Wednesday 20th January 2016
|Text too small?|
The New Zealand Venture Investment Fund has committed around $11 million to become a cornerstone investor in a new joint New Zealand-Taiwan venture capital fund, the Global from Day One Fund 11.
The technology-focused, 10-year fund has raised more than $30 million including $11 million respectively from NZVIF and its Taiwan counterpart, the National Development Fund, and is targeting a total of $45 million.
It has been set up by investors from Auckland early stage fund Sparkbox Ventures and Taipei-based early investment fund Pinehurst Ventures who were previously involved in the first Global from Day One which focused on seed investment.
With a rise in angel investors providing seed investment for early stage start-ups, the new fund is styled on a Silicon-Valley micro VC fund, targeting high growth technology companies in New Zealand and Taiwan at the next level up for Pre-Series A and Series A funding of between $250,000 and $1.5 million.
Fund manager Chinataka Ranatunga said the idea was to help grow start-ups to a level where they could attract US and Asian venture capital interest for series B funding at around the $10 million mark.
The first investment has already been made in an Auckland-based software company that he wouldn’t name at this stage and the fund hopes to make a total of 20 investments.
Ranatunga said the focus will be start-ups who are exporting and technology companies with a software-as-a-service model which New Zealand had built capability in among software developers and entrepreneurs, partly due to Xero’s success.
“Kiwi enterprise and software development companies can compete on a global scale. For consumer companies it is a lot tougher because New Zealand has such a small domestic market,” he said.
A portion of the fund will go towards start-ups using Taiwan as a springboard for growth into Asia and the terms of NZVIF’s commitment requires at least half the fund to be invested in New Zealand high-tech companies.
Outgoing NZVIF chief executive Franceska Banga said when the fund closes it will be the first new venture capital fund for a year and fills a gap in the New Zealand market for funding Series A opportunities.
“It is a welcome addition to the growth stage investment sector and it is the 11th venture capital fund established with NZVIF as a cornerstone investor,” she said.
The New Zealand Seed Co-Investment Fund was a cornerstone investor in the first Global from Day One fund which has nearly fully committed its near-$3 million funding by investing in 14 Kiwi companies.
Ranatunga said it's anticipating its first exit this year with the sale of one of the companies to a US buyer and the fund’s internal rate of return so far has matched US peers.
No comments yet
MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite