Commonwealth backed Australian Business Growth Fund will be actively seeking to deploy more capital into Small Business and Medium Enterprises to address new and emerging challenges facing our national defence.

These challenges pave the way for significant industry transformation. Companies that can provide solutions to address these capability requirements will be rewarded with strong tailwinds. Growth capital can accelerate a business’s ability to deliver on contracts and therefore embed them in long-term commitments to build defence sector capability.

SMEs are the lifeblood of the Australian economy. Making up 54% of GDP, they provide employment to two-thirds of the private sector. They are shaking up Australian industries to solve some of our biggest challenges and are well placed to address the new capability requirements of the defence sector and support the sector in building on-shore sovereign capability.

The Australian Business Growth Fund’s CEO, Anthony Healy, participated in a panel discussion on this topic at this week’s Defence Roundtable in Canberra, chaired by the Federal Treasurer, Jim Chalmers.

“I am delighted to have participated in the Federal Treasurer’s Defence roundtable, an important opportunity to bring together key capital providers, with the aim to unlock and remove barriers for additional investment into the defence sector. This roundtable is a first step in encouraging investors, including ABGF, to deploy new capital into the sector to support the build out of sovereign defence capability”, said Mr Healy.

The Australian Business Growth Fund (ABGF) is Australia’s only purpose-built growth capital fund dedicated to the small-to-medium enterprise (SME) sector. Built on a unique public-private partnership model that is facilitated by a powerful alliance between the Federal Government and six leading banks, the Fund has over $500 million in capital to deploy in entrepreneurs, disruptors and growth-oriented businesses to unlock economic benefits for all Australians.

To date, ABGF has deployed over $150 million across a range of sectors from the east coast to the west. These businesses are building advanced manufacturing capabilities onshore; electrifying the mining and Defence sector; and disrupting traditional retail and logistics models. Two of ABGF’s portfolio companies are already playing significant roles supporting the defence sector:

  • Derwent Industries, via its subsidiary Mackay Rubber, is one of the leading track system suppliers in Australasia, manufacturing, refurbishing and developing defence vehicle components; and is also a major supplier of rubber components to the Australian Submarine Corporation for use in the Collins Class submarines as well as other surface ships.
  • 3ME Technology, an Australian-grown high-tech business, with more than 15 years experience designing, manufacturing and integrating lithium-ion battery systems to electrify heavy-duty vehicles operating in mission-critical environments, including defence.

ABGF CEO, Anthony Healy says: “We are keen to back businesses that are building sovereign capabilities to address the new and emerging challenges of the Australian Defence Force and the broader community. Derwent Industries and 3ME Technology advancements are examples of how ABGF backs ambitious businesses to grow, not just through the capital we provide, but also through bringing together the capabilities and connections the business needs  to reach its growth aspirations.”

As a leading investor of growth capital, ABGF makes initial investments of $5 million to $15 million in profitable businesses with between $2 million to $100 million in revenue, for up to a minority stake in the business. “We act as a catalyst for growth, while leaving the business in control,” Mr Healy says.

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