Angel investors prefer web companies

Investors in start up companies prefer web based software and services according to a recent survey by Angel Association New Zealand.

Angel investor’s preference for software companies is followed closely by technology hardware and equipment, then biotech and life-sciences.

Angel Association Chair, Phil McCaw said “around half of angel investors invest more than $30,000 on each deal, with twenty percent having up to $100,000 to spend.”

“Thirty percent of angels preferred deals involving $250,000 to $500,000 in the first round of funding being sought by a company. Investing in deals at concept stage with the product and market still needing validation was least popular. Investors prefer companies with a proven business model and some sales.”

“Angel investors bring expertise with their capital. Over a third of investors are prepared to roll up their sleeves and get deeply involved in preparing a venture for investment.

The Angel Association surveyed its members including those running seed funds and individuals who are members of formal networks. New Zealand has half a dozen managed funds investing in early stage ventures and approximately 200 angels belonging to networks based in Otago, Christchurch, Nelson, Wellington, the Manawatu, Tauranga and Auckland. A quarter of the members responded to the survey. Industry publication Young Company Finance reported the survey results in the March 2012 issue.

Angel investors have cumulatively invested $220 million into high-growth companies since 2006, in an average deal size of $540,000.

Contacts

Colin McKinnon, Executive Director, Angel Association New Zealand Incorporated
+64276406400
[email protected]

Consolidating angels holding their own

Angel investment in New Zealand is consolidating at around 100 deals a year involving $30 million of investment into start-up companies a year, New Zealand Venture Investment Fund chief executive Franceska Banga said today.

Releasing the latest Young Company Finance Index, Franceska Banga said that angels invested $27.6 million across 95 deals involving young New Zealand companies in 2012. This compares to $34.5 million invested across 100 deals in 2011. It is similar to the investment levels in 2007 and 2008, although below the 2009 and 2010 boom years when annual investment reached $50 million.

Read more from NZVIF

Read the full Young Company Finance report

BioLumic raises GD1 funding for offshore growth

Plant science company BioLumic has successfully completed a new investment round with backing from the Global from Day One programme (GD1). The investment will finance customer trials and a foray into international markets.

BioLumic is a Palmerston North company which is commercialising ultra violet light technology developed to improve crop growth within large scale horticultural systems. Its proprietary UV and ‘Smart Array’technology is able to control plant size, growth, stress tolerance and a range of consumer quality attributes in a way that has never beforebeen commercially achievable. “BioLumic is a very attractive investment proposition due to the significant potential of its technology to increase returns for high volume vegetable and algae growers internationally,” says GD1 chief executive Greg Sitters.

“The company is still at an early stage of developing technology that has massive worldwide applicability. The technology will revolutionise the way plants are grown. This kind of early stage investment in companies with immediate global potential is precisely the sort of opportunity which GD1 is very interested in backing.”

“BioLumic is fortunate to have the backing of a GD1 investment to follow our initial fundraising through the MIG Angels’ Fund 1 and the New Zealand Venture Investment Fund’s SCIF fund,” says Warren Bebb, BioLumic general manager.

“This latest investment enables us to conduct extra customer trials and engage more with potential international partners and markets. As a result of this funding, we will be in a strong position to have our first product in market by the end of 2014.”

The science behind BioLumic was developed by Dr Jason Wargent, an applied plant physiologist at Massey University. The company was founded in November 2012. Palmerston North-based BCC has to date managed the commercialisation process, and the company has also received a Callaghan Innovation Project Grant and a loan from the Central Energy Trust.

“The MIG Angels identified BioLumic as a company with high potential and invested in it through MIG Fund 1,” says Mike Creed, who represents MIG Fund 1 on the BioLumic board. “We are happy with the progress the company has made so far and absolutely welcome the investment by GD1. Increasing the cash on hand will give the company a bit more breathing space as it works towards its milestones.”

Bebb says BioLumic will soon begin customer trials at two sites in the North Island; the company will start small-scale customer trials later this month, and larger scale customer trials are scheduled to begin in November.

BioLumic has recently completed filing its PCT patent in New Zealand and, over the next year, says Bebb, the company will determine in which other countries to file. He expects the first commercial prototype to be available for testing by the end of 2013 and the second prototype, incorporating modifications of the first, is planned for trials in mid-2014. The company expects to be in production towards the end of 2014.

BioLumic (www.BioLumic.com)

BioLumic is a plant science company based on science developed at Massey University. Through manipulating exposure to doses of UV light, BioLumic’s IP has been shown to optimise plant growth for desired effects including yield, disease control, colour and flavour. Current applications of the technology are being developed that include treatments for transplant crop seedling quality; growth and quality regulation of fully indoor produced leafy vegetables and high-value salad herbs; and pathogenic disease treatments for a range of horticultural crops. The company is also investigating other applications of the technology such as manipulation of desired characteristics in the biological material for nutraceuticals, pharmaceuticals and algae.

Global from Day One (www.globaldayone.com)

GD1 is a seed investment fund which has up to $4.6 million available for investment – having raised $2.3 million from private investors and with access to matching co-investment from the New Zealand Venture Investment Fund. It aims to invest into around 25 start-up companies with international ambitions over the next four years. Nationally-focused early stage investor Sparkbox Ventures is managing the fund.

