Startup Genome and the Global Entrepreneurship Network Launch the Global Startup Ecosystem Report 2018

Released at the Global Entrepreneurship Congress (GEC) in Istanbul, GSER 2018 features strategic startup, investment and policy insights from over 10,000 founders in 60 ecosysytems – including New Zealand.

With insights ranging from the fast-growing dominance of ICT verticals to the filling of critical gaps in Success Factors both funding and startups, the Global Startup Ecosystems Report (GSER) 2018 continues to present thought-leadership and knowledge building driven by the world’s largest primary ecosystem research, Voice of the Entrepreneur. This is where we find out what it takes to build dynamic startup ecosystems with both local and global resonance and which cities around the world are doing it best.

Produced in partnership between Startup Genome and the Global Entrepreneurship Network (GEN) this year’s Global Startup Ecosystems Report launches at the Global Entrepreneurship Congress in Istanbul – signaling a strong commitment to advancing a greater understanding of startup ecosystems and the global network of capital and connections that drive them.

“We’ve now entered the Third Wave of innovation – where our global startup community is disrupting industries by combining technology with deep industry expertise. This is creating a potentially game-changing opportunity for smaller, less mature startup ecosystems that can now build out competitive advantage at a global level by focusing on their DNA and legacy strengths,” shares Startup Genome CEO and co-founder JF Gauthier.

A fitting occasion for the launch of this collaborative report, the Global Entrepreneurship Congress gathers thousands of entrepreneurs, investors, researchers, policymakers and other startup champions from more than 170 countries to identify new ways of helping founders start and scale new ventures around the world.

“Research in the field is vital to shaping the interventions necessary to empower entrepreneurs around the world,” said Jonathan Ortmans, president of the Global Entrepreneurship Network. “As thousands of startup champions gather this week to explore innovative approaches, efforts such as the Global Startup Ecosystem Report help us become better informed about what is needed.”

Incorporating data from Crunchbase and Orb Intelligence, as well as the voices of over 10,000 founders from 24 countries worldwide and counting – including some of New Zealand’s top startups like Flick Electric, Fuel 50 and Nyriad – GSER 2018 presents an incisive look at over 60 ecosystems. Through an analysis of startup output and legacy traits, it identifies the industries where each ecosystem has the most potential to build the vibrant economy for which it is uniquely positioned.

This year, GSER the report takes a close look at key sub-sectors such as Advanced Manufacturing & Robotics, Agtech, A.I., Big Data & Analytics, Life Sciences and Cybersecurity, as well as new technologies in education, health, advertising and finance. The sub-sectors in focus point towards imminent entrepreneurial revolutions. Thanks to SpaceX we may already have a car in space – but will we have greater diversity and value distribution on the ground and in our startup ecosystems? These are among key qualitative issues that GSER 2018 also looks at.

In the New Zealand ecosystem in particular, GSER provides a detailed look at the following subsectors: agtech and new food, health and life sciences and govtech.

Angel Association NZ has been delighted to partner with over a dozen ecosystem participants, including NZ Trade and Enterprise, Callaghan Innovation, the Ministry of Business Innovation and Employment, the tech and founder incubators, NZX and others to bring a wealth of insight to the New Zealand findings.

Commenting on the value of the report, outgoing AANZ Chair Marcel van den Assum said that not only did the report raise New Zealand’s profile with the 60+ other ecosystems also taking part but it provided insights into where we are best placed to focus our resources to enhance the impact of New Zealand startups and technology.

Download the full report here: www.startupgenome.com/report2018.

 

ABOUT US

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 30 members representing over 700 individual angels associated with New Zealand’s key angel networks and funds.

Startup Genome
Startup Genome works to increase the success rate of startups and improve the performance of startup ecosystems globally. Fueled by the Voice of the Entrepreneur – the world’s largest primary research conducted with more than 10,000 startups annually – Startup Genome advises leaders of innovation ministries, agencies and organizations supporting startups. It brings data-driven, actionable insights, clarity and focus needed to produce more scale-ups, jobs and economic growth worldwide. Visit www.startupgenome.com for more and stay up to date on Twitter or Medium.

The Global Entrepreneurship Network

The Global Entrepreneurship Network operates a platform of programs in 170 countries aimed at making it easier for anyone, anywhere to start and scale a business. By fostering deeper cross border collaboration and initiatives between entrepreneurs, investors, researchers, policymakers and entrepreneurial support organizations, GEN works to fuel healthier start and scale ecosystems that create more jobs, educate individuals, accelerate innovation and strengthen economic growth. For more, visit www.genglobal.org and Follow GEN on Twitter.

ENDS

For interviews and further enquiries, please contact us:

Dinika Govender
Communications, Startup Genome
[email protected]

Jessica Wray Bradner

Communications, GEN
[email protected]

Suse Reynolds,

AANZ executive director
mob: 021 490 974 or email: [email protected]

Marcel van den Assum,

AANZ chair and 2015 Arch Angel
mob: 021 963 459 or email: [email protected]  

 

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Waiheke Angel Summit Reflections

The best things about this year’s angel summit…

The annual summit always reinforces why angel investment is my thing.

Angel investors are unapologetically optimistic, creative, generous and ambitious. And our community cares… to their bone marrow, those involved in early stage investment care! These people are ambitious for the success of the founders and ventures they are working with and they are genuinely ambitious for New Zealand.

Kiwi early stage investors want to see the incredibly cool stuff we do in New Zealand get out to the world, they want to help create fabulous jobs in New Zealand, they want to contribute to raising our living standards and to the creation of role models for our budding entrepreneurs.

I came away super-chuffed about the real pride in our New Zealand-ness which imbued this year’s event. It really feels like we are at the tipping point of cracking serious success. New Zealand innovators and founders are absolutely worth backing.

And guess what? At the same time as we begin to acknowledge the real value of being kiwi, we get a bunch of proof points that kiwi founders and innovation really does deliver. The ventures angel investors have been helping to scale are becoming more and more appealing to others. This year Apple bought PowerbyProxi, US-based Clarivate bought Publons and UK-based Oxford Metrics bought IMeasureU.

Key themes at the summit which will help us continue to amp up the appeal and success of angel backed companies include:
• genuinely put the founder first – be empathetic, be accessible and be truly aligned;
• start with the end in mind and work unrelentingly towards it – together;
• know what it’s going to take to achieve liquidity – deeply understand your capital strategy and potential acquirers;
• actively manage your portfolio; and
• at all times focus on adding value.

In a future post I want to dig deeper into how angels best support founders to deliver the dreams they have to change the world. But to augment the take-outs from this year’s event I’ve extracted couple of quotes and insights from some of our keynote speakers.

Ian Taylor – Animation Research Limited
• Bugger the boxing, pour the concrete anyway
• Well it wasn’t a failure… it just didn’t work

Deb Hall – New Zealand ‘angeling’
• By the end of 2006, NZVIF recorded 55 deals and $30m of investment. By the end of 2016 nearly 1000 deals have been done, with $484m invested in nearly 200 companies.
• Over half the angel community spend more than a day week mentoring and supporting founders.

Phil McCaw and Andy Hamilton – what’s next
• Phil – “I see a bright future. As a country and a world we are going through a process of massive social change. The capitalist model is going to reshape and be reborn”
• Andy – “New Zealand will be way better off, the more angels we have.”

Bruno Bordignon – term sheets
• Context is everything. Always ask ‘how does this term or will this term apply to me/the stage of my venture/the sector it’s in/the growth plan I have/the liquidity plan I have.

Justin Milano – exponential mindsets and the triangle of founder expansion
• Shift anxiety and the need to control uncontrollable outcomes to selfless service and generosity. How am I being asked to serve today? There is always something you can do to add value.
• Shift from beating yourself up to a growth mind-set. Be kind to yourself. It’s all about learning, growing and embracing challenges.
• Shift from a head space of “I am my company” [or investment] and free yourself from self- importance. Acknowledge you are not your company [or investment] and instead accept that “this mission is bigger than me” and adopt a sense of humility.

