Kiwi startup developing prospective musicians through gamification

New Zealand tech startup Melodics has raised US$1.2m in seed capital to take its instrument learning software to more aspiring musicians.

The company, founded by former Serato CEO Sam Gribben, has successfully closed its latest round of investment led by Berlin-based music firm Ableton AG, with support from US accelerator 500 Startups, New Zealand investment funds Tuhua Ventures and K1W1, and Alex Rigopulos, founder of music gaming studio Harmonix.

“Our innovative approach to music learning has already helped over 100,000 finger drummers around the world,” Gribben says.

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Kiwi tech company raises millions for expansion

Kiwi technology company Feijipiao is expanding across New Zealand and eyeing other markets after closing a multi-million dollar angel investment round.

The company, founded in 2016 by Peter Li, is a Chinese language online travel business, offering flight bookings across multiple airlines in Chinese.

The website offers competitive fares and multiple payment solutions, in either Chinese yuan or New Zealand dollars, through automated search, booking, and ticketing processes.

The investment was headed by The Icehouse and Chinese-led angel fund Eden Ventures – its first investment.

Led by Chinese venture capitalists and entrepreneurs, Eden Ventures focuses on high performing start-ups, with specific interest in serving Chinese in New Zealand or enabling New Zealand founders to launch into the Chinese market.

The funding values Feijipiao at between $5 million and $10m, and would be used to hire staff, open its first New Zealand office in Auckland and fund further growth, as well as prepare the business for expansion into Australia and other markets.

The company was already bringing in revenue of about $900,000 per month, with Li saying he expected this to hit $1m in the coming few months.

Icehouse fund manager Jason Wang said both groups had invested based on Feijipiao’s growth in the five months since it launched, as well as the potential they saw for it.

“In three months, feijipiao.co.nz have transacted millions of dollars without a physical office, it’s all in the cloud.

“The results speak for themselves – this is a group of the right people doing the right thing in the right market.”

The company’s success had been helped by millennials influencing the purchasing behaviours of their parents, who tended to use more traditional travel agents Li said.

The investment would enable the company to continue its expansion as well as providing strategic value for the firm.

“Our team has built a strong foundation in New Zealand to prepare ourselves for expansion into global markets with established Chinese communities, and international students from China.

“By partnering with Eden Ventures and The Icehouse, we can tap into their expertise of forming long-term growth strategies for global expansion, and supporting technology driven companies.”

First published on nzherald.co.nz on 15 Sept 2017

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Snowball Effect – Recap of the last 3 years

AANZ member, Snowball Effect has recently released a three year update on the performance of their platform. It contains a wealth of fascinating insight and is really transparent about the money raised and the profile of their investors. It’s a timely provocation to all our members. This sort of data is critical to raising the profile, performance and reputation of early stage investment as an asset class worthy of attention.

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Over its first three years of operation, Snowball Effect has raised $29 million across 35 offers. 25 of these offers were made available publicly and 10 were made available privately. The public offers generated $23.1 million in investment and the private offers generated $6.1 million. The private offers are now the fastest growing part of the Snowball Effect marketplace.

Capital raised

The capital being raised in each offer is significant relative to the rest of the industry in NZ, with eight offers reaching over $1 million raised and the average public offer reaching $923k. This compares to a market average for public offers on other platforms of just $371k. Large public offers like Zeffer and Designer Wardrobe are attracting significant numbers of investors. The average number of investors into a public offer was 142 people and 14 offers have received investment from over 100 investors.

Investment sizes

There have been 3,935 investments made through Snowball Effect. The largest portion of the amount invested came from investments in the $10k to $50k range, with $8.9 million worth of investments from this range. The largest single investment was $1.25 million and 632 investments were over $10k. At the smaller end of the scale, the largest number of investments was in the $1k and $5k range, with 2,162 investments in this range.

Investor behaviour

The platform now has an audience of 15,509 of whom 2,413 have made an investment. So far, 27% have made more than one investment and 7.5% have made four or more investments. 17 people have invested in more than 10 offers and the most active investor has invested in 25 offers.

Investor demographics

The average age is 45, the youngest investor is 18, and the oldest investor is 88. So far, 24% of active investors on the platform are female, which compares to a national average in 2005 of 5% for angel investor networks in 2012 (according to the Angel Association of NZ).

Wholesale investors

There are 896 wholesale investors registered on the platform. Wholesale investors are eligible to receive a wider range of investment offers because of their net-worth, experience with private investments, or financial sophistication. The average investment into a private offer is $35k and there are 48 investors who have invested over $100k.

