Software the top sector for NZ angel investors

More than half the investment made in early stage companies in New Zealand last year was in the software and services space (53.8%), followed by 17% in technology hardware and equipment.

“Technology is increasingly the engine of growth for all companies, regardless of size” explains PWC’s Anand Reddy.

“It’s no surprise that it’s these areas where the most activity is happening and where angel and early-stage investors are putting their energy. This reflects global trends too. Data generated by Crunchbase notes that the software and services remains the dominant sector for investment.”

Speaking personally, John O’Hara said that his own portfolio leant towards software generated ventures.

“I am particularly proud of Ask Nicely, which produces software for NPS (net promoter score) collection and analysis. This company has already generated tangible returns for a number of the early angel investors. The company is now scaling into the US, with the founder moving to Portland, Oregon in the last couple of months.

“New Zealanders have a knack for practical problem solution and we are increasingly seeing them turn this knack into compelling business opportunities,” said O’Hara.

Click here to find out more about how the startup sector is evolving, and where it’s heading next.

Click here to dive into the data about this asset class.

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Global domination predicted for Rockit

Rockit apples could become a staple snack worldwide, says Rockit Global chairman John Loughlin.

The company was named ExportNZ Hawke’s Bay’s ASB Exporter of the Year last week, also winning won the Napier Port Industry Trail Blazer Award.

“We have a little apple with huge sweet taste that stores and never fails to impress people as a snack experience and a great fruit experience,” he said.

He said New Zealand was responsible for what was probably the greatest modern innovation in fruit, the gold Kiwifruit.

“Our ambition is to put Rockit apples right up there with them.”

He gave tribute to the vision and drive of founder Phil Alison to establish the product and the contribution of angel investors and the Rockit team in Havelock North. The investors contributed “enormously” with strategy, marketing, growing and the intellectual property aspects of the business.

“We have had a great team of people that have been through a lot and contributed enormously from orchard to pack house to market.

International partners were also growing the apple variety which Rockit Global wished to market on their behalf.
“We are not finished yet. This has the potential to be something really special and it is fantastic to be recognised so early in our journey.”

Few in Hawke’s Bay have a track record such as Mr Loughlin, giving weight to his prediction that Rockit is a global game changer. Food industry companies dominate his extensive governorship record. Chairmanships include Zespri Group, EastPack, Firstlight Foods, Allied Farmers and Hawke’s Bay Winegrowers.

Directorships include Napier Port, AgResearch, New Zealand Meat Producers Board and NZ Lamb Company (North America).
In his executive career he was Richmond’s chief executive for five years, leaving in 2002 before it was taken over by Dunedin-based PPCS (now Silver Fern Farms).

With wife Kathryn, he established Askerne Estate Winery.

Pockit apples are slightly bigger than a golf ball, sweet flavoured with a strong red colour and marketed in plastic tubes. The variety is a product of Plant & Food’s Havelock North-based cross-breeding programme, started by the late Dr Don Mackenzie and developed further by Allan White.

First published in NZ Herald – 4 July 2017

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Capital Markets Report: Face the fear of missing out

