Angel Association Award Winners Announced

The Angels Association of New Zealand held its annual summit last week. Matū was well represented with Greg Sitters, Ken Erskine, and Andrew Chen from the staff team attending, as well as Dana McKenzie and Suse Reynolds from our Investment Committee, and Bridget Unsworth from the Commercial Advisory Board.

A big congratulations to our good friend Katherine Sandford for winning the Puawaitanga Award for her leadership and support as the investor-director chair of UBCO, a Tauranga-based company developing and selling electric motor bikes.

Scott Gilmour was recognised as Arch Angel for 2019, having been a critical and foundational part of the ICE Angels and broader NZ angel community. Suse Reynolds was surprised with the Kotahitanga Award for building unity and developing a shared sense of working together, building and strengthening the angel community into something much bigger. She has been a leader in the early-stage angel investment and start-up ecosystem for over a decade, and we are very happy that her efforts have been recognised.

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Maximising the output of New Zealand’s early stage industry

This is the third article in a series by our Research Intern, Odette Lees. The second article, “Increasing the Available Capital in New Zealand”, is available here:

New Zealand is a small nation with a burgeoning and growing start-up industry1. Despite steady growth, the early-stage ecosystem in NZ is still young and is in what can be described as the ‘Activation’ phase2. This is the earliest of the four phases of maturity described by the Start-up Genome reports, with the other phases being globalisation, expansion, and integration. The key characteristics of an ecosystem in the activation phase are having fewer than 1000 start-ups, resource gaps, and limited local experience.

New Zealand’s early-stage ecosystem has all three of these characteristics; we have an estimated 400-600 start-ups3, a gap in Series A funding has been well-acknowledged4,5, and our young industry means that interconnectedness and knowledge sharing between the stakeholders in the early-stage community is still developing. Closing funding gaps and encouraging knowledge-sharing are crucial factors to further the ecosystem and allow it to mature into a more productive industry. Addressing these problems encourages growth ofthe number of start-ups in New Zealand. Connectedness, experience and adequate funding contribute to the success of companies, which in turn can allow for more exits to occur. The key stakeholders from these exits can return back to the ecosystem6, build up new companies and share their learnings, thus increasing the experience of the overall industry and the number of start-ups in it.  

Our blog posts have previously identified ways to address funding gaps in the early-stage ecosystem7, and this provides ways to address one of the key hurdles to ecosystem growth. Increasing the interconnectedness of the early-stage ecosystem is the other critical hurdle to address, as over 55% of start-up founders have no prior experience before launching their business8. There are three aspects of ‘connectedness’ that can be targeted. These are:

  • networks between founders and entrepreneurs
  • relationships between key stakeholders in the early stage space e.g. investors, advisors, entrepreneurs, customers etc.
  • a general sense of community between all the players in the industry which facilitates overall transfer of knowledge9.

Solutions to address all of these aspects of connectedness already exist in New Zealand. The question is whether they are sufficiently addressing this issue and if we can do more to encourage it. A visible lack of diversity in the early-stage investment space is a clear sign that this community is not open enough to include and represent all New Zealanders. Basic research on ‘start-up help’ or ‘support’ yields many government funding resources but very little coverage of any non-monetary support or networks. Co-working spaces, incubators, and technical hubs provide a physical space for people to collaborate, share ideas and build support networks between entrepreneurs at those locations as well as access to key stakeholders. These exist across the country and are known to people who are well-ingrained in this industry. Part of the problem is that new founders with no prior experience are often not aware of these resources or perceive a high cost barrier.

A more accessible alternative to physical spaces is virtual networks and guidance. Websites like Scale Up NZ ( are a good start to fill this space by acting as a way of linking up companies to investors and physical resources. Building and broadening these virtual resources to encourage the sharing of knowledge and build an ecosystem-wide community is the next step. Virtual resources provide the lowest barrier to entry for new entrants into the early-stage industry and their potential utility is large.

Rather than expecting people to independently navigate this secretive and sometimes closed off world, efforts at both the organisational and individual level need to be made to open up the industry. Physical hubs, incubators, and accelerators can make themselves more accessible to the public with open days and information evenings, while individuals can contribute by taking the time to inform those around us about this industry. Virtual meetups and forums would allow for a diverse array of people to learn from each other and share ideas. In addition, organisations can actively educate people through workshops and seminars. This allows for people to receive necessary and targeted training for them to manoeuvre through the different parts of this ecosystem. The incentive to focus on building a community is that with an increase in efforts, New Zealand has the potential to become an ecosystem that fosters and attracts the best talent, both nationally and globally, thus encouraging the formation and success of more start-ups.

Efforts towards growing the early-stage industry in recent years have generated success and, while this shouldn’t be discounted, we can always strive to do better. We have the available resources, but we must ensure that they are being utilised to their full extent to address the key limitations of the industry. It is when we focus on addressing these systemic issues that we will be able to maximise the output of the early-stage industry in New Zealand.