Ron Weissman – the importance of capital strategy
• Don’t ignore the boring stuff like capital models and capital risks. These are the key to success.
• Key capital risks include: capital inefficiency, no follow-on investors, misaligned investors, larger liquidation preference shares, management carve outs.
• Only 15% of angel backed companies achieve an exit of greater than $US50m.

Dan Bernstein – building exit value
• Mistakes made when ventures are being bought: having only one buyer, there is internal company conflict, poor due diligence preparation, poor qualification and management of buyers, ego, greed and arrogance, maximising profit and minimising growth.

Richard Dellabarca – managing your portfolio for returns
• A lack of exits is unsustainable for the ecosystem. Capital needs to be recycled.
• SCIF2.0 will focus on returns, opportunities with a global thesis, reserving capital for those getting traction, up to $1.5m for top performers (vs $500k under SCIF1.0).
• Since 1 July 2017, SCIF2.0 has approved 59% of deals presented, with a higher approval rate for follow on deals and declines being notified within 2 weeks.

Sam Stubbs – more capital is coming
• Kiwisaver is a $42bn saving pool which will grow to $200bn by 2030.
• Kiwisaver providers want to invest in early stage but are not currently being provided with the right products and mechanisms to be able to do so.
• Bigger follow-on cheques are coming.

Arama Kukutai – corporate venture capital
• Agtech activity has more than doubled by value and volume since 2014.
• US venture capital accounts for 47% of world-wide capital invested in agtech startups.
• In the agtech sector, corporate venturing and collaboration with VCs is becoming increasingly common and more sophisticated to generate win/win outcomes.

Randy Komisar – why do this? investment motivations and M.O
• Is this the deal, are these founders and is this cause… worth failing for?
• Investing in startups is about people and value creation, not about buying low and selling high.
• Don’t emulate any other place on the planet, do your thing. Protect and promote what you have as New Zealanders.
• If you can plot success for a company, it’s probably wrong or not worth doing.
• Fighting for crumbs on the table is no way to get cake – a reference to niggling over terms.

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Two New Angel Awards Announced

MIG Angels’ Dean Tilyard and PowerbyProxi recognised

In recognition of Angel Association New Zealand’s 10th Anniversary Summit two new awards have been announced to augment the Arch Angel Award which was first awarded in 2009 to Sir Stephen Tindall and yesterday awarded to Debra Hall.

The Puawaitanga Award recognises the founder and investor-director who best exemplify what can be achieved when committed people draw on their collective skills and experience. This award celebrates an angel-backed venture achieving world class success. This venture has excellent governance, a compelling business proposition and a well-defined strategy for exponential returns.

Puawaitanga – ‘best return on integrated goals’.

The Kotahitanga Award recognises those people in the angel community who have made an outstanding contribution to the industry. It acknowledges those who have selflessly given personal time and energy for a sustained period and contributed to the professionalism, profile and reputation of angel investment in New Zealand.

Kotahitanga – ‘unity and a shared sense of working together’.

The inaugural Puawaitanga Award has been presented to PowerbyProxi’s founder Fady Mishriki and investor-director, Movac partner David Beard. Movac were the first angel investors in the company after Fady and his business partner, Greg Cross founded the business in 2007 with the Icehouse becoming the first external shareholder joined in the following years by UniServices. Auckland-based IceAngels investors also contributed capital in later rounds alongside other investors including Evander Management. PowerbyProxi was recently acquired by Apple for an undisclosed sum.

In making the award, Angel Association Chair, Marcel van den Assum said Fady and Dave are shining examples of what great alignment can achieve.

“A consistent message in angel investment is the importance of founder and investor alignment. Both parties need to be committed to the same end-point.  This has clearly been the case with PowerbyProxi. From the outset, eight and a half years ago, both Fady and David were in sync on the end game; to generate stunning returns, financially for the investors and just as importantly for the New Zealand economy,” he said.

PowerbyProxi employs over 50 people and holds over 300 wireless charging related patents.

The first recipient of the Kotahitanga Award is MIG Angels founder, Dean Tilyard.

Dean founded MIG (Manawatu Investment Group) Angels in 2007. Since then the group has raised in excess of $20m for 19 technology based and largely agtech companies. Dean led the fund raising for two MIG Angels side-car funds, and oversees the investment committee to co-invest with MIG members. Dean was instrumental in the establishment of the Sprout Accelerator, which has 16 agtech alumni. Companies taking part in Sprout have gone on to triple their sales and raised $2m in funding. Dean was Treasurer of the Angel Association from its inception in 2008 until 2016.

“Dean is the kind of leader and influencer who has a tremendous impact on all those who work around him by leading powerfully and unobtrusively.”

“Dean has spent countless unpaid hours with founders and budding angels mentoring, encouraging and inspiring them all. He has also championed early stage investment to others on the periphery of angel investment; those whose support is vital to the successful growth of New Zealand’s startup ecosystem,” said Marcel.

–Ends–

For more information, please contact:

Suse Reynolds, AANZ executive director
mob: 021 490 974 or email: [email protected]

Marcel van den Assum, AANZ chair and 2015 Arch Angel
mob: 021 963 459 or email: [email protected]

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 30 members representing over 700 individual angels associated with New Zealand’s key angel networks and funds. Recent NZVIF data revealed angels have invested more than $NZ484m in over 928 deals and 296 companies in the last 10 years. AANZ works closely with NZTE and Callaghan Innovation and a number of private sector partners including NZX, First NZ Capital, PWC, Avid Legal, AJ Park, KiwiNet, Uniservices and Spark Ventures. For more, please visit: www.angelassociation.co.nz

 

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Debra Hall named New Zealand Arch Angel 2017

One of New Zealand’s most ardent angel investors, Debra Hall, has been awarded the Angel Association of New Zealand’s (AANZ) prestigious Arch Angel Award at the 10th Anniversary NZ Angel Summit on Waiheke Island.

The Arch Angel Award is the highest honour in New Zealand’s angel investment community, and recognises individuals who reflect the qualities of the best angel investors and who are champions for the endeavour.

The award recognises the significant amount of time and money angels contribute to startups and early-stage companies – and specifically to their founders and teams – to help them reach their potential while also recognising angels who make a significant difference to New Zealand’s startup ecosystem

Debra has made many investments in early-stage companies and been an investor director for a number of these ventures. She has held governance roles with Auckland-based IceAngels, the Angel Association itself and is currently an Advisory Board member for the first Chinese founded angel investment group, Zino Ventures. In 2015 Debra received IceAngels “William H Payne, Active Angel Award”.

AANZ Chair and 2015 Arch Angel recipient, Marcel van den Assum, says Debra imbues all the qualities of a top-notch angel.

“She is not only an active investor, contributing money and the deep expertise she has from scaling and selling her own market research company, but Debra also genuinely cares about the founders she backs, providing personal and practical advice which is a vital part of the more holistic role angel investors play,” he said.

Marcel, who worked with Debra during her time on the AANZ Council, said her contribution to the angel investment in New Zealand is marked.

“The passion and energy she brings is extraordinary, whether it’s developing and delivering a specialised course for aspiring directors of angel-backed companies, or on the boards of companies she’s backed, advising entrepreneurs, making deals happen by bringing people together or cajoling and gathering data on our community, Debra has made a very real impact and lifted the professionalism, profile and reputation of angel investment in New Zealand.”

Andy Hamilton, recipient of the 2011 award, has known Debra since she began angel investing in 2007 and said she had been a dedicated and invaluable member of IceAngels, renowned not just for her deal making capability but also for the lively dinners she and her husband Peter have hosted over the years for dozens of international visitors.

Interviewed in Startup Young Company Finance Report’s October 2016 edition, Debra noted that she and Peter had heard about IceAngels through a connection who knew Andy Hamilton and subsequently received an introduction to the group.

“In those days, from the outside, it looked to me like a secret society,” Debra said. She subsequently discovered that wasn’t the case – “all angels are very welcoming of new members and in fact eager to get new angels on board,” she said.