New Zealand companies often have to look offshore to access the funds and networks they need to scale internationally. Two of them, Booktrack and Vend, have attracted much-needed capital. James Penn asked their founders about the state of international investment for high-growth Kiwi companies.
Aucklander Paul Cameron founded Booktrack along with his brother Mark Cameron in 2011. Booktrack’s technology allows soundtracks to be added to e-books to create an immersive reading experience.
Since launching they have secured investment from some of Silicon Valley’s most high profile figures, including PayPal co-founder Peter Thiel, and Mark D’Arcy, a Vice-President at Facebook.
Vaughan Rowsell is the founder of Vend, a rapidly-growing retail software company. Thiel has also invested in Rowsell’s company, and in December Vend raised $13 million in capital to fund their international growth. That raising included investors such as Square Peg Capital, Movac, and Sam Morgan’s Jasmine Investments.
Herald: When you sought capital investment in the United States, what were the drivers of that decision?
Paul Cameron: To help build networks in our target market.
Local investors opened up their networks to us and this enabled Booktrack to accelerate our business in the United States.
Vaughan Rowsell: As a SaaS (software as a service) company with a global footprint, we looked to the United States for capital, in particular Silicon Valley, because there is a deep capital pool looking to fund exactly our profile of business. We spoke to many Silicon Valley venture capitalists and ended up being funded by the overseas investment arm of one of the great Valley investors, Valar Ventures, which actively looked for New Zealand businesses to fund.
Herald: What challenges have you faced when raising capital in the United States as a New Zealand company?
Vaughan Rowsell: The biggest challenge is that United States venture capitalists (VCs) are not used to working with the risk profile of New Zealand companies — we are a 12-hour flight away, speak differently, have a non-American culture towards sales and marketing, and an alien legal structure to the companies they are used to investing in.
United States-based VCs rarely deviate from their hypothesis on what a great business for funding looks like, which is formed with United States-based companies in mind. When you have geography, culture, a new legal system and other things in the mix, and it comes down to comparing apples with apples, New Zealand companies have a bigger hill to climb.
I don’t mean to say it doesn’t happen or won’t happen, it’s just a system that is harder for us.
If you are willing to be United States headquartered or have a United States executive team, I am sure it would be different. For us, staying Kiwi has always been important so we have secured investment from outside of the United States.
Paul Cameron: Investing in a New Zealand entity can be challenging for a United States investor as New Zealand is not only geographically a long way away, but they also do not understand the foreign tax implications. Having a friendly capital gains structure in New Zealand helps with the tax issue (but still needs some explaining), and setting up your business in the United States and being there all the time provides assurance on the geographic issue.
Herald: What strategies have enabled you to be so successful in attracting capital from high-profile United States investors?
Paul Cameron: Being there, all the time. We only attracted investment from United States investors after spending a long time in the market building networks and understanding the local market. The Kiwi Expats Association (Kea) was a great resource to connect us with New Zealanders in the United States who had great networks. It is important that New Zealand entrepreneurs remember that our cultures are different even though we both speak English and watch the same TV shows. I once observed a New Zealand entrepreneur in the United States mistake a conversation on the Warriors to be about the New Zealand rugby league team and not the Golden State Warriors basketball team. New Zealand entrepreneurs need to think, act, and be local if they are going to attract US capital. That takes a lot of time and commitment.
We need to put more energy into making local investment dollars work for our tech sector versus cows, anti-personnel mines and property. We need to be able to tell dozens of high profile New Zealand success stories.
Vaughan Rowsell
Vaughan Rowsell: A few years ago we secured funding from Valar Ventures which is Peter Thiel’s vehicle to fund non-American businesses, and that immediately overcame the hurdles for us that you get with most other United States investors. They had the great idea that some of the world’s best companies will come from outside the States, and we are honoured to have been picked.
Herald: In your opinion, should more New Zealand companies be looking to the United States when embarking on seed and Series A capital raises?
Paul Cameron: The first question any New Zealand start-up trying to raise funds in the United States will be asked is “how much have you raised in New Zealand?” And then “why are you raising this round here and not in New Zealand?” New Zealand companies need really good answers to these questions if they have any chance of raising US capital. We New Zealanders sound and look funny to US investors, and while it might be cute, it is a super-competitive market for capital in the United States. New Zealand companies, especially at the seed stage, should always be raising in New Zealand unless they are already established in the United States, and have a good strategic reason to be seeking funds in the United States over New Zealand. Series A is a more likely stage to be approaching US investors for capital, but I would still try in New Zealand first as there are great funds like Sparkbox Ventures always on the look out for good deals.
Vaughan Rowsell: My advice to younger companies looking for capital is to look local, or at least over the Ditch. There is an emerging Australian Angel/VC base growing and a few New Zealand companies are finding success with them which is really exciting. Companies can also consider Singapore, but the further you need to fly the greater the pull will be to base yourself closer to the venture capitalist’s postcode. There are always exceptions to any rule, and for us that is Point Nine Capital, based out of Berlin, who again deviate from the usual profile of venture capital. They actively seek investment in world-class SaaS companies all over the globe, and have been very successful at that. It is my hope that more US investors start to follow Valar and Point Nine’s footsteps when they try and answer their own question, “Why are there so many damn world-beaters coming out of New Zealand?”
Herald: Is there more that our public and private financial sectors should be doing to ensure New Zealand companies can access US capital?
Paul Cameron: They already do a lot more than most people realise. Our Seed, Angel, Venture Capital and Private Equity funds and groups are well networked in the United States and leverage those networks for their investee companies. The Government, through NZTE, (NZ Trade and Enterprise), Mfat (Ministry of Foreign Affairs and Trade), Callaghan Innovation and Ateed (Auckland Tourist, Events and Economic Development) have vast investment networks that are working everyday to connect New Zealand companies with US capital.
Vaughan Rowsell: We attract attention by being awesome. It’s all a numbers game. If United States VCs feel like they are going to miss out on opportunities to invest in great companies that originate from New Zealand, then they will come here and invest.
In the meantime, we shouldn’t just wait and hope that happens. We should be doing all we can to help the current and future cohorts of amazing New Zealand businesses going global to make a dent and get noticed. The more successes we have as a nation in creating world-beating companies, the more attention we will get from the United States VCs and the rest of the world.
Herald: How do we do that?
Vaughan Rowsell: It’s a 15-year strategy. There is no silver bullet. Firstly, success in the industry begets success, so we need to do what we can locally to support the next Xero, Vend, Orion or Trade Me. We need to put more energy into making local investment dollars work for our tech sector versus cows, anti-personnel mines and property.
We need to be able to tell dozens of high profile New Zealand success stories. The importance of these stories are to inspire new people into starting businesses because they see how others have done it, and can literally sit down with the founders of companies making it and get advice. The stories also inspire future talent to go into technology careers and create the talent pool.
Herald: Are there any other important messages we should be sending regarding US capital investment in New Zealand?
Paul Cameron: There is plenty of capital in both New Zealand and United States for good Kiwi companies. For US investment, it really just comes down to the company strength, having great people involved, and a commitment to the United States market. Simple.
Vaughan Rowsell: Really simplistically, there are two choices: match the profile that United States investors look for in US companies, which often means becoming one and talking American; or decide you are a Kiwi-based enterprise and look to impress people who understand what awesome Kiwi-based businesses look like. In time, I hope FOMO [fear of missing out] brings more US capital to our shores, but in the meantime let’s create the FOMO.
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Skin is the game for Kiwi regenerative medicine spinoff