1 Matū’s own research acquired from Young Company Finance and New Zealand Private Equity and Venture Capital Monitor Reports 2008-2018
2 Startup Genome, “Global Startup Ecosystem Report 2019.”
3 Startup Genome, “New Zealand Startup Ecosystem Analysis.”
4 Lees, “How Big Is New Zealand’s Early-Stage Funding Gap?
5 Ruth, “Venture Capital Funding Gap Is Real – David Parker.”
6 Callaghan Innovation, “Growing the Pie: How Entrepreneurs Are Creating a Better NZ.”
7 Lees, “Increasing the Available Capital in New Zealand.
8 MYOB, “State of Startups Report.”
9 Startup Genome, “New Zealand Startup Ecosystem Analysis.”

Velocity $100k Winners Announced

Congratulations to the five winning teams from the Velocity $100k challenge – Greenshell Spat Co, SpinPoi, Pacific Med Tech, Luxor Astronautics, and RAVE. Matū staff have seen most of these projects through Return On Science and Momentum, so we know first-hand just how passionate and capable these young founders are. We wish them all the best as they enter the VentureLab incubator at the University of Auckland in 2020!

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Blackbird Arrives in NZ in Style with #Sunrise2019

Blackbird Ventures, a venture capital fund based primarily in Australia, has just opened their Auckland offices last week. This was alongside a successful Sunrise event that attracted hundreds of founders, investors, and other stakeholders in the early-stage investment space.

With their founder-focused investment strategy and community approach, Blackbird brings a new voice and style to the NZ market. Their strong values statements make it clear that they put people first, think in the long-term, and comfortable with high-risk: all values that we at Matū support as well. We think it will be really helpful to add a strong voice in the ecosystem around actively guiding, mentoring, and supporting founders.

The Sunrise summit itself on Oct 25th was a clear representation of those values. The team from Blackbird didn’t spend much time talking about their fund or making big announcements – they mostly got out of the way and let a group of founders tell their stories and share their lessons. The program was very well structured, showcasing a variety of founders and experiences.

The morning started with Melanie Perkins from $3.2 billion unicorn Canva, talking about the rollercoaster journey from working out of her mum’s lounge to a company with 700 employees. She conveyed two key messages – fight through the rejection that will inevitably come along the way, and dream big and far so that you have something to strive towards.

Other speakers included Brianne West from environmentally-conscious and socially sustainable personal care company Ethique, Shama Lee from alternative meat company Sunfed Foods, and Tama Toki from Great Barrier Island-based cosmetics company Aotea Made.

The formal part of the program closed with a gripping story from Jodie Fox, co-founder of personalised/customised fashion company Shoes of Prey, which went into liquidation last year after nine years of operation and at one point reaching a valuation >$100mil. For an industry that suffers from strong survivor bias (i.e. we only hear the good stories about entrepreneurship), it was a tough story to share but incredibly valuable for everyone to hear that these things happen and how it happens. Huge kudos to Jodie for bravely sharing her journey publicly – she has written a book to tell the story. My main takeaway was that there is a right way to close down a company, which starts from building a really strong culture of respect years beforehand. Without that sense of community and loyalty, the process of closing down a big company would have been much, much harder.

Apart from the speakers, the other really valuable part of the day was structured networking. People were able to make bookings beforehand based on short bios that attendees provided online, which meant that we didn’t have to just go up to someone and try to strike up a conversation. We met a bunch of founders throughout the day who were interested in Matū’s offering, and we will be keeping track of these various projects and giving our support where we can.

We often think of the New Zealand early-stage investment community as being “small”, but events like Sunrise remind me that “tightknit” and “connected” are perhaps better descriptors. There are thousands of people involves in this space, which may be small in comparison to some places overseas, but it affords us a sense of collegiality that helps us work together and build towards collective success. We at Matū are always happy to help wherever we can within our means, so get in touch!

The Emergence of Revenue-based Venture Capital

An interesting article on Entrepreneur magazine about the rise of revenue-based VCs, who are making a larger number of smaller bets based on the current revenue of the companies. They’re mostly targeting SaaS or similar industries with well-understood business models, where gaining a decent amount of revenue derisks most of the business and the rest is about having lots of capital to fund marketing as the company enters the growth phase. We’re starting to see a little bit of this thinking appear in New Zealand, which will mean more companies getting funding once they have shown that their business model is viable at a small scale.

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Student Entrepreneurs at Canterbury win $85k in prizes

Congratulations to the winners of the University of Canterbury Entré challenge, with $85k worth of prizes awarded to a range of students and companies. Really interestingly, there are three joint grand prize winners, with some very cool ideas in the mix.

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Investment #4: PowerON

We are proud to announce that we have placed investment into PowerON Limited alongside our syndicate partners.