“Peter and I invest together and we only invest in companies we both agree on. We’ve taken small and big investments across a diverse range of companies – from technical manufacturing, to biotech, to software businesses.”

It was in this article that Debra set out why she is so passionate about the role good governance plays in the success of angel-backed companies.

“Governance is often seen as an inconvenience or intrusion by founders, however an effective board is actually critical to their success. With many of these companies, we’re dealing with a team that has never run a business before, so experienced directors are not just bringing classic governance to the table, they’re bringing their contacts, business experience and willingness to take on risks – often for minimal remuneration,” Debra pointed out.

Debra received her award at the 10th Anniversary NZ Angel Summit, held at Cable Bay Winery on Waiheke Island and attended by 150 delegates. The annual event provides a hub for angels to learn and network, and is recognised as one of the world’s top angel events.

South African born, Debra was that country’s first female metallurgical engineer. After immigrating to New Zealand, her career changed tack when she took on a job for a market research company that allowed her to work from home. She found a passion for the sector, leading her to establish the market research company Research Solutions in 1992. It grew into one of the country’s leading market research consultancies, and was sold to global market research giant, Synovate in 2007. She chaired the New Zealand Marketing Association for a number of years.

Former Arch Angel winners also include The Warehouse founder and long-time angel investor Stephen Tindall; Andy Hamilton, chief executive of The Icehouse and member of IceAngels; US super angel Bill Payne; veteran angel investor Dr Ray Thomson; prolific AngelHQ member, Trevor Dickinson and current AANZ Chair, Marcel van den Assum.

–Ends–

For more information, please contact:

Suse Reynolds, AANZ executive director
mob: 021 490 974 or email: [email protected]

 

Marcel van den Assum, AANZ chair and 2015 Arch Angel
mob: 021 963 459 or email: [email protected]

 

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 30 members representing over 700 individual angels associated with New Zealand’s key angel networks and funds. Recent NZVIF data revealed angels have invested more than $NZ484m in over 928 deals and 296 companies in the last 10 years. AANZ works closely with NZTE and Callaghan Innovation and a number of private sector partners including NZX, First NZ Capital, PWC, Avid Legal, AJ Park, KiwiNet, Uniservices and Spark Ventures. For more, please visit: www.angelassociation.co.nz

 

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2017 Angel Summit focuses on next 10 years

The tenth Annual New Zealand Angel Summit will be held at Cable Bay Winery – Waiheke Island from 1 – 3 November 2017. It’s theme; “Doubling down on success… the next ten years!”

New Zealand is now decade in to formal angel investing in New Zealand and has amassed some impressive statistics for a nation of our size. Over $500m into nearly 1000 deals in the more formal part of our market. Ten years ago there were 4 clubs and 100 or so angels. Today there are 10 clubs and over 650 angels. All this activity has delivered hundreds of jobs and tens of millions of revenue. It’s this value creation we want to continue to accelerate.

Ten years ago there were 4 clubs and 100 or so angels. Today there are 10 clubs and over 650 angels. All this activity has delivered hundreds of jobs and tens of millions of revenue. It’s this value creation we want to continue to accelerate.

The 10th Annual NZ Angel Summit is being held back where it all started at Cable Bay Winery on Waiheke Island. The choice of the small intimate venue continues the deliberate approach by the Angel Association to ensure it creates the right atmosphere for relaxed and informal conversations between active angel investors. The last two summits have sold out and it unapologetically prioritises attendance for those who are ‘doing deals’.

On the first morning the Summit will celebrate our community of investors and founders and their achievements in the past decade. There is so much to be proud of. The rest of the event will be spent digging into what we need to do to double down on our successes based on stories and insights from New Zealand’s heroes. International speakers, carefully vetted for their ability to both understand New Zealand’s unique circumstances and our aspiration for outcomes and success are flying in to present.

Showcasing Angel Investor Backed Ventures

The Showcase event which kicks off the event will include up to 10 venture in three tiers; seed, first formal round, last raise with a clear exit path. Each group of ventures will be introduced by an experienced angel investor who will talk about the investment opportunity, the return profile, valuations and potential acquirers.

New Zealand Investor Keynotes

Key Note sessions will include deep insight into what we can be proud of and what’s next. Stalwart investors will share memories of getting started – what was their vision and what inspired them, their challenges and what we need to do in the next decade to ensure value is delivered. These sessions will explore why our environment looked as it did 10 years ago, how far we’ve come and how we build on what we’ve created and set the vision for the next 10 years.

International Angel Investors

International special guests include Justin Milano (Good Startups, San Francisco, USA) who will explore the role of fear in the early-stage space. A veteran of Silicon Valley, Mr Milano has worked with angels and entrepreneurs to use cutting edge psychology and neuroscience, including emotional intelligence skills to help entrepreneurs and angels create break-throughs and unlock potential. Ron Wiessman (Band of Angels, San Francisco, US) will deliver a dose of reality exploring the critical the role of capital strategy and how tough it can be to source and entice an acquirers.

Actionable Insights

The extensive programme includes gritty content which covers; building strategic value, actively managing your portfolio for returns, Government’s role – identifying the right policy levers, the role of NZ corporate venture, and deep dives into term sheets – how have they have evolved and what role do they play in venture success lead by AANZ Expert Partner, Avid Legal’s Bruno Bordignon. Insight into which industries and technologies are going to irrevocably disrupt markets in the coming decades and make the best investment opportunities round out the valuable programme.

Finally, the event will also include the presentation of Arch Angel Award and two inaugural awards “Contribution to the industry” and “Lead angel and best venture award” – celebrating a great angel/founder collaboration.

To book your seat (preference is given to active angel investors) click here.

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Simon Brown: Entrepreneurs and investors descend on Hawke’s Bay

For two days last week the Black Barn Winery in Havelock North was the focus of the world’s venture capital and angel investor communities.
Entrepreneurs and investors from New Zealand, Canada, North America, China and Europe spent last Thursday and Friday at the 2016 NZ Angel Summit discussing investment strategies, sharing their expertise and creating opportunities for innovative Kiwi start-ups in need of early stage finance.
These were some of the most successful investors in their field. People like North American business and equity finance consultant Ross Finlay, who has come to New Zealand with the support of Callaghan Innovation to help local businesses understand what Angel Investors expect from them, to show them how to establish relevant relationships and introduce them to North American and NZ Angel networks.
Ross has secured 35 Angel investment deals in recent years and has assisted in the development and review of countless business plans for start-up companies.
He has extensive networks within the world of international finance and he knows how to leverage them for the greater economic good.
Hawkes Bay’s stunning environment was a bonus for local and international financial high flyers like Ross but they weren’t here primarily for the scenery. These were all seasoned and experienced business people who have made their money in a range of sectors.
Naturally, they’re looking for a return on their investment but they’re also motivated by a desire to help others with the same drive and ambition they have and, crucially, to do their bit to grow the New Zealand economy.
Government ministers and officials, colleagues from Callaghan Innovation and the nationally located business incubators also attended the summit.
They came away with re-enforced enthusiasm and confirmation of the optimism and dynamic evolution in this fast growing sector of our economy.
Last financial year was a record breaker in terms of deals made with Kiwi start-ups and dollars invested.
Deals worth a total of $61.2 million provided 92 creative and passionate New Zealand entrepreneurs with the kick start they needed to get their great idea off the ground. In addition to this investment, Callaghan Innovation supported 152 start-ups through incubators.
That’s an unprecedented deal flow and a strong indication that NZTE’s Investment Showcase events and Callaghan Innovation’s incubation funding and accelerator programmes are bearing fruit.
New Angel regional networks are forming. Syndicated Angel funds are proliferating and long standing networks are experiencing a surge of interest. Wellington’s Angel HQ, for example, has gained 30 new members in just the last six months.
Increasingly businesses are successfully exiting the start-up phase of their journey but still face challenges in accessing growth capital and appropriate commercialisation expertise. International capital exists but the New Zealand eco-system is looking at how it can work better together to facilitate the access to it.
We’re doing great but we can do better. Investment in research and development in New Zealand still lags behind OECD countries. Areas like SaaS, FinTech, AgriTech and other areas of the digital sectors are doing well but there are also great ideas brewing in MedTech, BioTech and food and beverage production.
A few of those could well be the disruptive industries we need to take New Zealand and the world into a healthier and wealthier future.
– Simon Brown is general manager accelerator services of Callaghan Innovation

First published – NZ Herald 6 November 2016

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Meet the Kiwi whiz kids running a $200 million education empire

WHILE other Gen Ys are still finding their feet, these Kiwi whiz kids are running a global company worth more than $205 million.

