Vallence said the state could no longer justify an innovation investment vehicle.
Her comments come just days after the NSW government announced a $150 million Science and Innovation Fund that will serve to boost research commercialisation and back local startups in a similar way to Breakthrough Victoria.
“Victorian taxpayer money must be respected and should be spent delivering essential services, and that’s exactly what our Liberal and Nationals team will do,” Ms Vallence added.