MIG Fund 1 (www.thebcc.co.nz/cms/page.php?view=mig)

Established in 2007, MIG Fund 1 targets potential investments at the seed and start-up phase of emerging businesses. Potential investments can be in any sector and come from across New Zealand, although MIG Angels are particularly interested in potential investments from the wider Manawatu region. With the fund nearly fully-subscribed, the MIG Angels are planning to launch MIG Fund 2 in 2014.

BCC (www.thebcc.co.nz)

Based in Palmerston North, BCC turns innovative ideas into thriving new businesses. It secures investment funding to grow technology businesses, offers management support and mentoring for start-ups, and facilitates the journey from concept to commercialization.

Media contact
Warren Bebb
General Manager
BioLumic Ltd.
DDI +64 6 352 0102 M +64 21 799 257
[email protected]

For GD1, contact David Lewis 021-976 119

MOVAC Invests In 1Above

MOVAC, the venture capital investment firm, has taken a 13% stake in 1Above, a functional drink that helps people fight jet lag and combat many of the health risks and discomfort related to flying.

1Above raised more than $2.4 million in this latest investment round, which was led by MOVAC and included TradeMe founder Sam Morgan and existing shareholders. Investors were attracted by 1Above’s exponential quarter-on-quarter growth since being launched in December 2010 and the quality of the team.

The funds raised will be used to accelerate the company’s global expansion and build the executive team, says Founder and Chief Marketing Officer Roger Boyd. “Attracting the likes of MOVAC and Sam to our loyal shareholder base is a real endorsement of the company’s abilities to deliver and scale. We are still a small company in the scheme of things, but we have achieved great channel successes. For example in WHSmith, in Australian airports, we are the third or fourth brand in terms of sales out of more than 40 in the fridge. We also have a great repeat purchase rate, terrific unsolicited customer endorsement and a loyal base of flight crew and well-travelled ambassadors who are helping grow the company by sharing their own positive stories. It’s a very exciting time at the moment.”

Work to build the executive team has already begun with the appointment of Tony Kerridge as Chief Executive Officer. Tony was General Manager and a shareholder of Caffe L’affare, a business he helped build from inception. It was sold for a reported sum of $25 million to Cerebos, the Australasian sauce, spice and coffee manufacturer, owned by the Japanese beverage giant Suntory. Tony was also an early investor in Charlie’s, the juice company, which was sold to Asahi in 2011 for $129 million. He has been an investor in 1Above since launch and brings years of FMCG sales and marketing
experience to the business, says Boyd. “He will be a great asset in this high growth period.”

New Zealand business investor and advisor Mark Wynne has also joined the board as Chairman. Mark was President of Kimberly Clark South Asia and has more than 25 years global leadership and brand building experience. He joins MOVAC partner Mark Vivian and investment banker and long-term 1Above investor Toby King on the board.

MOVAC was attracted to 1Above by the company’s targeted focus on a deep narrow distribution channel and 1Above’s creation of a new food and beverage business category, says MOVAC’s Mark Vivian. “Roger has demonstrated the potential of 1Above in a relatively short space of time, and this has been further evidenced by the quality of the team that he has attracted. I’m very excited by the range of opportunities that we have in front of us.”

The investment makes 1Above the third portfolio company in MOVAC’s third fund, and one of several investments MOVAC expects to name shortly as it continues to invest in Kiwi companies which have the ability to rapidly scale revenues.

Boyd, a former Fonterra Brands general manager, says the company is now well placed to reach its ambitious growth targets. 1Above is also advertising for new staff to beef up its international sales and marketing team.

For photos, interviews or further information please contact:

Roger Boyd on +64 201 111 201 or [email protected]

Mark Vivian on +64 272 464 936 or [email protected]

Notes to editors:

1Above® – The Flight Drink – www.fly1above.com

Launched in Dec 2010, 1Above® is a functional beverage targeted at helping people fly well and arrive ready to get more from their travels. The company was founded by Roger Boyd a former Fonterra executive after suffering years of jet lag and on the back of rising health concerns. 1Above contains significant dietary levels of six essential electrolytes; 67-133% of your daily B vitamin needs; grape seed extract; and an active ingredient Pycnogenol®, which has been shown in 58 clinical studies to reduce the length and severity of jet lag and support healthy circulation, amongst other benefits.

MOVAC – Venture capital – www.movac.co.nz

MOVAC is an experienced fund manager that provides venture capital to New Zealand businesses that have potential for rapid and large-scale growth. It has made a number of early stage investments over the past decade and is currently investing Fund 3: a $42m fund that provides $500k to $5m of growth capital to companies who have a plan, the potential and the commitment to grow. MOVAC provides capital, expertise and connections.

Aduro Biopolymers secures investment from Wallace Corporation

Hamilton-based Aduro Biopolymers, a natural resource materials and biopolymer company, today announced it has secured investment from Wallace Corporation, by volume New Zealand’s largest service rendering business, processing a variety of co-products from the meat processing industry. Aduro Biopolymers is a spin-out company formed by WaikatoLink Limited, the technology transfer office of the University of Waikato. The company was formed to develop and market materials and biopolymers for use in the manufacturing sector. The company is currently developing a novel material based on an unconventional idea; turning bloodmeal into bioplastic.