Jamie Beaton, 21 and Sharndré Kushor, 22, have just closed a $39.5 million capital raising for the global online education business they started on Facebook and Skype. And they’re looking to expand their reach even further.

It all started when a teenaged Mr Beaton, whois academically gifted, realised that there was not enough support out there for kids who wanted to get into the world’s top universities.

Read more

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Trevor Dickinson named New Zealand Arch Angel 2016

One of New Zealand’s most prolific angel investors, Trevor Dickinson, has been awarded the Angel Association of New Zealand’s (AANZ) prestigious Arch Angel Award at the 2016 NZ Angel Summit in Hawke’s Bay.

The Arch Angel Award is the highest honour in New Zealand’s angel investment community, and recognises individuals who have steadfastly championed the cause of angel investment and investors.

The award highlights the work of angel investors who give a significant amount of their time and money to help startups and early-stage companies – as well as their founders and teams – to reach their potential.

Read more

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Rocket Lab signs satellite company Spire as customer

New Zealand space company Rocket Lab has signed a deal with a United States satellite company.

Rocket Lab will send Spire satellites into orbit on up to 12 missions from late 2016 throughout 2017.

Spire uses small satellites to provide “high-fidelity” weather and ship tracking information.

Read more

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Creating our own Silicon Valley

There are so many components in successfully scaling great tech ventures. NZVIF’s Franceska Banga identifies a number of them in this article where she compares Silicon Valley with NZ. Essentially we all have a role to play!

Silicon Valley. Rightly or wrongly it’s the totem pole by which countries judge their transition to a more technology-based economy. But while many want to create the next Silicon Valley, replicating its confluence of factors is not easily done.

There are some features which helped create and continue to make Silicon Valley unique. It helps, for a start, having nearby two top universities – Stanford and Berkeley – with Stanford’s famed electrical engineering department especially important. So, too, does having huge pools of investment capital nearby.

But what might surprise many about this bastion of private enterprise is that it grew out of a long-term partnership with private enterprise supported by decades of US Government contracts and subsidies.

Its 60-plus years of growth has seen three technological waves.

Post World War II, federal Government money to develop new defence and aeronautical technology established the valley’s foundation and the first wave.

Darpa (Defence Advanced Research Projects Agency), created in 1958, is credited with playing a significant role in the development of the earliest version of the internet.

From that base came the second superconductor and PC wave of the 1970s and ’80s, followed by the internet, social and mobile media technological wave since the mid- 1990s.

The venture capital funds, which today underpin so much valley innovation, also enjoyed decades of Government support.

The Small Business Investment Act of 1958 established federal funding for US venture capital firms. In its first decade, the programme invested US$3 billion into young firms – over three times the amount invested by private venture capital funds.

The programme still exists and in 2013 it provided US$2.2 billion of funding investment. Many of the valley’s most dynamic tech companies – Apple, Compaq and Intel – have been backed by Government funds.

While our tech sector shouldn’t try to mimic Palo Alto – our market is very different – there are many reasons to believe we can build a credible and sustainable tech sector that is economically significant over the long-term. Over the past 15 years there has been significant progress in building New Zealand’s technology landscape.

The annual TIN100 survey shows that over the past eight years, revenues from New Zealand’s top 100 technology companies have jumped from $4.7 billion in 2006 to $7.6 billion in 2014.

While NZ has some catching up to do if we want to create a technology sector of significant economic scale, we are well on the way.

The TIN100 result backs up what we are seeing daily in the business news pages, with a stream of new technology companies becoming household names – alongside Fisher & Paykel Healthcare, Datacom and Trade Me are the likes of Xero, Orion Health, Wynyard Group, Rakon and Pacific Edge.

The innovation pipeline of the next generation of technology companies also looks very healthy.

New Zealand’s tech sector is being built through the application of innovation and technology across multiple sectors led by the software industry. There are many other sectors where unique technology solutions are being developed.

Healthcare integration, helicopters, paint, parking, apples, animal health, surgical dressings and cystic fibrosis are examples where local innovation is leading the world.

There is no single factor driving this innovation. The role of successful private sector leaders and entrepreneurs is crucial. But so, too, is the support from the Government, from establishing Callaghan Innovation, developing business incubators, encouraging more R&D, commercialising more university research and strengthening our capital markets.

We know it takes a long time to develop a sustainable venture capital sector – the Valley’s VC sector took 40 years to develop. And while our VC market is likely to remain boutique, servicing local start-ups as they grow, their role is critical in filling the $2 million-$10 million funding gap – beyond crowdfunding and angel investors, before traditional capital markets.

We may never rival the US but we need to ensure our VC sector reaches a critical mass to meet the needs of New Zealand’s growing tech sector.

Since its establishment as a Government-owned and funded company, NZVIF has partnered with 10 venture capital funds. Alongside its fund partners, NZVIF has invested into some of New Zealand’s most promising growth companies – including Orion Health, Xero and PowerbyProxi.

For every dollar invested by the Government through NZVIF, there must be at least 1:1 matching investment from private investors. The public/private sector investment leverage runs significantly above that. To date, a total of $1.1 billion has been raised for NZVIF VC-funded companies of which NZVIF’s contribution is $100 million.

Overall the VC fund has returned 5.6 per cent per annum. Post-GFC, VC fund investments are showing returns of 26 per cent per annum.

New Zealand has made significant progress over the past two decades and the results can be seen in the array of emerging technology companies with good growth prospects. If every year we have two to three VC funds investing across 10 companies in the $2 million-$10 million funding gap, the impact could be significant.

Building a vibrant early stage investment ecosystem is not an insignificant goal. Look at the countries which have succeeded – the US, Israel, Finland and Singapore. In all, government support behind private sector endeavour has been instrumental.

Franceska Banga is chief executive of the NZ Venture Investment Fund

First published NZHerald 26 March 2015

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Hawkes Bay economy gets major blast from new food facility

The power of angel investment. Enterprise Angel backed Rockit Apples creating jobs in the Hawkes Bay. And a cry for angels in that region too!

The global success of Rockit™ apples has led to a $17 million investment into land development and a state-of-the-art food packaging facility in Havelock North.

Minister for Economic Development, Hon. Steven Joyce officially opened the multi-million dollar food facility today (Wednesday).

Havelock North Fruit Company managing director Phil Alison said world-wide consumer demand, which is up 700 percent from 2013, has proved a fruit such as an apple can be marketed as “a premium snack food and compete against sugar-coated confectionary.”

Read more on www.scoop.co.nz

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Bullish claims excite angel investors

This story profiles the role experienced angel investor, Susan Iorns has had in the journey and growth of one of the first Lightning Lab graduates, Expander.

Making a compelling pitch to investors isn’t easy, but Ollie Langridge’s bold claims attracted considerable interest from investors before he even had a product, let alone started marketing it.

The former TV commercial director first addressed potential investors a couple of years ago at Wellington’s startup accelerator Lightning Lab’s demo day. He told them he and business partner Paula Nightingale had an idea that could potentially prevent infant deaths, like those caused by the Chinese melamine scandal.

This bold claim related to the technology they would eventually develop, based on QR codes (abbreviated from Quick Response Code, a two dimensional matrix-like barcode) which could mark products with unique codes like a fingerprint.

Consumers can easily scan this code with their smartphones to check a product is authentic and safe – an option that is in increasing demand given the increase in food safety incidents and resulting tragedies such as the infant deaths in China caused by contaminated milk powder.