AUCKLAND: Patients suffering major burns may eventually benefit from the launch of a new regenerative medicine company, Upside Biotechnologies, which is developing an advanced, world-class skin replacement treatment in Auckland.
Regenerative medicine develops methods to regrow, repair or replace damaged or diseased cells, organs or tissues to restore or establish normal function. The global regenerative medicines market is projected to reach US$30 billion by 2022.

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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.

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READY FOR LAUNCH

SHOWCASING INNOVATIVE NEW ZEALAND COMPANIES THAT ARE SEEKING TO FUND THEIR NEXT STAGE OF GROWTH.

The Investment Showcase is a partnership between NZTE and the Angel Association NZ and will be held on the opening night of the 2016 Angel Summit.

Guests include Angel Summit delegates, local and international investors and other key stakeholders in the NZ investment community.

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The face of NZ’s brave business future in the world? Men, men and more men

A recent international “innovation mission” was predictably and overwhelmingly dominated by men. To help organisers remedy such absurd and damaging imbalances, Anna Guenther and Jessica Venning-Bryan have produced a list for next time

A 50-strong trade delegation of New Zealand’s finest innovators and business people headed off recently to Israel. Their plan? An “innovation mission”, to learn from a land that has inspired entrepreneurship on many levels and to share our own knowledge as a scrappy start up nation.

Fifty of our finest: but where were the women? Judging by the NZ Herald story previewing the trip, there weren’t any. While the article was written by a woman, no women were mentioned as being part of the heavy-hitting delegation. (Let’s not even start on why, again, we’re Israel gazing.)

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A young achiever

Orissa born Ojas Mahapatra-led Photonic Innovations featured among top three in New Zealand Awards 2016 Innovation category.

We aim to make the company a world leader in gas leak detection technology in the next five years, he said, adding that the company has recently launched its first gas leak detector Ammonia LD 4000.

Photonic Innovations was among the top three finalists in this year’s New Zealander of the Year Awards 2016 (Innovator of the Year category) and narrowly missed out to the eventual winner. Ojas Mahapatra is a young achiever who moved to New Zealand from Orissa in 2010 for his Ph.D. from University of Canterbury and was appointed the CEO of Photonic Innovations in 2014.

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App developer gains $5m in US funding round

Congrats to StQry Inc – now Area360 – who have raised US venture funding. Terrific to see the acknowledgement they have given to the wider ecosystem including angel investors in their success to date.

Wellington startup Stqry (pronunced “story”) has closed an initial $5.5 million funding round and announced a name change as it expands off-shore.

Now named Area360, the company’s software allows organisations such as museums, art galleries, airports and hospitals to engage with customers through geo-location technology – including beacons, GPS and WiFi – helping them to discover, connect and engage with what’s around them.

The startup was formed in 2012 by Chris Smith and Ezel Kokcu and now counts more than 400 customers worldwide – including Emirates, Te Papa, Seattle-Tacoma International Airport and the Smithsonian Museum in Washington D.C.

Read also:
Mentors help hotelier develop new app
Crimson Consulting flush with new funds

“We started AREA360 to give organisations the ability to enhance their customer experience by providing navigation as well as relevant information and unique opportunities along their path,” Smith said.

