NEW FUNDS & FUNDRAISING
Government funding for deep-tech venture fund
Government-funded New Zealand Growth Capital Partners (NZGCP) is to commit up to $NZ25 million to Wellington-based venture capital firm Movac’s Emerge Fund 4.
The fund has achieved a first close of $NZ30 million and is targeting a final close of $NZ50 million by the end of the year.
Emerge Fund 4 is a deep-tech fund managed by Movac partner David Beard.
NZGCP has committed an initial $NZ15 million from its Elevate fund-of-funds vehicle and will increase that to $NZ25 million if the Emerge Fund reaches its target of $NZ50 million.
David Beard’s deep-tech investment track record includes guiding to successful exits Aroa Biosurgery (ASX: ARX) − which listed on the ASX in 2020 − and PowerbyProxi − which was acquired by Apple in 2017.
NZGCP chief investment officer James Pinner said: “Supporting more New Zealand deep-tech investments is a focus for NZGCP and we are excited to support the establishment of Movac’s new deep-tech fund with such an experienced and successful investor at the helm. This new deep-tech focused fund complements Movac’s existing fund activities and leverages the skills and experience of the broader Movac Group.
“While sectors like software have been raising capital with relative ease in recent years, deep-tech and emerging technologies still face a capital gap at the early commercialisation stage. Developing New Zealand’s depth and expertise in this part of the early-stage investment sector will help transform great science into successful technology companies.”
If the full $NZ25 million is invested, Elevate will have contributed $NZ223 million into nine venture capital funds, each of which has also raised significant private capital. At the final close of Movac Emerge Fund 4, the total raised by these funds is expected to exceed $NZ750 million.
Beard said that, with Emerge Fund investment team members Cassie McAdams and Rob Shaddock, he was already looking at a healthy pipeline of potential investments for Emerge Fund 4.
“Our mission is to identify and invest into deep-tech start-ups covering various thematics including − but not limited to − hi-tech manufacturing, biotechnology, medtech, cleantech, food security, AI/automation and productivity technology, who use ground-breaking science and engineering to solve global issues,” he said. “We have been very successful in the past in helping to turn New Zealand innovation into highly successful companies.
“The success of this fund will also be great for the wider ecosystem. Start-ups create a significant number of high-value jobs, as well as a strong economic and export value − while capitalising on existing public investment into research, science and innovation − to help diversify our economy.”
Assuming NZGCP invests $NZ25 million in Movac Emerge Fund 4, the Elevate fund-of-funds will still have $NZ50m of its current capital to invest. The eight funds in which Elevate has invested so far have made more than 100 investments to date including in: Dawn Aerospace, Mint Innovation, Partly, Halter, Foundry Lab, Quantifi Photonics, Alimetry, Zenno Aeronautics and OpenStar. Each of these underlying funds still has capital to invest.
The New Zealand government established Elevate in 2020 as a $NZ300 million fund-of-funds program to fill a capital gap for high-growth New Zealand businesses at the Series A and Series B fundraising stages. The fund is managed by NZGCP with oversight from the board of guardians of sovereign wealth fund the New Zealand Superannuation Fund.
Image: Wireless power transfer technology developer PowerbyProxi was a successful deep-tech investment by Movac.