Langridge’s claims were enough to whet the appetite of a number of early stage angel investors present at the demo day, including Wellington-based Susan Iorns, who together with other members of Wellington’s angel group, Angel HQ, and the NZ Venture Investment Fund, invested $500,000 to develop Langridge’s Green Codes cloud-based technology under the company name Expander.

Iorns was so impressed she even became chair of the fledgling company. “I look for a couple of things when I’m considering investing in a company – whether the company is likely to create high-skilled jobs in New Zealand and whether it is likely to succeed abroad,” Iorns said.

“Expander’s technology was both scalable and I didn’t see any geographic boundaries. Ollie’s pitch was also a great and worthy call to action.”

A subsequent, oversubscribed capital-raising round last year secured even more funding to help accelerate Expander’s market overseas, says chief executive Erwin Versleijen, who joined the company early last year.

Versleijen formerly worked in mergers and acquisitions with PwC and commercialised products for Minolta, Samsung and BMC Software. He says he saw Expander’s potential from his first introduction.

“It’s a startup in the right space, so it’s likely to be a leader in its field,” Versleijen said.

The anti-counterfeit and brand protection market is expected to grow from US$3.4 billion today and the traceability technology market is expected to be US$14 billion by 2020.

Consumers are demanding more and more information about the origin of products before they buy, he says. “With ever increasing competition for market share, traditional media and sales techniques simply aren’t enough anymore.”

You don’t often see New Zealand shoppers using their smartphones to scan products but it is common in Southeast Asia, with most smartphones owners in China using QR code readers daily, Versleijen says.

When consumers scan Expander’s QR codes on a food or beverage product they are directed to a mobile landing page where they see where the product came from and who made it, nutritional facts and allergy information, and how to get in touch.

Consumers can also register to receive more information like recipes and accept invitations to social media.

For companies, this technology allows them to increase loyalty and brand equity, and get valuable data on where and how consumers are buying their products, Versleijen says.

Expander’s QR technology differs from the competition because its QR codes are randomly generated and not reliant on a legacy system, he says.

“Consumers can scan the codes from any reader on their smartphone. There is no dedicated application to download or training required.”

This year Expander is targeting the global dairy industry.

Exporters of infant milk formula and fresh milk to China need to have unique identifiers, such as a QR code for traceability on each package and a recall process to meet regulatory requirements.

Expander has cracked the QR code, now it’s ready to crack the international market, Versleijen says.

First published in NZHerald 12 March 2015

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SmartShow app to enhance CeBIT

CeBIT, Australasia’s largest technology expo – taking place 05 – 07 May 2015 at Sydney Olympic Park – has contracted New Zealand-based SmartShow to provide its event apps via flagship product ShowGizmo.

“We’ve had event apps in previous years, but mobile technology is constantly evolving and the ShowGizmo app is an international market leader with an impressive feature set,” said Jan-Peter Lauchart, chief operating officer of Deutsche Messe, organisers of CeBIT Australia.

Read more on www.impactpub.com.au

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More wonderful validation for angel-backed ShowGizmo rocking the event app space

A Wellington company’s “virtual goody bag” will be part of the actual goody bag at Australasia’s largest technology expo in May this year.

With more than 20,000 visitors from 30 countries expected to attend CeBIT in Sydney, SmartShow is gearing up for the next phase of expansion.

Read more

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Giant accolade for miniature apple developers

Another angel backed venture gets international recognition for innovation. Rocket apples are now being sold in over half a dozen international markets. Doing exactly what angel ventures should do! Congrats to Enterprise Angels investors.

The Rockit apple, an export success largely funded by Tauranga Enterprise Angels investors, has scored an international award.

It won the New Zealand-Taiwan Business Excellence Award in Taipei last week.

Phil Alison, managing director of Hawkes Bay-based Havelock North Fruit Company (HNFC), which grows and markets the Rockit, attended the Australian and New Zealand Chamber of Commerce Business Excellence Awards.

Board members Steve Saunders, Murray Denyer and Rob Craig were also present.

“This is a fantastic achievement for us, as we continue to grow our global markets,” said Mr Alison.

The Rockit apple is a miniature apple – slightly bigger than a golf ball, which was created in Hawke’s Bay. It is uniquely marketed in a branded clear plastic tube aimed at the high-end convenience food market.

The awards recognise Australian, New Zealand and Taiwanese companies that have made a significant contribution to the bilateral business relationships among the three countries. The judges noted HNFC’s innovation in positioning Rockit as a premium brand snack food and its outstanding 700 per cent year-on-year growth.

“It is nice to get recognition along the way, as it is hard work establishing a truly global brand,” said Mr Alison.

Mr Saunders, who heads Tauranga-based Plus Group, said the award reinforced the importance of strong international relationships.

“We were particularly proud to celebrate this event with our Taiwanese partners.

“It was also great to see a company which has been backed by Tauranga investors through Enterprise Angels been recognised internationally.”

The fruit is now being sold domestically and in the US, Canada, Italy, Hong Kong, Taiwan and the UK, with more international markets being opened up as new production comes on stream.

HNFC worked with Plant and Food Research and Hawke’s Bay company Prevar, to develop the apple.

The company has 79ha under cultivation with a further 55ha planned.

“We’re growing the apple to bigger production levels,” said Mr Alison.

First published on nzherald.co.nz on 2 December 2014

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Angels help skincare pioneer fly

Early investment allowing Zeosoft to prove product claims has helped secure backing for international leap.

Patience and a lot of persistence have paid off for natural skin cleaning company Zeosoft after it gained significant backing from the Bay of Plenty’s Enterprise Angels and early stage investment group Movac.

Soft zeolites, formed from volcanic activity and mined near Tokoroa are the key ingredient of Zeosoft’s products.

“It’s a very unique ingredient. And we’re the first to patent its use on skin,” said Zeosoft chief executive Phil Connolly. “Thanks to our initial investment from Movac we’ve now got independent proof of the power of soft zeolites to remove contaminants, including heavy metals and toxins, and help repair skin, while still being soft and dermatologically safe.”

Movac first invested in Zeosoft in 2010 to help the company’s founders prove the power of their innovative skin-cleaning ingredient. It was this research that helped seal the deal for the Bay of Plenty angel investors, says Movac’s Mark Vivian.

Zeosoft raised $8 million in this latest funding round and plans to use the capital to fast-track its way into international markets.

It currently manufactures heavy-duty hand soap, everyday handwash and household cleaners, with personal care, cosmetics and derma product on the cards. Its initial targets are the automotive and engineering industries in Britain, Europe and the Middle East.

To try to speed its way it has joined forces with global leaders Unilever and Stevenson’s Group for product formulation and development.

“Nutting out these relationships is key for us. Everything’s on a completely different scale in the UK, so any mistake is accentuated,” Connolly said.

Vivian said he had high hopes for Zeosoft.

“They’re making excellent progress in the UK market where there’s growing consideration among industrial organisations about the impact products have on their employees, customers and the environment.”

Strong relationships between New Zealand’s angels and early-stage investment companies like Movac were crucial for ensuring Kiwi companies got enough funding to grow, Vivian said. “There are always going to be natural ups, downs, surprises and successes that go with being invested in any early-stage company, but the more experienced people the business is able to surround itself with, the better.”

Enterprise Angels executive director Bill Murphy agreed: “What Zeosoft highlights is there is an increasingly strong early-stage investment network in New Zealand where deals, due diligence and investing are often shared.

“This leads to more capital and more opportunities for promising young companies.”

Produced in conjunction with the Angel Association of New Zealand.

First published on nzherald.co.nz 17 July 2014

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Investment leads to solving dairying dilemma with data

Software gives farmers a simple tool to help keep waterways clean.

Wellington agritech firm ReGen is helping dairy farmers manage a key issue – disposing of the effluent that cows produce.

The company’s ReGen Effluent system uses on-farm hardware that constantly measures soil moisture, soil temperature and rainfall, then transmits that data to ReGen’s servers, where it is processed by the company’s software.