“Using beacon and other location data, our platform enables customers to create a broad portfolio of useful services.

“For example, airports can deliver navigation to and from gates, along with a stop at the nearest Starbucks, museums can bring to life that new piece of art by presenting a video on the artist’s inspiration, and an operations manager can track their most valuable assets in real time.”

The funding round was led by US technology venture group Madrona Venture Group and comes as they were expanding their Wellington office and opening their US headquarters in Seattle, Smith said.

Area360 had received support in New Zealand from advisors Gareth Morgan, Dion Mortensen, Alan Gourdie and Sven Baker, as well support from organisations including the Callaghan Innovation, NZTE, Grow Wellington, and the ICE Angels.

“The support from New Zealand’s startup community helped us to thrive and our customer response has been overwhelming,” Smith said.

“We look forward to continuing to grow our business in the US, New Zealand and the rest of the world.”

New Zealand Trade and Enterprise (NZTE) customer manager Mike Evans said the company was a great example of an ambitious New Zealand tech company growing internationally by entering new markets.

“Their partnership with Madrona is an important endorsement of their already considerable success.”

First published on nzherald.co.nz 3rd September 2015

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Boat launcher can help keep marriages afloat: inventor

Remote-controlled device avoids the hot water of loading and unloading vessels

Spend any time sitting at a boat ramp observing the bustle of boaties launching and retrieving their vessels and inevitably, excruciatingly, it won’t be long before something goes awry.

These boat scratching moments are the bane of any owner’s day, but they’re also the motivation behind a Kiwi innovation – the Balex Automatic Boat Loader.

A self-powered, remote controlled device for loading and unloading boats onto trailers, the ABL2500, made by Balex Marine in Tauranga, eliminates the need for manual winches, wet feet and, crucially, requires just one person to get a boat into and out of the water.

The first batch of finished units is due to ship to customers in spring. However, the story of how Balex got to this point began 10 years earlier in the garage of Tauranga realtor Lex Bacon.

Bacon, following a suggestion from his wife that inventing an automatic method of launching and retrieving boats would save many a marriage, spent years building early versions in his shed.

n 2013, mutual interests brought Bacon together with businessman Paul Symes who had just spent eight years in the Philippines building a CAD-based engineering company which he’d sold before returning to New Zealand.

A keen boatie and sailor, he brought his family to the Bay of Plenty and met Bacon and his fledgling automatic boat loader.

Sensing an opportunity to fold his hobbies and his penchant for investment into a single business, Balex Marine was founded in late 2013.

What followed was an intensive period of research and development in the hope of creating a product that Symes believes has the potential to become as commonplace as automatic garage doors.

“I spent the latter part of 2013 doing my own due diligence,” Symes says.

This involved employing product development consultancy Locus Research to conduct market research.

“By late December 2013 we’d brought all of those findings together and ultimately decided to develop, in 20 weeks, an advanced prototype as part of a market validation programme,” says Symes, who put up $300,000 to fund this first phase.

The finished prototype was showcased to the 2014 Auckland Boat Show’s 34,000 visitors.

With an advanced prototype and plenty of market validation under their belts, the company now needed capital.

Government-backed Callaghan Innovation provided about $100,000 to continue the R&D programme and after a successful pitch the Bay of Plenty-based early stage investment group the Enterprise Angels invested $700,000 to get the first boat loaders out the door.

During the Enterprise Angels’ due diligence process another key figure, Paul Yarrall, joined the team. The relationship clicked and in January 2015 Yarrall joined Balex’s board as sales director.

Even as the launch draws nearer, the company is busy preparing for a second, larger round of capital raising. This money will enable the company to set in motion its ambitious plans for a worldwide launch, beginning with Australia, then North America and Europe.

Produced in conjunction with the Angel Association of New Zealand.

Balex Marine
Remote controlled device for loading and unloading boats.
Developed an advanced prototype in 20 weeks.
Received $800,000 in funding and investment.
Planned to launch this spring.

As first published on NZHerald

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Kiwi tech start-up spearheads global smart textile market

Congrats to Pacific Channel for the amazing work they have done to champion this fantastic angel backed company.  Another great illustration of the power of kiwi inspired innovation.

Kiwi tech start-up spearheads global smart textile market with major licensing deal
New Zealand smart fabric technology start-up, Footfalls & Heartbeats announced today the signing of an exclusive ongoing licensing deal with one of the world’s largest medical compression therapy companies, securing its foothold as a key emerging player in the smart textiles market.

The deal ensures significant ongoing funding for growth for the Kiwi company.

Read more on www.scoop.co.nz

 

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