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: 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. 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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Peer review is essential to good science – it’s time to credit expert reviewers

Although expert evaluation of research papers and funding applications is still widely regarded as central to the quality control of research, publishers and funders have increasing difficulty getting academics to agree to spend time on what can often be an onerous, thankless task. In short, peer review has problems.

The strain on the system is due in part to worldwide growth in research activity, but also arises because there isn’t a universal mechanism for recognising or crediting people for serving as peer reviewers.

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Capital Markets Report: Making it a bigger deal

There’s still a big gap in the market for traditional venture capital, with long lead-ins, writes James Penn.
The average transaction value in New Zealand’s venture and early stage capital sectors more than doubled from 2015 to 2016, according to a recently released report. However, concerns about the fragility of the sector remain.
The New Zealand Private Equity and Venture Capital Monitor, published by EY and NZVCA, paints a rosy picture for the venture and early stage sector, with growth of 47.7 per cent in the value of deals — which don’t include angel investments — compared with 2015.
Interestingly, despite this growth in total investment value, the number of transactions has declined. This has resulted in the average transaction value growing from $906,000 in 2015 to $1.85 million in 2016, suggesting a maturing of the sector.
A similar, albeit more moderate, story can be observed for angel investments.
A recent report by the New Zealand Venture Investment Fund (NZVIF) stated that while the number of investments by angel groups and funds decreased 15 per cent, the total value of investment increased by 13 per cent, reaching $69m in 2016.
Willingness to invest larger sums in each individual company is indicative of investors having more confidence that those companies have strong, often international, growth potential.
However, this means that the sector is highly focused on growth capital — for companies that have already generated a significant level of revenue.
“A big gap remains in the market for more traditional venture capital targeted at businesses that have long lead times and deep intellectual property,” says Colin McKinnon, Executive Director of NZVCA. “We don’t have a New Zealand fund in the market at the moment that would be likely to invest in (say) Rocket Lab or 8i while they remain pre-revenue.”
Managing Partner of Movac, Phil McCaw, sees fragility in the early stage capital sector, arguing that New Zealand needs at least a couple more significant funds around the $150 million mark. Movac for its part recently raised $110 million for its Fund 4, and has already made a significant investment from that fund in retail software developer Vend.
“My vision for the venture industry is to see that we’ve got three or four long term sustainable funds that are $150 million type funds,” says McCaw. “We’ve got to find a way to lift this industry to get to that position.”
Engender Technologies, a Kiwi company that has developed laser technology to sort livestock sperm by sex, is illustrative of the benefits that come from these growth-focused capital sources.
After closing a $4.5 million capital raise — led by Kiwi venture investment firm Pacific Capital — in June last year, Engender has started growing its footprint globally. To date in 2017, Engender has announced a $1 million deal with Asia’s largest animal genetics company and has been named one of the five most innovative Agtech start-ups at Agfunder Global Innovation Awards.
The positive headline figures are also reflected in a flurry of activity among old and new specialised funds. In March this year, for example, NZVIF announced its 17th partnership for its seed co-investment fund with ArcAngels, a group of private individuals focused on investing in female-led start-ups.
Meanwhile, the NZ Super Fund broadened its scope of investments over the past year, with investment in funds that target a spectrum of companies, from early to late growth.
“New capital commitments for funds including Movac and Global from Day One were complemented by on-going fundraising by Punakaiki Fund,” says McKinnon, “Crowdfunding platforms Snowball Effect and Equitise, and the public listing of Powerhouse Ventures also raised capital.”
KiwiSaver is nowhere to be seen in venture or private equity which is disappointing.
Colin McKinnon
McCaw says “I’m more confident than I’ve ever been. There’s more cash in the market and there’s more opportunity, and I don’t see those things changing in the next few years.”
Despite this dynamism, there remains work to be done to foster a deep early stage and venture capital market that can
satisfy the needs of rapidly scalable ventures.
Public funds and institutional investors need to play a greater role. While the Super Fund has taken a step in this direction, it has taken some time and the industry would welcome other funds following suit.
“KiwiSaver is nowhere to be seen in venture or private equity which is disappointing. International investors prioritise larger markets,” explains McKinnon.
“Creating a framework that incentivises the early-stage growth market until a long-term track-record is developed should be considered. The industry is close, but not quite there yet.”
McCaw also sees a need for policy change in this regard, noting the success of recent Australian policy changes and the subsequent growth in their sector.
“If we want a growth economy that grows from entrepreneurship, you’ve actually got to put in place a policy framework that supports it across the spectrum,” says McCaw. “And I think there’s an absence of policy at the moment in the venture and growth capital class that is not enabling the scaling of funds.”
And the age-old question of returns still remains. Yet again, there was an absence of divestment within the venture and early stage capital sector in 2016.
According to the Capital Monitor, just one of the past six years has seen any divestment, and that was a mere $400,000. However, McCaw says this is the nature of the beast and the early stage capital sector is always expected to have long pay-off timelines.
“It is still a developing story. Around the world, that’s a story that takes 20 years to create, across a couple of fund iterations,” says McCaw. “But it’s coming.”
“You can kind of justify the growth that’s incurring inside of these companies, because there really is some really fast revenue growth occurring — so there’s definite signs that the industry is investing in things that are creating long term value.”
“The rate of return at the moment in terms of cash back is not fast enough,” accepts McCaw. “But it’s getting faster.”
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NZ tech sector attracts record offshore investment