On-farm systems that record such measurements aren’t new, but ReGen’s innovation lies in its software, which turns the data into a simple daily recommendation. This is sent to the farmer by text message, instructing them either to irrigate effluent out on to their farm, or not.

It’s an important daily decision for farmers, says Bridgit Hawkins, ReGen’s chief executive. “Irrigate effluent on to ground that’s too wet, for example, and it can either run off the surface or flow straight through the soil; either way, potentially ending up in waterways.”

There are tools that allow farmers to check via their computers how much rain they’ve had or what their soil moisture is, but the farmer is still left asking “what does that mean for me on my farm for this particular activity today?”, says Hawkins.

“That’s what we feel is really innovative about us, because generating that recommendation is quite a hard thing to do. It’s easy to display some data on a graph, but much harder to decipher what that means, relative to the key activities on a farm.”

ReGen has customers around New Zealand, but is particularly focused on Southland, where the regional council is relatively prescriptive in terms of how farmers manage effluent, says Hawkins.

“Our customers tend to be early adopters of technology, but we’re now starting to see the next wave of ‘fast followers’ come on board. There’s increasing regulatory pressure on farmers to address environmental issues related to a number of different farm activities, and that’s leading to further opportunities for the company.”

ReGen is also developing a service related to water irrigation, and this year launched a product to help farmers make decisions on the use of nitrogen fertilisers for grass growth.

“Again, there’s a real environmental benefit from using the nitrogen tool, because every time a farmer applies nitrogen and it’s not used to grow grass it ultimately ends up being leached,” says Hawkins. “That’s wasted money for farmers in terms of the cost of the fertiliser, but it’s also a part of how nitrogen ends up in waterways.”

ReGen was formed in 2010, but the genesis of its technology stretches back to 2006, when Hawkins was leading the rural development programme at data science firm Harmonic, and doing some work with researchers at Massey University.

One of the researchers’ areas of interest was deferred irrigation – delaying irrigating out effluent until conditions are right. Mixing that with Harmonic’s data-science focus sparked the ReGen Effluent concept, which was subsequently backed by other industry partners and government R&D support.

In 2011 the firm also attracted interest from New Zealand’s angel investment community, led by life-science/clean-tech investors and venture developers Pacific Channel and the Wellington-based angel investment group Angel HQ.

It was novice angel investor Paul Waddington’s first angel investment and he says several things piqued his interest in the company: Hawkins’ track record in the agricultural sector; the relatively large domestic opportunity for the technology; and its offshore potential.

“The other major attraction with ReGen is it’s a decision-support tool,” says Waddington. “It’s doing more than just gathering and displaying data; it’s actually making recommendations, which is the future in terms of technology, particularly with the advent of big data.”

Produced in conjunction with the Angel Association of New Zealand.

First published in the New Zealand Herald on Friday July 4 2014

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Investment success story keeps staff in New Zealand

Microsoft has bought a Wellington cloud computing business that can trace its origin to the Lord of the Rings movies.

The software giant has snapped up GreenButton, which has 18 staff, for an undisclosed amount. Microsoft would keep all of GreenButton’s operations in New Zealand and all staff would be retained.

GreenButton, whose clients include the National Aeronautics and Space Administration, Boeing and animated-movie producer Pixar, will be added to the Microsoft Azure cloud computing platform.

Using GreenButton’s solutions, applications can be cloud-enabled quickly without recoding existing software – and without a PhD in computer science.

Investment in GreenButton came from the government’s Venture Investment Fund, Movac founder Phil McCaw, and Datacom founder John Holdsworth. Former Sun Microsystems executive Mark Canepa is a shareholder and sits alongside Mr van den Assum and chief executive Scott Houston – once head of technology at Weta Digital – on the board of directors. Microsoft had not acquired any equity in GreenButton as part of its deal.

Read more from Stuff.co.nz

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Angel investee has sound impact on literacy

Launched by New Zealand company Booktrack, the education tool Booktrack Classroom sychronises audio with text, and gives students and teachers free access to hundreds of soundtracked e-books, from famous classics to contemporary titles. Students can also create Booktracks for their own writing, and create a soundtrack from over 20 000 professional-quality audio files, and share it with their classmates.

Booktrack Classroom has multiple uses across Years 1-13 in the reading and writing curriculum, and can be used for creative writing, essay writing, literature study and reading aloud.

As Booktrack expands into the education sector, it builds on a recent successful fundraising round where it secured US$3 million in local and offshore investors, led by Sparkbox Ventures. The funding enables Booktrack to build on its recent growth with Booktrack Studio, where self-published writers are able to add soundtracks to their own ebooks. Launched in September 2013, Booktrack Studio has attracted 300 000 users, who have created more than 3600 Booktracks in 30 different languages.

Read more from TechDay

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Startup Standouts – Cloud Cannon & Common Ledger

As an investor there’s nothing to stop you from keeping an eye on some of the bright young things coming through. Of nine startups that pitched at Wellington’s Lightening Lab Demo Day, two really stood out reports Yahoo NZ’s business desk.

Common Ledger. The startup has developed a platform letting accountants integrate different accounting software. That might make your eyes glass-over, but if you’re a small business owner, it means you can run your old MYOB accounts in your accountant’s flash new Xero system, without having to copy and paste.

They were looking to raise $550,000 and had attracted half of that in commitments before pitching, which would go to completing a major deal with one of the big four accounting firms, and help pay for their sales and distribution.

Cloud Cannon. These two youngsters have a startup which has developed a platform to make it easier for freelance web developers to create and host websites.

If you don’t hang around any web or design geeks, you probably won’t know the frustration they typically go through to send and upload their final design for a customer. Essentially it’s eight hours of pain-staking graft at the end of what’s already been an arduous process.

Cloud Cannon’s idea was to use Dropbox to cut that time to seconds, in what becomes a drag and drop process.

It’s a simple idea, but also one that would win over the scores of freelance web designers out there if they can get their product down-pat.

Read more from Yahoo NZ Business & Finance News

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NZ Technology aims high with business software, not social

Tags: technology

Reuters reports that New Zealand technology firms are rolling into global markets, selling software to businesses that locks down mundane tasks like accounting and expenses, rather than developing slick social media apps that consumers download free of charge.

Led by Wellington-based Xero Ltd and its self-styled “beautiful accounting software”, the South Pacific island nation’s blossoming cloud-based tech industry is now the country’s third-biggest export earner behind dairy and tourism.

The practical New Zealand approach diverges from the mass consumer offerings developed by some counterparts in the United States, like messaging service WhatsApp or photo sharing site Instagram. 

Read more from Reuters

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Lasers solve dairy sperm problem

The director of the University of Auckland’s Photon Factory, a high-tech laser research hub, was more interested in ultrafast lasers when she first met angel investors from tech investment firm Pacific Channel.

“They basically told me there were five big problems facing our dairy industry and asked if I could help with any of them,” says Simpson.

“I didn’t know anything about sperm sorting when I met them. I didn’t even know it was a problem. But that was the challenge that seemed most amenable to a physical, rather than a biological solution.”

It took three years, but Simpson and her team have gone from neophytes to solving one of agriculture’s most nagging problems. Their research – conducted under a new spinoff company, Engender Technologies, has led to a provisional patent on a technology that should be able to sort sperm cells by sex, quickly, inexpensively and without any loss of function.

The only currently available sex sorting method, flow cytometry, uses an electric field to separate male and female sperm in the field.

However, the stress of the process often results in underperforming sperm, thus negating the benefits of sex selection.

Engender’s technology is a direct result of The Photon Factory team’s deep knowledge of photonics – the study and use of light for energy – and what lasers can do when they flash in short, extremely rapid bursts.

The factory’s $1.7 million high-tech laser research equipment includes a femtosecond laser that can emit light pulses lasting in the order of millionths of a billionth of a second.

Engender was formed with co-funding from the University of Auckland’s technology commercialisation arm, UniServices, and Pacific Channel.

