Christchurch agri-tech company CropLogic launches prospectus

Christchurch company CropLogic’s​ long-awaited plans are coming to fruition with the launch of a prospectus to raise A$8 million (NZ$8.45m)

Chief executive Jamie Cairns will lead a roadshow presentation in New Zealand and Australia over the next fortnight.

CropLogic helps improve crop yields by combining research and technology with field support teams to provide accurate advice to growers.

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Acquisition of IMeasureU Limited

Adds new dimension to strong, profitable Vicon business.

Will further increase, over time, the Group’s recurring revenue base.

Oxford Metrics plc (LSE: OMG) the international software company servicing government, life sciences, entertainment and engineering markets, is pleased to announce the acquisition of IMeasureU. Using wearable sensors and its own proprietary software, IMeasureU has developed a world-leading high-fidelity motion measurement system which enables researchers and elite athletes to gain data-driven insights into athletic performance. The Directors believe this acquisition will contribute to the Group’s five year strategic growth plan by expanding Vicon’s addressable market, accelerating its ability to develop new Vicon product, opening up opportunities to cross-sell, and by further increasing over time the Group’s recurring revenue base.

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Capital Markers Report: Venturing closer to maturity

Richard Dellabarca, chief executive of the NZ Venture Investment Fund, has completed a strategic review of the industry and provided growth options to Government, reports Tim McCready.
Last year, then Economic Development Minister Steven Joyce announced a review of New Zealand Venture Investment Fund’s structure, reiterating the Government’s ambition for the fund to become self-sustaining.
Soon after the announcement, Richard Dellabarca was appointed chief executive of NZVIF in mid-2016 — a move that indicated the industry was maturing.
Dellabarca, an investment banker, had spent 14 years offshore in a variety of leadership roles in venture-backed companies, capital markets, financial services and technology-related opportunities.
He brings a private sector investment perspective, but given his experience as an entrepreneur he understands what is required to build globally scalable companies.
“Really good Venture Capital funds (VCs) are looking to build businesses. Investment is an important skill to have, but their greatest skill is in building companies,” he says.
“It helps to have gone through the journey of building a global company, or a company with global aspirations, in order to understand what is needed.”
When Dellabarca joined NZVIF, he was given a blank piece of paper and the mandate to go away and undertake an independent strategic review. He has spent the last year speaking with stakeholders — around 140 organisations and 230 individuals.
Dellabarca says he is encouraged with the significant amount of investable opportunities in New Zealand, noting that founders and teams tend to be aspirational and motivated, and companies aim to be global from day one.
The review noted a growing amount of angel investment — $69 million in the last year, and more than $400 million since figures have been tracked — in addition to the significant investment into universities and Crown Research Institutes.
There is money available in New Zealand to fund proof-of-concept in early stage companies.
But a shortage of funds was identified for opportunities requiring $5-20 million in early stage growth capital.
In addition, Dellabarca noted that in the Silicon Valley or the UK, “you generally see funds syndicating with two or three investors when raising Series A & B investment.
“Yet over here, we have only Movac and Global from Day One (GD1) investing locally in growth capital, severely limiting the opportunity to syndicate investments or fully fund early stage growth companies through to maturity — and ultimately a successful realisation of the investment.”
Although eight Venture Capital funds were originally established in New Zealand, the average fund size was only NZ$45 million compared with a global average of approximately US$300 million.
Dellabarca explains there is a good reason for global fund sizes given the amount of money a company generally requires through to an investment realisation.
“They will tend to invest in, say, 15-18 companies at $5-10 million each, and then keep money aside for further follow-on investment in companies that are succeeding.
“This allows for better funds management practice, managing downside while optimising on upside opportunities,” he says.
“These historic sub-scale New Zealand funds tended to invest in a range of companies, but then either didn’t have capacity to fund them through to success and, therefore under-capitalised them, or had later stage investors dilute them down when they couldn’t follow on with the investment.
Hopefully in 15 years we won’t need a NZVIF in any guise, and instead there will be several self-sustaining funds of scale.
Richard Dellabarca
“The consequence was that many of these funds didn’t generate appropriate returns for their investors,” Dellabarca says.
While offshore corporates and financial institutions have had an interest in allocating money into New Zealand technology innovation, they have not been able to find a platform to put the money in.
As many of these institutions manage multibillion-dollar funds, the smallest investment they are willing to make is $50-$100 million.
“With an average fund size of $45 million, their mandate will often preclude them from being more than 10-20 per cent of a fund,” says Dellabarca.
“By definition you need a $300 million to $400 million fund to take these cheques.
“We just haven’t set up a fund of scale to allow foreign investors to come in and access innovation.”
NZVIF have presented a number of options to Economic Development Minister Simon Bridges that aim to make the fund self-sustainable.
Although Dellabarca is unable to divulge the details on those options, he says the fund-of-funds model with its hefty fees on fees structure is no longer viable.
The results of the strategic review provide a clue that early stage expansion capital for growth companies is New Zealand’s choke point, and is a gap NZVIF would like to address if a model that works can be established.
“There is an unmet need. You could argue about the specific number but the current deal flow suggests an annual demand of $200-$300 million,” says Dellabarca.
“If you assume our current VCs invest over five years, holding back 30 per cent for follow-on investment (the traditional venture capital investing model), then you have approximately $20-$25 million invested per year, versus a demand of up to $300 million per year.
“But whatever the number is, it is substantially larger than available capital. The aspirational goal is to have that need met in some way or another.”
Considering the future, Dellabarca says that he would like to see more money in the angel space. NZVIF is currently the second largest angel investor in New Zealand, and he hopes that in time it won’t be needed.
He has the same goal for the venture capital space.
“Hopefully in 15 years we won’t need a NZVIF in any guise, and instead there will be several self-sustaining funds of scale,” he says.
“We don’t have government intervention in private equity.
“You would hope that ultimately the same will happen in the venture capital space.”
Power of NZVIF?
• The NZ Venture Investment Fund (NZVIF) was established by the Labour Government in 2002 to build a vibrant early stage investment market in New Zealand by investing alongside private venture capital funds into high-growth companies.
NZVIF currently has $245 million of funds under management which it invests through two vehicles:
• a $195 million venture capital fund of funds, partnering with private New Zealand venture capital funds to support the development of innovative companies from start-up through to growth (investing on a two-to-one basis).
• a $50 million Seed Co-Investment Fund (SCIF) established in 2005 to encourage angel investment and fill the investment gap for entrepreneurs needing capital to get their business underway (investing on a one-to-one basis).
Since its inception, NZVIF has formed 27 investment partners (16 angel and 11 venture capital partners) and invested in a portfolio of 236 companies.
NZVIF has helped stimulate $2.2 billion in leveraged capital, $1.2 billion in attracted overseas capital, employment of 6076 FTEs and $174 million in taxes.
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Investor Activity in NZ Tech Sector Continues to Intensify

