Angel Investment Tracking Well – First Half Year Results

With the Angel Association to hold its 10th Anniversary Summit at the end of the week, first half year results show angels are investing at rates on a par with previous years and that the upwards trajectory of interest in the sector continues.

Reporting on the activity of its members tracked by the NZ Venture Investment Fund, Angel Association Chair Marcel van den Assum said $20.2m dollars was invested in 29 deals in the first six months of the year. Reflecting previous years, the split between new deals and follow-on funding was one third/two thirds.

Mr van den Assum went on to note that typically there is a substantial uplift in activity in the second half of the year.

“The level of deal flow being generated by accelerators such as Wellington’s Lightning Lab, the Manawatu’s Sprout and Auckland’s Flux together with the establishment of new networks this year such as Zino Ventures, Angel Investors Marlborough and Hawkes Bay Angels bodes well for another record year of investment,” said Mr van den Assum.

“When record keeping began in 2006, only 30 deals were done and $21m was invested. Annual investment has now exceeded $50m per annum for the last four years and grown by an average of $5m a year to reach nearly $70m in 2016,” he added.

“A decade into this endeavour it’s pleasing to see three angel-backed ventures deliver returns this year,” said Mr van den Assum.

PowerbyProxi was sold to Apple, Publons to US-based Clarivate and IMeasureU to UK-based Oxford Metrics.

This year’s 10th anniversary angel summit is being held back where it all started in 2007, on Waiheke Island. The focus will be on what is required to build on the success of the last decade which has seen almost $500m invested into nearly 1000 deals. Ten years ago there were just 4 angel networks with about 100 members. Today there are a dozen networks operating from Dunedin to Auckland with over 700 angels contributing capital, connections and expertise to about 100 ventures a year. All this activity has delivered hundreds of jobs and tens of millions of revenue for the country and is now beginning to generate the returns required to ensure the endeavour is sustainable.

–Ends–

For more information, please contact:

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

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

The Angel Association of New Zealand (AANZ)
The Angel Association is an organisation that aims to increase the quantity, quality and success of angel investments in New Zealand and in doing so create a greater pool of capital for innovative start-up companies. It was established in 2008 to bring together New Zealand angels and early-stage funds. AANZ currently has 30 members representing over 700 individual angels associated with New Zealand’s key angel networks and funds. 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

 

New Zealand Venture Investment Fund
The New Zealand Venture Investment Fund invests with venture capital funds and alongside angel investors to support New Zealand technology companies with start-up and growth capital. The NZVIF was established by the New Zealand government in 2002 to build a vibrant early stage investment market in New Zealand. Recent NZVIF data revealed angels have invested more than $NZ484m in over 928 deals and 296 companies in the last 10 years. NZVIF has $245m of funds under management which are invested through two vehicles: the $195m Venture Capital Fund of funds and the $50m Seed Co-investment Fund. All investments are made either through privately managed venture capital funds, or alongside experienced angel investors. For more please visit: www.nzvif.co.nz.

 

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Kiwi tech company raises millions for expansion

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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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Rockit Global’s mini-apples grow maxi-value

Rockit markets the miniature Rockit variety apple snacks and can’t keep up with demand. The apple snack is grown in both hemispheres with Rockit holding variety rights.
Pioneer Capital and Oriens Capital’s purchased Mr Alison’s stake in March.
“This result, while not cash-in-the-pocket, is a great outcome for the angel investors in these companies, the early-stage investment community and the agtech sector in New Zealand,” Mr Murphy said.
“Not only does it demonstrate that it is possible to get close to that mythical 10x return but that it’s possible to achieve that in a New Zealand food/agtech company. That’s something we’ve been working on for years.”
Enterprise Angel investors first invested in Rockit Global Limited (then called Havelock North Fruit Company) in 2011 and in the Rockit Orchard Limited Partnerships, becoming the first large-scale growers of the Rockit apples variety in 2012 and 2014. They formed the board of Havelock North Fruit Company Limited (now Rockit Global Limited) and guided growth thanks to expertise in the kiwifruit industry.
Last year Rockit exported 77 containers and earned its first profit while a wrestle for control between Mr Alison and six other shareholders went to the High Court. Mr Alison owned the largest single share in the company and had sought to buy the others out, instead bowing out a wealthy man this year.
“Securing funding as Rockit has from New Zealand private-equity growth investors is very significant and something I hope we see a lot more of in future,” Mr Murphy said.
“It sends a signal to the early-stage investors and entrepreneurs that it is possible to achieve post angel-round funding to better position young New Zealand companies to provide substantial investment returns.”
Rockit chairman John Loughlin said it was very positive that high-calibre growth equity investors such as Pioneer and Oriens recognised “the tremendous potential” in Rockit and would contribute governance expertise and additional capital to help the company deliver on “ambitious” growth plans.
Mr Murphy said Mr Alison did a great job in identifying “the lovely little apple” and a successful marketing strategy.
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Opinion: The state of play for New Zealand’s venture capital industry

The question of the future of the NZ Venture Investment Fund is the trigger for one of the most important questions right now in New Zealand – how early stage venture capital in R&D, innovation and technology is funded and managed.
It goes beyond the question of NZVIF, which is a legacy institution and served a different purpose in the past. NZVIF is, in effect two institutions – an investor of the $50 million Seed Coinvestment Fund co-investing alongside angel investors to date in over 230 seed and VC stage companies and manager of 11 secondary stakes in established funds. It has a team of just five investment managers, which is small relative to the number of investments. Profit maximisation of these holdings for the government by the existing team is possible with many different options.