Pacific Channel managing director Brent Ogilvie says he and his colleagues originally approached Simpson with their “five problems” because of her reputation.

“The key to early-stage investing is listening carefully to markets and backing talent.

“There are pockets of genius all about the country, so you can’t be too prescriptive about picking sectors, but clearly dairy is something we do very well.”

Ogilvie says the trillion dollar livestock market is dominated by eight or nine artificial breeding providers worldwide.

Pacific Channel provides a bridge between New Zealand’s “world-class science” and the realisation of commercial value, he says.

“What we’re doing is applying our problem analysis abilities and the ability of clever people to do cutting edge research in their own area of expertise at the same time,” says Simpson.

“There is no doubt that advanced, high-tech science and engineering can add power to the New Zealand economy. We find it very rewarding to be part of that effort.”

Produced in conjunction with the Angel Association of New Zealand.

First published in the New Zealand Herald on Thursday March 20 2014

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Algae find sets firm on road to success

It makes salmon and cooked shellfish red. It’s in demand from marathon runners, performance athletes and the sports recovery market as a food supplement and its antioxidant qualities mean it may be beneficial in treating cardiovascular, immune and neurodegenerative diseases.

Auckland businessman and angel (or early stage company) investor Ray Thomson also stumbled across astaxanthin and Dowd’s fledgling astaxanthin company Supreme Biotech while at the Natural Products Conference in Nelson in 2010.

Traditionally New Zealand angel investors have been reticent about biotech but the sector’s image has been boosted recently by the outstanding performance of cancer diagnostics company Pacific Edge, says Thomson, who’s also chairman of the NZ Angel Association.

With revenue now at about $1 million a year, Thomson predicts Supreme Biotech is about six months away from breaking even and unlikely to need another angel funding round.

Angel investing is fundamental to New Zealand’s future wealth, says Thomson, and using the knowledge and experience of successful executives to mentor early-stage entrepreneurs as angels do is crucial in whether a new company succeeds or not. “[It] isn’t just about money. It’s about giving these entrepreneurs some real leadership and help along the way, that’s why it’s so exciting.”

Full story first published in the New Zealand Herald on Thursday February 13 2014

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Fuel50’s US expansion with Ice Angels support

An Auckland company whose software helps businesses and workers communicate about career development plans to expand into America and open an office in San Francisco with help from the Ice Angels investment network.

Career Engagement Group’s cloud-based software, Fuel50, is used by about 40 organisations worldwide and locally, including Westpac, Frucor, Zed, Fisher & Paykel Finance, and Fonterra.

The software is designed to help workers with career development within an organisation.

The company was launched two years ago and had five staff at the end of December but expected to double in size by March, Fulton said.

It has recently secured more than $1 million of funding from the Ice Angels investment network and plans to open an office in San Francisco early this year.

Full story first published in New Zealand Herald Thursday Janaury 30 2014

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IndieReign – something really clever

Independent film distribution company IndieReign began life as Reel Clever, a basket of online tools designed to help film-makers connect and market their wares within the industry. But after talking to customers, founder and chief executive David White realised the real pain in the industry was distribution.

Enter IndieReign, an online distribution platform that taps festival films and delivers them to your living room.

White and his team, and Phil McCaw of angel investment company Movac, have invested $300,000 of their own money developing the company’s technology, building initial networks and testing the concept.

White has already secured three-quarters of the funding he was seeking after, very unexpectedly, signing up three Silicon Valley investors while he was tying down a San Francisco film festival deal. He met the investors through both McCaw’s connections and the Government-backed Kiwi Landing Pad in San Francisco.

Full story first published in the New Zealand Herald on Friday November 23 2012

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Angel investment in two firms backs new particle analysis technology

The technology aims to make it easier and quicker to test and treat animals in the field. Photo / Tania Webb

Greg Mirams’ initial foray into the investment world didn’t go so well. The founder of animal parasite diagnostics company Techion Group was no stranger to capital raising, having set up, sold and bought back Techion. But when he tried to get investment for a new technology that could transform his business he was left out in the cold despite an intensive six-month courtship.

“It was crushing,” he says.

Mirams was seeking $300,000 for Menixis, a start-up company he co-founded with nano-scientist and director of Otago University’s applied science programme Stephen Sowerby.

Menixis holds the intellectual property to a new particle analysis technology developed over more than two years by Sowerby and Mirams. It could transform particle analysis in the field, replacing the need for microscopes or the skills to use microscopes to accurately identify and count particles, such as the number and type of parasitic eggs in a sample of animal faecal matter.

Mirams developed the technology to update Techion’s internationally popular parasitic diagnostic tool Fecpak to make it easier and quicker for farmers to test and treat their animals in the field.

It will also bolster Techion’s revenue by increasing its own monitoring and advisory capacities.

To Mirams the whole deal was a no-brainer. Why wouldn’t you invest in a new technology that already had a customer not only willing but keen to sell it to its significant local and international customer base, built up over more than 20 years?

Fortunately Mirams had been introduced to angel investor Bill Murphy, who decided to champion Mirams’ cause in his Bay of Plenty Enterprise Angel group.

“I just passionately believed we shouldn’t let this opportunity to invest in some significant new primary industry technology pass us by,” says Murphy.

Mirams pitched again, but was thrown when told the Angels liked the product, but wanted to roll Menixis’ technology into Techion and then invest in Techion. “We wanted to secure the connect between the IP and the market,” explains Murphy.

But that didn’t work for Mirams.

He argued that first, Techion had multiple business activities, complex operations and an established shareholder structure; second, Menixis co-founders Sowerby and Otago Innovation would end up with a relatively small shareholding in Techion, which wouldn’t give them as much incentive to continue to develop the technology; and third, the technology itself had far more potential than just animal parasitology (Techion’s focus).

“There are potential applications for this technology in the area of microscopic analysis of any small particle including algal blooms, pollen analysis and in the petrochemical and forensic evidence industries, none of which I know anything about, so Techion just isn’t the right vehicle for that. There’s also this massive opportunity for improving the speed of human parasite diagnostics.”

Murphy and his 13 co-investors at Enterprise Angels agreed and a novel deal was struck to invest in both Menixis and Techion to give Mirams the capital he needed to turn the technology into a commercially saleable product.

Mirams and Murphy say this deal could have implications for investors and companies. Both get the security of investing in growing existing revenue streams, plus the upside of investing in new and potentially even bigger revenue streams.

“My hope is this deal becomes a kind of blueprint for a new New Zealand growth model,” says Mirams.

Produced in conjunction with Angel Association of New Zealand

First published in the New Zealand Thursday November 21 2013

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Firm uses cell network, cloud for surveillance work

Imagine you’re charged with managing a number of rural properties from a distance. Private landfill sites or parks and forestry land, for example. How would you protect against fly-tippers (illegal dumping), vandals or arsonists?

Video surveillance is expensive and technically difficult, especially when your locations are far from your base. Transferring your surveillance footage from one place to another needs a high-capacity broadband connection, which isn’t available in many remote locations.

Husband and wife entrepreneurs Helen and Scott Wattie founded their business Mi5 Security with business partner and director Nick Mooyman and decided to target this untapped potential market.

“Technology’s solving a problem where once only a human response was possible,” Helen says.

Mi5 uses the cellular network and its proprietary cloud computing platform, iDefigo, to keep tabs on remote locations.

This simplifies surveillance and monitoring of remote environments, even where power and Wi-Fi aren’t readily available.

Surveillance footage can be transferred using only modest amounts of bandwidth.

The business is based on four interwoven revenue streams – video surveillance as a service subscription via the cloud, mobile data services, platform licensing fees and hardware sales.

But the Watties soon realised having a product on the market and their business processes and structures in place weren’t enough if they wanted to develop the business quickly. They approached angel investor and entrepreneur Scott Gilmour for advice on raising capital to fuel their expansion plans.

They’d first met Gilmour through the Software Association. Initially, it was not their intention for him to invest in the business – they simply wanted his advice on where to look for investment, says Helen.