TIN100 and MBIE launch second annual “Investor’s Guide to the New Zealand Technology Sector”
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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Angel investors need help to get young businesses to full potential

Angel investors shelled out a “solid” $23 million in the first half of the year but Angel Association chairman Marcel van den Assum said five to 10 times that sum would be needed to help the country’s young businesses reach their full potential.

The level of investment was up from $20m in the same period last year, but down on the $26m invested in the first half of 2014.

Venture Investment Fund (NZVIF) director Bridget Unsworth said only $5m of the total went into new businesses.

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Ubco and Balex Marine turn to Snowball funding platform for next phase of growth

Ubco, the Bay of Plenty-based electric bike maker, is transitioning to managing its manufacturing with Yadea, China’s leading electric scooter manufacturer, as it increases its focus on finalising a road-legal version of its off-road farm bike.

In addition, having raised $1.8 million in its latest funding round, it will launch an offer on Snowball Effect later this month targeting up to a further $700,000. Ubco will be the second Bay company to go to Snowball Effect for additional funding, with Balex Marine also currently seeking capital on the crowdfunding platform.

Ubco raised its initial capital through a combination of Enterprise Angels member commitments, EA Fund 1, and the NZ Seed Capital Investment Fund, plus existing and private investors.

The company, which has an established supply chain in China, is now transitioning to a new manufacturing arrangement with leading Chinese electric scooter maker Yadea.

Working with Yadea would make it easier to meet higher compliance levels required as it continued its push to create a road-legal version of the electric bike, said chief executive Tim Allen.

“Moving to a road-legal product is quite a big exercise,” he said. “It means we will be pushing though to the next level of quality control.”

Mr Allen said Ubco now believed it could sell a lot more than it originally estimated, and Yadea had the capacity to produce on a much bigger scale than the current arrangements.

However the company would be continuing to sell the original off-road model, was now beginning to make inroads into b-to-b areas, and is currently filling an order for 15 off-road electric bikes for Real Journeys, operating at Walter Peak in Queenstown. Ubco has also successfully sold bikes to the Department of Conservation.

Deion Campbell, who joined the board in his capacity as a private investor in Ubco and now serves as chairman, said the focus was on path to market. Mr Campbell is general manager generation for Trustpower.

“There are a lot of interesting opportunities in the market, like the conservation groups and tour operators,” he said.

“But to get the scale the business needs we really need to get offshore. The team is working on following up the leads we’ve had over the last year, which have come from distributors around the world.”

Preparations for the Snowball Effect launch were in the final stages, he said, and interest had been high with 90 responding to the platform’s initial announcement.

The company will be targeting an additional $700,000 to complete its round.

Balex Marine, manufacturers of the Automatic Boat Loader (ABL), launched its Snowball Effect offer on September 26, which will remain open until October 17. The offer was targeting $300,000 to close out the company’s current $900,000 capital round, with provision for over-subscription.

The capital will be used to strengthen the company’s push into new markets in Australia, Europe and the US, said chief executive Paul Symes.

A Hutchison Boat Show award winner, the remote-controlled ABL has aroused strong interest in the marine industry.

“The Snowball Effect round is the first time retail investors will have an opportunity to take a stake in the ABL,” said Mr Symes, a co-founder of the company.

“We have already achieved a number of our key production and marketing targets and are now looking to establish the most effective ways to meet the growing trade and user demand that we are experiencing both in NZ and abroad,” said Mr Symes.

The ABL is in commercial production and Balex has partnered with Gait International to manage all procurement, manufacturing, assembly and testing.

The company has signed up New Zealand’s largest nationwide marine dealer, Boating and Outdoors, with 23 stores, and has partnership agreements with four major trailer manufacturers and five NZ boat manufacturers. The company has also signed an exclusive distribution agreement for the UK, Europe, Middle East and Africa with Forge Group (UK).

Balex Marine also has sponsorship deals with two of New Zealand’s leading TV Fishing Shows – Big Angry Fish and Fishy Business.

Snowball Effect
Launched NZ’s first equity crowdfunding offer in August 2014, and now claims a 70 per cent plus share of the crowdfunding marketplace.

First published-NZ Herald 4th October 2016

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