New Astrolab funding for tech startups

Tech Incubator and AANZ member, Astrolab recently announced a group of Wellington business people will invest up to $5m in high tech startups being supported by Astrolab.

Four Wellington-based businesspeople have teamed up with specialist business incubator Astrolab to create a $5m fund which will drive a financial runway of up to $20m for startup tech companies across New Zealand.

Astrolab CEO Brett Oliver says having access to this level of capital is hard to come by in New Zealand when turning complex-technologies into export businesses.

“Astrolab’s funding pool will be used to catapult technology startups we establish and grow, enabling us to concentrate on achieving our mission-critical milestones quickly by dealing directly with our fund in the first instance,” says Mr Oliver.

The $20m financial runway over the next two years relies on $5m from Astrolab’s LP fund, underpinned by the newly formed Wellington-based investment group, and Callaghan Innovation’s Tech Incubation program which delivers targeted funding to complex technologies.

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$100m fund for low emissions ventures

The Angel Association welcomes the establishment of a $100m government fund to back ventures looking to ameliorate climate change.

 

Climate Change Minister James Shaw has launched an investment fund to help finance “low emissions” businesses.

The fund will take the form of a company established by Treasury – New Zealand Green Investment Finance Ltd – so will operate independently of the Government and look to make a profit.

This makes it slightly different to the $3 billion Provincial Growth Fund.

The Government has committed to injecting $100 million into NZ Green Investment Finance Ltd to get it going.

Shaw expects the return the company will eventually make will mean it can repay the Government and see it stand on its own commercial footing.

“More and more investment dollars are looking for clean, sustainable ventures to invest in,” he says.

“Establishing this fund positions New Zealand to attract its share of that investment capital.”

 

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Key metrics for assessing an angel deal

This is a terrific article setting out key metrics to ask about when assessing an angel deal from David Jackson, a Committee Member of Sydney Angels Inc. Some great tips on how to be an effective angel investor are also embedded.

“Let’s say you have a brilliant idea for a startup.

You know your Hats-for-Cats app is going to take the world by storm. And while you may be half-starved, you have a whiteboard and a T-shirt with your logo on it, and the energy, guts, and grim determination to make it happen.

But the funds scraped together from friends, family, and savings for market research and a demo are now completely exhausted. The credit cards are completely maxed out. You’ve realised it may be time to find an angel investor who can lay enough runway for a developer and the go-live phase. The good news is: angels want to give you money. That’s our job.”

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Demonstrating the power of angels supporting kiwi tech

Kiwi software firm SwipedOn has been sold to UK company SmartSpace Software for $11 million.

The British company provides workspace management software and has wanted to expand that offering through an acquisition since July.

Tauranga-based SwipedOn’s software helps visitors sign in when visiting an organisation. Its backers included Ice Angels, Enterprise Angels, New Zealand Venture Investment Fund and K1W1.

A terrific outcome for founders and angels alike and a proof point of the power of angel investment supporting kiwi tech companies to succeed.

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Snowball Effect 2018 Annual Update

2018 has been a record year for Snowball Effect. We have raised more capital than any previous year and continue to grow steadily. Some of the metrics below are disclosed to the FMA as part of our compulsory reporting as a regulated online investment platform. We believe that the private capital markets in NZ can benefit from being as transparent as possible. We’ve recently been collaborating with researchers from the University of Auckland and University of Minnesota to uncover insights into investor behaviour and the growth in online capital raising around the world. Below are some of the highlights from the past year:

Larger offers
We have now raised $41.8 million in capital across 54 offers. The private capital part of the business continues to grow with $12.7 million raised privately in 23 offers. The average size of offers that we work with has been increasing and 13 offers have been over $1 million in size. We have completed 22 offers that attracted more than 100 investors.

Growing investor base
Our investor audience now includes 17,700 people, of whom 7,300 have actively indicated interest in investing in a particular offer. We’ve found that each indication of interest averages out to about $1,000 in investment in the final offer per indication of interest. One of the most important metrics for a two-sided marketplace business is “transacted users”. In our case, 3,100 people have made a completed investment on the platform.

