Australian entrepreneur Paul Evans, the creator of a new Axial motor for electric and hybrid cars, is going to Silicon Valley to seek venture capital funding after failing to secure local interest.
According to Bloomberg, after more than a decade developing the motor, Mr Evans was rejected by several local venture capital funds in his attempts to raise $3 million.
Mr Evans, who is chief executive of Evans Electric, said that local venture capitalists are too risk averse.
“The private sector just won’t step up,” Evans said.
“We’ve been pushed to the point where we’re going to Silicon Valley to raise funds. To me, that’s an unfortunate outcome because it’s a long way from here and we don’t really want to move there.”
Australian investors said that his product won’t be fast enough and he is based too far from potential customers. Evans, whose background combines electronics and motor sports, says the engine is getting interest from overseas because its small size allows it to sit inside a wheel and it doesn’t use expensive rare earth metals.
According to Bloomberg data, since 2012, Australian venture capital for industrial firms has reached only $218 million compared to $A15 billion in the USA over the same period.
This lack of venture capital vision is affecting Australia’s reputation as a country for manufacturing innovation. Australia has slipped to 19th place in the global innovation from 17th place last year and has been even outdone by New Zealand.