An early stage Australian venture capital firm is opening an office in Palo Alto, California, in a bid to plug startups from Down Under into Silicon Valley.

Sydney-based Southern Cross Venture Partners, founded in 2006, closed its first fund, worth $150 million, last year.

The firm aims to pan for promising companies in a venture capital backwater and bring them to the big time.

"As a strategy, it's to invest in an inefficient market, which is Australia and New Zealand, and help migrate the companies to the United States," said John Scull, Southern Cross co-founder and managing director, who is based in Palo Alto.

Portfolio companies that got their start in Australia are: Xerocoat, maker of specialty coatings; Mantara, whose electronic trading systems are used by hedge funds; M&MD, manufacturer of super-conducting filters for the wireless market, and UIactive, whose software syndicates news, music, and TV to mobile users.

Though M&MD remains in Queensland, Australia, and UIactive retains its headquarters in North Sydney, Australia, Xerocoat is now based in Redwood City, California, while Mantara has moved its headquarters to Jersey City, New Jersey;

"We're quite willing and interested in getting in early, like the seed stage, and we'll do that with another Australian seed fund or U.S. venture capital funds," said Mr. Scull, a former executive at Apple. "Typically, at the A round, we'll look at syndicating that and if it's a company with a natural migration to the states, we'll look to syndicate with a company in that state."

In terms of the maturity of the venture capital industry, Australia and New Zealand are 15-20 years behind the United States, he said, likening the relationship to the one between America and Israel, a country whose startups often migrate west to attract U.S. capital and plumb U.S. markets.

In 2007, Experian acquired Australia-born online metrics company Hitwise for about $240 million.