New Zealand’s technology sector saw record growth in funding, driven by overseas investors in the year to March, according to the second annual Investors’ Guide to the New Zealand Technology Sector.
“The tech sector is New Zealand’s third largest exporting sector, contributing $16 billion to GDP (gross domestic product) and it is growing fast,” Economic Development Minister Simon Bridges said in a statement. “It presents multiple opportunities for New Zealand and international investors.”

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Investor Activity in NZ Tech Sector Continues to Intensify

Auckland, May 9, 2017 – Investment in New Zealand’s technology companies continues to rise, with record amounts of funding coming from offshore investors, according to the second annual Investor’s Guide to the New Zealand Technology Sector published jointly by the Ministry of Business, Innovation and Employment (MBIE) and the Technology Investment Network (TIN).

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New Zealand’s biomedical sector to benefit from Australian Government initiative to make Australia a global leader in life science research commercialisation

Medical Research Commercialisation Fund (MRCF) creates fourth and largest fund
Wellington, 15th December, 2016 – The Australian Government’s launch of the AUD$500 million Biomedical Translation Fund (BTF) this week, an initiative to make Australia a global leader in the commercialisation of biomedical discoveries, will benefit New Zealand’s biomedical sector, says Dr Chris Nave, Managing Director of venture capital firm, Brandon Capital.
The BTF is a pool of public and private capital which will be managed by three venture capital fund managers who were announced this week. Brandon Capital has been allocated to manage the largest fund of AUD$230 million comprising AUD$115 million from the Commonwealth government matched with AUD$115 million from private investors.

The new fund, the MRCF BTF, is the fourth and largest investment fund of the Medical Research Commercialisation Fund (MRCF). Brandon Capital manages the MRCF, a unique collaboration between over 50 of New Zealand’s and Australia’s leading medical research institutes and research hospitals. These organisations contribute biomedical investment opportunities to MRCF funds as well as their expertise to support the development of these discoveries.

In April this year New Zealand joined the MRCF, enabling New Zealand research organisations to become members of the fund and seek investment support for emerging technologies from the third MRCF fund, MRCF3, an AU$200 million fund. Currently six New Zealand research institutes are members of the MRCF*.

“This is a bold and visionary initiative by the Australian Government to ensure Australia reaps the benefits from our world-class medical research,” says Dr Chris Nave, who is also Principal Executive of the MRCF.
“On all measures, Australia and New Zealand produce some of the world’s leading biomedical research, but unfortunately, too often, we see promising discoveries leave our shores early in development, with little value returned. The size of the MRCF BTF provides the opportunity for these technologies to be developed to much later stages in Australia, and in some cases through to the market and importantly patients, retaining greater value and leading to the creation of new jobs and income. The BTF program will be transformative for local industry, providing the ability for research discoveries to be developed from concept to commercialisation in Australia.”

While New Zealand member institutes will not be able to participate in the MRCF BTF, the new fund significantly deepens the pool of investment capital under management by the MRCF, with the advantages that brings to all members. Promising early stage medical discoveries from New Zealand member institutes can continue to seek investment from MRCF3 and follow-on funding.

Duncan Mackintosh, Brandon Capital New Zealand’s Investment Manager says the new fund means there is now AUD$430 million investment capital available for promising biomedical research, giving the MRCF real scale. “The MRCF is the largest life science investment fund in Australia and New Zealand by quite some margin. We are now competing at a global level and this will benefit our New Zealand investments by getting them greater attention internationally. It will also help us to attract offshore capital for New Zealand discoveries, attention from strategic partners and will mean we can attract and retain talent to run New Zealand investment companies.”

The BTF will see $250 million of Commonwealth government funding matched with private sector capital, creating $500 million for investments in companies with medical research projects at advanced pre-clinical, Phase I and Phase II stages of development.

The MRCF BTF private investors include CSL Limited, Australia’s largest and most successful biotechnology company, and the leading superannuation funds, AustralianSuper, Hesta, Statewide and HostPlus.

Brandon Capital is ranked as one of Australia’s top performing venture capital firms**. MRCF BTF will focus on supporting later stage opportunities, with the MRCF3 continuing to seed promising early-stage discoveries.

CSL Limited will be the only biopharmaceutical investor in the fund and will provide both investment capital and later-stage development and commercialisation expertise.
“CSL is a strong supporter of the need for a greater focus on translational research in Australia. The opportunity for the BTF to support the development of promising discoveries, onshore, is very exciting,” says Dr Andrew Cuthbertson, Head of Research and Development, CSL.