Larger investors
We are now working frequently with large family offices, institutional, and sophisticated investors. 810 people have invested more than $10,000 through the platform and 67 people have invested more than $100K through the platform. There are now 1,400 wholesale investors on Snowball Effect who are eligible to receive private offers. $27.7 million in transaction volume has come from people investing more than $10K.

Increasing diversification
A key difference between Snowball Effect and other players in the online investing space is that we want investors to take the private company asset class seriously as part of their overall investment portfolio. To that end, we’re pleased to see that 33% of our investors have now invested in more than one offer and 14% have invested in three or more offers. 30 people have invested in 10 or more offers (which research from the Kaufman Foundation shows is the base level of diversification needed to approach the underlying asset class returns for angel and venture capital investing). The most active investor on Snowball Effect has now invested in 27 offers.

Ongoing services
Our ancillary services have continued to grow with 14 companies now tracking their legal share ownership records in the Snowball Effect share registry. These companies represent 2,059 shareholding records. We also now have 163 director profiles from investors that are available as independent directors for companies that raise capital through Snowball Effect.

For more information from Snowball click here.

 

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How to scale – the Goodnest story

As Madonna so famously sung, we are living in a material world. If she were to update that song, she might tweak it slightly and mention the fact that we are also living in a gig economy. And Goodnest, a platform that matches up jobs that need doing with suppliers willing to do them, is harnessing that shift and attempting to make it even easier for both sides of the equation with a range of new features, a launch into new regions and a new capital raise to fund more growth.

Goodnest was one of the first domestic jobs marketplaces to pop up in this country, launching around four and a half years ago. And things have changed considerably since then, says co-founder James MacAvoy, who, along with his brother, also founded the DVD rental company Fatso that was bought by Sky.

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Angel backed Flick Energy on the next leg of it’s growth journey

New Zealand’s largest petrol company is entering the retail electricity market, spending $46 million for a controlling stake in Flick Electric.

Z Energy, which also supplies the Caltex branded stations across New Zealand, said it was acquiring a 70.1 per cent stake in Flick, which offers access for household customers to wholesale electricity prices.

Mike Bennetts, Z’s chief executive, said the purchase was “another step towards the long-term sustainability of Z, and the role we play in a lower carbon transport future”.

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Manawatu Agtech Start-Up Koru Diagnostics Raises $900k Seed Investment

A Palmerston North-based start-up company, Koru Diagnostics, has had impressive success with its first funding round.

Koru, which is developing cost-effective laboratory and rapid farmside tests, was substantially oversubscribed when it closed its seed funding round recently with close to a million dollars.

CEO, Rhys McKinlay, is very happy with the outcome. “We raised over $900k, mostly from angel investors, which will give us a commercialisation runway through until late 2019. These funds will be directed towards product development and commercial scale-up, protecting our IP and securing new commercial partnerships,” he says.

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Aquafortus wins global award

New Zealand’s Aquafortus Technologies has won the TechXchange Rising Star award for best new technology at Singapore’s International Water Week, this closes out a successful six weeks for the start up, which included an oversubscribed funding round and breaking ground on its first pilot plant in the U.S.

Aquafortus was invited to exhibit under Singapore’s National Water Agency, the Public Utilities Board at Singapore International Water Week. Singapore International Water Week is a global event that brings together world leaders in the wastewater industry, with more than 21,000 participants from 125 different regions.

The tradeshow was a great success for Aquafortus – generating more than a dozen sales leads across eight countries. It also saw new sector applications for Aquafortus’ Zero Liquid Discharge (ZLD) technology, with significant interest from major players in the semiconductor and textile industries, says Daryl Briggs, CEO of Aquafortus.

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The number of deals is shrinking but venture capital still hit a record in Australia

Venture capital in Australia hit a record $US630 million ($AU849 million) in the 2017-18 financial year, up 12% on the previous 12 months, despite a drop in the number of deals, according to Venture Pulse Q2 2018, a quarterly report by KPMG.

Over the three months to June, $US209.09 million of startup investment was recorded in Australia, up from the $US169.8 million the previous quarter.

However, the number of deals was 27, down from 31, continuing a trend for bigger raises to more mature startups.

“Venture financing continues to rise in Australia, keeping pace with worldwide trends,” says Amanda Price, Head of KPMG Australia High Growth Ventures.

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Lead Partners

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