Additional services

Snowball Effect launched the first public offer using the equity crowdfunding rules in New Zealand. In company’s second year, it introduced a private offer service and added a nominee service that lets companies manage multiple investors through a single legal entity. This year it introduced an investor profile that lets investors control what types of private offers they get access to and a director matching service that helps companies find independent or non-executive directors. 80 people have completed their independent director profile. Snowball Effect has also introduced a share registry management service which is currently tracking the shareholding of 468 investors.

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Launch Taranaki and NZVIF to invest in local startups

The New Zealand Venture Investment Fund and Launch Taranaki, the New Plymouth-based angel investment fund, have formed a partnership to invest into start-up companies, primarily in Taranaki.

Launch Taranaki was formed last year.  The angel group has over 20 members, and is chaired by Ian Frame, who previously ran Rangatira, a Wellington-based private equity fund, for over a decade.  The government-owned NZVIF partners with angel groups and investors through its Seed Fund to co-invest into young startups.

Mr Frame said the partnership with NZVIF’s Seed Co-Investment Fund – or SCIF as it is known – will bring more investment into innovative companies in the Taranaki region.

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MEDIA RELEASE: AANZ supports Government Changes to Startup Investment

Angel Association NZ welcomes the changes the Government has announced today to the Seed Co-Investment Fund mandate outlined in SCIF 2.0.

Early stage investment has established itself as fundamental to New Zealand’s future economic and social wellbeing. It is a key contributor to the growth of New Zealand’s innovation ecosystem.

“Recognizing that building momentum is the first step in generating value, the changes to the New Zealand Investment Fund’s seed co-investment reflect the maturing of the early stage investment industry in New Zealand,” said Angel Association Chair, Marcel van den Assum.

“As an industry we are moving from prioritizing the number of deals we do, to prioritizing the value of the ventures we have invested in. We are pleased to see the investment cap lifted from $750,000 to $1.5m; doubling down on companies that are performing improves the odds of a rewarding return.”

Mr van den Assum also added that it was good to see NZVIF sending a clear message about the importance of well executed due diligence and active investor engagement.

“Quality due diligence improves the odds of success,” he said noting that it was also critical that ‘in-flight due diligence’ was regularly carried out to ensure the funds are being deployed effectively and strategically with a view to the return on that investment.

“As angel investors we have limited capital and time. We must be more diligent in our assessment both of a venture’s ability to scale and in assessing which companies we will retain in our portfolios,” he noted.

Angel Association New Zealand also welcomed the announcement as an indication of the Government’s ongoing commitment to the early stage ecosystem.

“Creating a self-sustaining, innovation ecosystem is a 20-30 year exercise and it’s pleasing to see the Government continue to support the early stage kiwi companies who are part it,” he concluded.

Ends

For more information, please contact:

Suse Reynolds, AANZ executive director
mob: 021 490 974 or email: suse.reynolds@angelassociation.co.nz

Marcel van den Assum, AANZ chair and 2015 Arch Angel
mob: 021 963 459 or email: marcel@angelassociation.co.nz

The Angel Association of New Zealand (AANZ)

The Angel Association is an organisation that aims to increase the quantity, quality and success of angel investments in New Zealand and in doing so create a greater pool of capital for innovative start-up companies. It was established in 2008 to bring together New Zealand angels and early-stage funds. AANZ currently has 27 members representing over 600 individual angels associated with New Zealand’s key angel networks and funds. Recent NZ Venture Investment Fund data revealed angels have invested more than $NZ437m in over 928 deals and 296 companies in the last 10 years. For more, please visit: www.angelassociation.co.nz

 

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Minister wants NZVIF’s Seed fund to deliver better returns

Economic Development Minister Simon Bridges wants the New Zealand Venture Investment Fund to deliver bigger returns under a new investment framework for the Seed Co-investment Fund that will let the early-stage investor take a more active approach.

Among the changes, the government has raised the investment cap for the $52 million NZVIF-managed Seed Co-investment Fund to $1.5 million, ditched the $250,000 funding limit, which Bridges in a statement said will generate stronger commercial returns and better support new start-up companies. A cap on how much can be invested alongside each angel network has been dropped in favour of a $1 million notional commitment, and NZVIF will also be allowed to co-invest with qualified investors outside the traditional angel networks provided it will support promising companies that are trying to commercialise a product or service.

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