“The MRCF-BTF will not only have access to the pipeline of opportunities and capabilities of its member medical research organisations, it will also have access to the global medical research development capability and expertise of CSL,” says Dr Stephen Thompson, co-Managing Director at Brandon Capital.

It is anticipated the MRCF BTF will begin making its first investments in early 2017.

*New Zealand MRCF members: Auckland Cancer Society Research Centre, University of Auckland; Institute for Innovation in Biotech, University of Auckland; Brain Health Research Centre, University of Otago; Malaghan Institute of Medical Research; Ferrier Research Institute, Victoria University of Wellington; Callaghan Innovation.

**In an Australian Financial Review ranking of Australia’s top performing venture capital and private equity funds (31 August 2016), Brandon Capital’s Brandon Biosciences Fund 1 was ranked second.

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Theresa Gattung Venture Capital fund

ArcAngels and Angel Association New Zealand today welcomed the launch of Theresa Gattung’s new Venture Capital fund which aims to raise capital from women, for women entrepreneurs.

“Boosting the pool of capital for entrepreneurs is vital for New Zealand’s ecosystem of start ups to grow,” said Cecilia Tarrant, Chair of ArcAngels, a New Zealand based angel organisation focused on funding women entrepreneurs.

“As an organisation, focused on women-founders, we are delighted to hear Theresa Gattung, one of New Zealand’s preeminent business leaders has launched an initiative to fund women entrepreneurs, supported by women. Having a Venture Capital fund will help expand the capital and mentorship female entrepreneurs need to develop their businesses,” Tarrant said.

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Movac Fund 4 reaches first close at $105 million

MEDIA RELEASE

Movac Fund 4 reaches first close at $105 million

Movac Fund 4 has raised $105 million to invest in the next generation of iconic Kiwi technology companies.

The Fund is underpinned by $75m in investment commitments from institutional investors including Ngāi Tahu Holdings, with the balance coming from the New Zealand Venture Investment Fund, leading New Zealand family offices, community trusts, and private investors.

Movac Fund 4 will be investing in established New Zealand technology companies that are seeking capital to accelerate their growth.  These are companies with an established track-record of sales, a team in place to grow the business, and the ambition and potential to scale their business internationally.  This is a later stage fund than Movac’s previous funds.

Phil McCaw, Movac Managing Partner, commented: “We are really encouraged by the commitments from all of our investors, and in particular our new cornerstone investors who have recognised the significant investment opportunity that exists in the New Zealand technology sector right now.”

“Importantly, we have a strong pipeline of potential investments for Movac Fund 4.  We have already been meeting with and conducting due diligence on various opportunities, and are very impressed by the quality of the companies that we’re seeing.  We anticipate that we will make Fund 4’s first investments prior to Christmas.”

Ngāi Tahu Holdings Chief Executive, Mike Sang, commented: “Ngāi Tahu Holdings is excited about the addition of Movac Fund 4 to our portfolio.  We are looking forward to our new partnership with the Movac team and the added diversity the investment brings us from its focus on investing growth capital in the technology sector.”

Mr McCaw added: “As a team, we have 55 years of collective investment experience and we believe that we are uniquely placed to invest in and help accelerate New Zealand technology companies.  Our Fund 4 investors include a number of highly successful founders and business builders, experienced investors, as well as family offices and investment funds.  We also have a number of investor migrants investing in Fund 4.  We would like to thank them for their commitments, and look forward to working with them to grow the next wave of iconic Kiwi companies and delivering an outstanding investment return.”

Movac Fund 4 remains open for eligible investors until its final close in April 2017.

ENDS
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Labour targets ICT as second largest economic contributor

A Labour-led government would target the ICT sector to be New Zealand’s second largest contributor to the economy by 2025, believing it is a job-rich source of growth for a nation of small businesses.
While the precise definition of what constitutes ICT is up for debate, the party believes it currently sits somewhere between the third and fourth largest sector, behind tourism and the dairy and wine industries.
The party’s finance spokesman, Grant Robertson, unveiled the target when launching the results of the party’s two year ‘Future of Work Commission’ at its annual conference in Auckland over the weekend, unveiling a raft of proposals to improve intellectual property protection for small and medium-sized tech businesses, infuse schools and communities with digital learning opportunities, and a shake-up for innovation, science, and university research funding.

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Kiwi Landing Pad Spreads it’s Wings

New Zealand’s tech community – Kiwi Landing Pad – is on the move in San Francisco.

Set up in 2011 with funding from the New Zealand government and private investors, the Kiwi Landing Pad (KLP) has already helped hundreds of innovators keen to break into the highly competitive United States start-up scene.

The non-profit organisation caters for high growth technology companies. As well as reducing the risks and time involved in setting up an office, KLP also offers valuable access to necessary business information and networks.

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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”