“Scott quickly introduced us to the possibility of gaining angel investment at a critical growth stage of our business.”

Gilmour, meanwhile, was an established angel investor, having worked at Intel for more than 12 years and was founder of the “I have a Dream” charitable trust in ths country.

Mi5 security was an interesting-sounding investment opportunity, he says, but he was initially more attracted by the founders’ commitment to the company.

“I got to know them and the company and I just thought they were good people, which is my prime requirement for getting involved.”

Gilmour is a founding member of the Ice Angels, the largest group of angel investors with more than 100 members. With a decade of Ice Angels experience, as well as seven years on the advisory board of Trade and Enterprise’s Beachheads Initiative (which connects companies to a network of private sector advisers), Gilmour says between 30 and 40 companies present their business plans to him every year, but few grab his attention like Mi5 did.

Gilmour became chairman of Mi5 Security in July last year and has since raised more than $1 million in two finance rounds, helping pave the way for the company’s expansion into Britain.

From their earliest discussions Gilmour understood Mi5’s proposition, Helen says, and having such a good and committed chairman has been instrumental in helping the company to grow quickly.

“Without Scott as the communication gateway between ourselves and our investors, we’d find ourselves crippled by paperwork and frustrated by the time spent educating people on our business and justifying our decisions.”

Like many high-tech start-ups Mi5 isn’t profitable yet as it’s reinvesting for growth, but it already has many customers here and in Australia and channel partners, as well as a growing UK and mainland European presence.

But it faces the same challenges all Kiwi tech companies do, says Gilmour: access to capital, management capabilities and distance from market. So the Watties are now based in London.

Produced in conjunction with the Angel Association of New Zealand.

First published in New Zealand Herald on Thursday November 7 2013

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Rehab firm needs more to take the next step

Elliott Kernohan, chief executive of rehabilitation technology company IM-Able, embarked on a $1.25 million capital raising round at the 2012 Angel Association of New Zealand Summit in Wellington.

Before the summit he’d had $640,000 pledged from Cure Kids Ventures, which is interested in the company’s technology for children with cerebral palsy, so the end was in sight. But no end came.

The company managed to attract only another $200,000. Not enough to close the round, take the money and put it to work, says Kernohan. “we’ve moved away from the angel networks to focus on investors who have experience in the healthcare sector. So the conversations we’ve been having have been a lot more successful.”

Kernohan echoes Polybatics head Tracy Thompson when he says capital raising is difficult in New Zealand for budding healthcare companies. He also suspects IM-Able (pronounced “I’m able”) was a little too far down the track for angel investors, requiring perhaps a little too much money for their comfort. The trouble is, to take these projects any further requires capital, says Kernohan. The grand scheme to translate its technology to the web, to give clinicians the ability to develop large-scale rehabilitation programmes for stroke victims and others who suffer from neurological problems, is also on hold until the round closes.

First published in the New Zealand Herald on Friday October 11 2013

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Bread man uses his loaf to beat crate conundrum

Steve Haythorne says his Mobot can save firms thousands.

In his past life as a supply chain manager, entrepreneur Steve Haythorne would send 30,000 loaves of bread from Auckland to Whangarei each night. But he noticed a problem – each of the three trucks it took to do the job was only 60 per cent full.

Haythorne’s conundrum stemmed from a baking industry convention: standard loaf crates were stacked in piles of 12 or 13, which was as high as they could be stacked to allow the delivery guys to heft them around on a handbarrow and reach the top to unload.

The stacks were too low to fill up the trucks, but still heavy and dangerous, Haythorne said.

“It’s a very labour-intensive job that involves a lot of man-handling as well as creating a dangerous environment … I thought there has to be a better way.”

After searching for some handling machinery that could do the job better drew a blank, Haythorne set about creating his own.

The result is Mobot – an all-electric, stand-on, zero-turn device designed to move items that are too small for forklifts but too heavy to be safely moved by the ubiquitous handbarrow.

A Mobot is manoeuvrable enough to work within the confines of a delivery truck.

It is capable of lifting a stack of 10 crates and then putting another 10 on top, so it can fill a delivery truck to its full height, Haythorne said.

“That results in a massive financial payback. A Mobot could save that Whangarei bread run $700,000 annually, because it can now be made by two trucks instead of three.”

The machines will also vastly improve health and safety conditions, increasing workplace productivity and reducing ACC costs, he said.

After receiving some early expressions of interest in a concept vehicle he built more than 18 months ago from his then-employer, Goodman Fielder, as well as Fonterra and bread maker Tip Top, Haythorne quit his job to work full-time on his new company, Mobotech.

“I sold my house, all my shares and went into hock on everything and just poured it all into getting a prototype vehicle together.”

A year ago Haythorne showed that prototype to the guys at angel investment firm Sparkbox Ventures. They liked what they saw and invested seed capital of $200,000 from the Global from Day One fund – a joint venture between Sparkbox and Auckland business incubator The Icehouse, with half the funding matched from the Government’s New Zealand Venture Investment Fund.

A further boost was given to the fledgling company with a $112,000 grant from Callaghan Innovation.

Sparkbox venture principal Mark Robotham said Mobots had great market potential.

“The niche market in the bread and milk sectors is enough to make the business very successful, but there are other opportunities to extend it to wider markets,” he said.

“What we’re trying to do with companies like this is get engaged very early on to ensure they reach global markets as quick as they possibly can … it’s all based on the rationale of grow fast [or] fail fast.”

Haythorne has used his seed funding to create a final prototype, which he plans to show at a world baking expo in Las Vegas this month.

He’s also about to embark on a second investment round to help fund Mobot’s manufacture and initiate sales in the US. Already having a track record with funders will make that process a lot easier, he said.

“I’m just very appreciative that the angels elected to get in behind the idea because it never would have gone anywhere without them.”

Produced in association with the Angel Association of New Zealand.

First published in the Herald on Thursday October 10 2013

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Avocado processor eyes bright future

Avocado-processing company, Vocado, with it’s innovative product has been drawn to Tauranga to be closer to investors and business advisers.

Vocado uses an innovative processing and packaging technique to produce easy-to-use and long-living avocado pulp products.

The company this year received a significant investment from Bay of Plenty angel investment group Enterprise Angels to help it relocate its manufacturing facility from Taneatua in the eastern Bay of Plenty to a new factory in Judea.

Twelve Enterprise Angels investors put $335,000 in Vocado, while a matching investment of $250,000 by the Government’s Seed Co-Investment Fund brought the total investment to $585,000.

In addition to the new money, the Enterprise Angels deal has connected Vocado with key players in the avocado industry who will help the company with supply and export challenges.

Vocado managing director Colin Elder said the move gave the company the capacity to expand, and allowed easy access to new investors and advisers.

“We needed some depth of experience and we’ve got that now so I’m absolutely delighted with the people we’ve picked up and who have supported us in this investment.”

Vocado uses a production process which aims to get the avocado pulp into an oxygen-free environment as soon as possible so that the fruit doesn’t brown. The pulp is then packaged in resealable, plastic pouches to keep it fresh and sold to commercial users such as Hell Pizza and Pita Pit.

“We purposely targeted franchises that were already using avocado and we’re taking over from imported products, we’re not competing directly with any New Zealand supplied products and that’s intentional on our part because it’s a small market and we want to be export driven.”

Vocado is working on setting up a second production line in its Koromiko St factory. There was room in the factory for a third production line if needed, Mr Elder said.

The company’s production manager will be moving to Tauranga in January and local people will be employed in the future. “We see about five people employed, with another couple of people per production line that we manage to put in.”

Enterprise Angels chief executive Bill Murphy said the large investment and quality of the investors/advisers had drawn the company to Tauranga.

“It was important to us to have Colin close by the expertise we have here, it makes it easier for us to really engage and help the company.”

The Vocado deal represented a positive trend towards local investing, Mr Murphy said.

“Including the Vocado deal, we’ve invested in eight companies this year and, of those eight companies, three are Bay of Plenty companies.”

First published in the New Zealand Herald on Wednesday September 11 2013

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