NZVIF stumps up $20M in PayPal founder's NZ venture capital fund

Thursday 22nd March 2012

The New Zealand Venture Investment Fund, the government funded venture capital investor, has committed $20 million to PayPal founder and Facebook board member Peter Thiel’s local venture capital fund.

Valar Ventures LP has raised $40 million, half of which came from NZVIF, $5 million from local investors including Wellington-based Rangatira and remainder from American billionaire Thiel. The fund will provide growth capital to early-stage local technology companies for research and development and funding expansion into export market.

“Over the last several years, New Zealand has been nurturing more early-stage tech companies,” Thiel said in a statement. “I’m delighted that the government’s New Zealand Venture Investment Fund is partnering with Valar Ventures to enable more of them to expand and compete on the global level.”

Valar Ventures looks for start-up companies outside the US and acts as an early-stage capital investor with a focus on long-term growth opportunities, according to its website.

NZVIF chief executive Franceska Banga said the partnership will open up opportunities for local web-based companies to break into the US, where Valar Ventures’ networks are significant.

“Their team has been through every stage of the start-up process, from inception to IPO (initial public offering), and they have the financial resources to fund companies throughout their growth stages,” she said.

Thiel started investing in New Zealand in 2010 via Valar Ventures, building stakes in Xero, the NZX-listed cloud-based accounting software firm, and Pacific Fibre, which wants to build a second internet cable linking New Zealand to the rest of the world. Valar Ventures also cites Auckland-based Booktrack, which creates soundtracks for e-books, as another investment.

Clarium Capital, Thiel’s San Francisco-based hedge fund, last year indicated it would invest more heavily in tech companies and private equity after shedding some 90 percent of its assets from a peak above US$7 billion in mid-2008 when it made losing bets on oil prices, currencies and stocks, Bloomberg reported.

Economic Development Minister Steven Joyce said the fund will open access to international markets for local businesses, and the investment is part of the government’s plan to revive the economy.

BusinessDesk.co.nz

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