Victoria is preparing a major shake-up of its startup support architecture, with flagship agency LaunchVic set to be dismantled and its functions absorbed into other bodies. The shift follows the Silver review of the Victorian public service, which concluded that the state’s innovation and industry programs have become fragmented, costly, and hard for businesses to navigate. In parallel, the government plans to curb its equity investment risk by reshaping the mandate and funding of state-backed investment vehicle Breakthrough Victoria.
Silver review targets a sprawling support system
The Independent Review of the VPS, led by former senior bureaucrat Helen Silver, found that Victoria’s industry support spending has surged from at least $236 million in 2014-15 to more than $660 million in 2024-25. While that headline figure suggests a strong commitment to innovation, the report argues that the money has been spread across a confusing array of entities and programs. It concludes that this complexity has made government support harder, not easier, for industry to access.
LaunchVic to be abolished as a standalone agency
One of the review’s most consequential recommendations is to abolish LaunchVic as a standalone entity. Created in 2016 to accelerate Victoria’s startup ecosystem, LaunchVic has overseen grants, capacity-building initiatives, and co-investment funds such as the women founder-focused Alice Anderson Fund. The report proposes that its grant, facilitation, and capability programs be transferred into Invest Victoria, effectively ending LaunchVic’s independent role while retaining its core functions inside government.
Consolidation under Invest Victoria and Breakthrough Victoria
Under the government’s in-principle response, Invest Victoria will become the central gateway for startup and industry support, positioned as a single point of contact for businesses looking to invest in the state. LaunchVic’s remaining equity holdings, along with other startup-related investments managed by the Department of Treasury and Finance, are set to be consolidated under Breakthrough Victoria. At the same time, the government has signaled that Breakthrough Victoria will operate with a lower risk profile and reduced funding, aligning with broader efforts to cut direct equity exposure.
Fiscal pressures drive risk reduction
The restructuring comes against a backdrop of mounting fiscal pressure, with Victoria’s net debt forecast to reach about $194 billion within three years, roughly ten times the level when Labor took office a decade ago. The Silver review identified a “top-heavy” public sector and recommended targeted reductions in entities and staff, leading to a plan to cut around 1000 roles and save hundreds of millions of dollars in wages. In this context, trimming equity investment programs and consolidating agencies has been framed as a way to reduce risk while still maintaining some innovation support.
A busy final chapter for LaunchVic
The decision lands after one of LaunchVic’s most active years, during which it offered grants of up to $300,000 to attract new angel groups and venture funds and launched Basecamp, a program connecting advanced startups with senior executive talent. In mid-2025, the agency announced $3.75 million in support for the local startup sector, including funding for VC funds establishing a presence in Victoria, university pre-accelerator programs, and community initiatives for founders. Its Alice Anderson Fund continued to deploy capital into women-led startups, adding investments in companies such as pet health venture Elita Genetics and medtech player GonGlobal.
Startup community warns of long-term damage
Leaders across the Australian startup ecosystem have condemned the decision, arguing that dismantling LaunchVic risks undermining a decade of ecosystem-building. Figures such as UTS head of entrepreneurship Murray Hurps and Climate Salad founder Mick Liubinskas have described the move as devastating and warned that LaunchVic should be among the last programs cut if Victoria wants a pathway back to growth. Investors including Rampersand partner Paul Napthali and former Startmate chief executive Michael Batko have credited LaunchVic with helping create thousands of startups, attract outside capital, and professionalize local investors, and say its impact will be felt long after its closure.
Victoria’s overhaul of LaunchVic and reshaping of Breakthrough Victoria marks a decisive pivot in how the state supports innovation, trading a dedicated startup agency for a streamlined, centralized model under fiscal constraint. Supporters of the reforms argue that consolidation will reduce duplication, simplify access, and better manage public risk, while critics fear the loss of a specialized, community-embedded champion for startups. How effectively Invest Victoria and a slimmed-down Breakthrough Victoria can preserve momentum in a sector now worth an estimated $143 billion will determine whether this cost-cutting exercise is remembered as prudent discipline or a strategic misstep.