Read more

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Angel investors warned about being too passive, not doing due diligence

A new survey suggests wealthy angel investors are not taking as close a look as they should into some of their investments.
Research by Massey University management master’s student Hattaf Ansari shows that only 75 per cent of the 88 active investors surveyed had done their own due diligence for all their previous investments.
That left a quarter who did not, suggesting that they had invested in ventures before by relying primarily on others’ opinion – or doing no due diligence.
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Apple robot up for angel investment

A Tauranga company is ready to take its apple packing robotics offshore and help remove the headache of finding staff to do mundane work.
The automated apple packing machines place apples in trays ‘‘colour up’’ with the stems aligned, using sensors, software and electromechanical technology, and are expected to remove some of the monotonous work that apple packhouses find difficult to staff.

View article

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Unicorn Investors: The Top 5 Firms With the Best Record

Unicorn. Few words are as celebrated in the tech world — and few, as hated.

Coined in 2013 by Aileen Lee to describe a private company valued at over $1 billion, unicorn — much like its relatives “growth hacking,” “deep dive” and “making the world a better place” — began with the best of intentions …only to wind up where roads paved that way tend to go.

While no one can deny the unicorn’s past supremacy, a growing minority has begun hailing its “extinction,” and in its place, the rise of the “cockroach.” Dropping IPOs, rumors of tech’s next “burst,” and, of course, good old-fashioned hype all threaten the unicorn’s existence.

Read more

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Bay of Plenty angel investors facing challenges

Experienced American angel investor Brian Cohen has warned the New Zealand industry that the local capital cycle is stunted.

“You’re not in the investment business – you’re in the exit business,” he said, in comments delivered at the recent Angel Association of New Zealand annual Angel Summit. “Your job is to make money, stop being so nice.”

Bill Murphy, executive director of the Bay of Plenty’s Enterprise Angels, the country’s biggest angel group, said the warnings were well taken by the local industry.

“The most experienced investors in this space are getting more and more discerning about what they invest in and in ensuring everything is in place to make that investment a success,” he said.

“It’s getting more difficult to raise money for investment opportunities, which reflects that. But it’s also a reflection of where the industry is at here – we’ve only really had an angel community for the past decade or so, whereas they’ve been going for twice as long in the US and Europe.”

Mr Murphy said because so far there had been relatively few liquidity events from very early stage investments, it was not yet clear whether there was an additional challenge and risk for those investing in New Zealand companies, compared to the risks facing American or European investors operating in their home markets.

“In our case we invest in these companies and then we have to take them into the international market. And we’re just not sure how much risk that adds.”

Enterprise Angels provided a copy of remarks made by Mr Cohen – chairman of New York Angels, the world’s biggest angel network, who was one of the international keynote speakers at the summit.

Mr Cohen said New Zealand appeared to have a great angel ecosystem

“It’s full of enterprising people, there is a good level of government funding into universities, centres of excellence and crown research institutes producing great intellectual property,” he said.

“And ‘top of the pipe’ activity, including incubation and acceleration, seems very active – your entrepreneurs do more with less. They are working hard to succeed despite the gaps in your system.

“What’s missing, and crucial to your future as a globally attractive incubation nation, is the depth of capital to grow New Zealand companies to a size where they are attractive and competitive in international markets. Your capital life cycle is stunted.”

Mr Cohen told delegates at the event that they were responsible for this, and must get serious about fixing it. Promising companies which are being seeded and started would wither and die if they didn’t, he said.

Mr Murphy said the New Zealand Angel environment was dynamic, with a lot of investing going on.

“But there are still lessons to be learned about backing the best investment opportunities and then being able to take those companies them right through the cycle. The critical stage for all parties is the liquidity event.”

Anne Blakeway, investor relations manager for Enterprise Angels and its recently created online investor platform AngelEquity (see box), said the Mr Cohen’s comments aligned with those heard from founders and business angels.

“They need follow-on capital to address the market opportunities they are developing,” she said.

“If we don’t get more investment into them, by making it possible for more investors to get into this space, we’ll limit their chances of success. They’ll miss out, and so will New Zealand.”

First published NZ Herald – 11 Feb 2017

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Lead Partners

NZTE NZVIF PWC

Expert Partner

NZX AVID AJ Park “FNZC.jpg”

AANZ Summit Sponsors

Callaghan Innovation “UniServices” Kiwinet “Spark”