“Aduro Biopolymers has developed an innovative method for the production of bioplastics made from by-products of the red meat and poultry industries,” says Graham Shortland, CEO of Wallace Corporation. “We’re always looking for innovative ways to turn new and existing raw materials into higher value products in order to sustainably deliver superior returns to our meat processing partners.”

“We’ve been very impressed by the team at WaikatoLink and their track record in commercialisation as well as the quality of research from the University of Waikato. This investment is part of a broader strategy and the start of a partnership that will allow us to bring new research from the University into our business.”

Duncan Mackintosh, the Chief Executive of WaikatoLink says, “It’s fantastic to secure investment at such a key point in the company’s development. We’re also delighted to have Sir James Wallace join the Aduro board. Aduro Biopolymers is a great example of an early stage innovative company based on publically funded research. It’s encouraging to see a successful established company like Wallace Corporation value this innovation and its commercial promise as part of its strategy. This partnership will help the success of Aduro and open up new opportunities too.”

Aduro Polymers aim is to develop environmentally conscious materials for the manufacturing and construction sectors. The company’s first product is Novatein, a bioplastic that will be price competitive with petrochemical plastics. The global plastics market is worth over a trillion dollars and currently bioplastics represent 5-10% of that market, with a compounded annual growth rate of almost 20%.

Darren Harpur, Acting CEO of Aduro Biopolymers says, “The manufacturing process for Novatein is quite simple. This means the capital costs required to commence manufacture will be relatively low and should enable the cost effective production of Novatein. There is a growing demand for environmentally friendly plastics but they need to be at the right price point for consumers. We are confident we can achieve this price point with Novatein.”

The science behind Novatein originated and continues to be developed by the University of Waikato’s Dr Johan Verbeek and his team, where bloodmeal produced by the red meat industry is processed into granules which have been modified and optimised to suit a chosen product’s attributes. The granules can then be manufactured into injection moulded or extruded products using industry standard equipment. Novatein has been in development since 2007 and has received investment support from KiwiNet’s PreSeed Accelerator Fund from the Ministry of Science and Innovation.

Harpur says, “As consumers, we’re all aware of the effects of plastics on the environment. Novatein will help solve some of those problems by introducing a bioplastic made from naturally occurring materials that on their own quickly degrade in the environment. We think that this aspect combined with a simple manufacturing process will enable our technology to be adopted quite rapidly.”

University of Waikato Vice-Chancellor Professor Roy Crawford says the work done by Dr Verbeek and his team has garnered much interest as it has developed and it is pleasing to see the investment by Wallace Corporation. “At the University of Waikato we promote the delivery of world-changing and relevant research. In this case we have research that takes low value co-product of the red meat industry and creates a biodegradable plastic. I consider that highly relevant to our world and is an excellent example of research that is making a difference.”

Aduro Biopolymers is working with commercial partners in New Zealand and Australia to develop Novatein for a range of product lines. The company is also looking to work with New Zealand research organisations to develop new and novel materials from other natural resource polymers.

Further information:

Sandra Lukey
Shine Group (PR for WaikatoLink)
Mobile: +64 21 2262 858
Email: [email protected]

About Aduro Biopolymers

Aduro Biopolymers is a natural resource biopolymer company. Their lead product is Novatein, a biopolymer formulation using bloodmeal which is a co-product of the red meat industry. Aduro Biopolymers is a spin-out company formed by WaikatoLink Limited, the technology transfer office of the University of Waikato. For more on Novatein see www.novatein.co.nz

About Wallace Corporation

Wallace Corporation Limited was formed in 1994 to consolidate several unique businesses. One of those businesses had been operating a rendering plant, principally for dead cows, at Waitoa since the early 1930’s, and was purchased by Mr JD Wallace in 1939. The other businesses, established by James H Wallace, were Wallford Meats (NZ) Ltd, Eureka Hides & Skins Ltd and Wallace Industries Ltd. Recently Wallace Meats was acquired by Silver Fern farms. Today Wallace Corporation employs up to 150 staff. The Company is a significant exporter with over 80 percent of sales being to the Europe, Australia, China and Southern Asia. Wallace Corporation has a commitment to building an industry based on the future rather than on the past. www.wallace.co.nz

About WaikatoLink

WaikatoLink Limited is a world class technology development and investment company, with a strong track record in translating research outcomes into commercial applications and technologies. As a wholly-owned subsidiary of the University of Waikato, it achieves this by identifying, managing and commercialising the University’s intellectual property. WaikatoLink works closely with industry, investors and researchers to identify and develop market opportunities for new technologies, and plays a key role in University knowledge transfer for economic transformation. Since its establishment in 2002, WaikatoLink has completed numerous licensing deals and established more than 12 start-up companies and joint ventures, which have collectively created more than 138 full-time equivalent jobs and achieved market capitalisation nearing NZ$200 million. Three of its start-ups have already been successfully exited. www.waikatolink.co.nz

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