The IP Group plc, the University of Auckland Inventors Fund and Matū Fund have together invested in a spin-out from the Auckland Bioengineering Institute at The University of Auckland.  POWERON Limited utilises the unique capabilities of dielectric elastomer technology to develop customisable, soft and flexible switches, actuators and logic capabilities for use in a variety of applications, from simple direct limit switches to distributed intelligence, lifelike soft-robotics and collaborative robots.

About IP Group plc – IP Group is a leading intellectual property commercialisation company focused on evolving great ideas from its partner universities into world-changing businesses. The Group pioneered a unique approach to developing these ideas and the resulting businesses by providing access to business building expertise, capital, scientific insight and the supporting infrastructure. In Australia and New Zealand, IP Group works in close partnership with the Go8 Universities and The University of Auckland to identify ground-breaking technologies, rooted in hard science, which have the most promising commercial potential. IP Group, which is listed on the Main Market of the London Stock Exchange under the symbol IPO, has a strong track record of success and its portfolio comprises holdings in early-stage to mature businesses across life sciences and technology.

About The University of Auckland Inventors Fund – The University of Auckland Inventors Fund is an evergreen, open-ended $20 million investment fund owned and managed by Auckland UniServices Limited, the commercial company for The University of Auckland.  The Inventors Fund provides seed-capital for ventures started out of the University of Auckland.

About Matū Fund – Matū is a venture capital fund investing in early-stage science and technology commercialisation from education and research institutions and the private sector. As an open and evergreen fund, Matū takes a long-term investment view and is aimed at turning ground-breaking ideas into globally focused, IP-rich companies. Matū provides intelligent capital with active governance, executive management, operational support, and mentorship for founding and executive teams.

Increasing the Available Capital in New Zealand

This is the second article in a series by our Research Intern, Odette Lees. The first article, “How Big is New Zealand’s Early-Stage Funding Gap?”, is available here:’s-early-stage-funding-gap?/

It is no secret that many New Zealand start-ups have found themselves deep in the “valley of death”, struggling to find the critical capital needed for them to grow and launch themselves out of this position1. This well-known struggle can be partially put down to a gap in available funding for these companies, a gap which has remained steady despite the growing innovation occurring in NZ.

Angel investors and early-stage Venture Capital funds have successfully funded hundreds of start-ups in recent years. However, when the needs of these companies outgrow the capabilities of investors they hit a wall. There are few VC funds with the capabilities to fund a complete series A round on their own, and with rounds ranging between $1.5-15 million2, there are few companies that can currently receive this funding locally.

We have previously identified that over the next 5 years we can expect to see the size of the funding gap shrink significantly. However, this can only occur with the right industry conditions and there is little room for industry change to occur. Scalable, long-term solutions need to be considered to prevent the gap from widening in addition to the interventions over the next 5 years. Below, three potential sources of capital have been identified which could help to support the growing start-up industry in New Zealand. It is important to note that multiple contributions will be needed to keep up with this dynamic industry; no singular solution alone will be enough to solve this on-going problem in its entirety.

Superannuation Funds and Government Incentives

New Zealand’s early-stage capital market is in what can be described as an ‘Activation’ phase3. This means that the ecosystem is steadily growing, but in order to progress into a more advanced phase, we need to make sure we can tap into our local resources effectively. A way of doing this is to ensure that our government can help to fill funding gaps and has set up structures to encourage local investor expertise. The government’s $300m market intervention, called the Venture Capital Fund (VCF), which was announced in the 2019 Wellbeing budget4 is certainly a good start to this.

The Venture Capital Bill has subsequently been created to manage the deployment of the $300m VCF. This money will only be placed into other VC funds, not directly into companies. Furthermore, the VC funds who receive this money are required to match the funding received and place 75% of their total funds (not just the VCF funding) into Series A and B deals of New Zealand companies. The remaining 25% of their funds can be invested however the fund chooses i.e. into seed deals, or non-New Zealand-based companies5. This will have a direct impact on the current gap seen in available funding for Series A+ deals and contribute to the predicted shrinking of the gap over the next 5 years.

The source of the intervention has been a contentious issue; for those who are unfamiliar, $240m will be provided by the Guardians of New Zealand Superannuation Fund and the remaining $60m from the New Zealand Venture Investment Fund. The argument against this move is that our pension funds shouldn’t be wasted on such risky investments. However, other countries with more developed investor markets utilize pension and super funds at a much higher rate. For example, in Europe in 2018, pension funds constituted 31% of total capital raised by funds, and sovereign wealth funds contributed a further 9% of that total capital raised6.

Furthermore, historical data from around the world shows that on average, private equity earns higher returns that the stock market7. In NZ, historical mean returns of private equity (33.7%8) are almost triple that of the stock market (10.75%9). It makes sense to utilise the huge pools of money that superannuation funds maintain (the NZ Superannuation fund manages $41.2b). While it is not suggested that the super fund invests all of its money into early stage companies, the $240m contributed towards the market intervention will make a sizeable contribution to closing the gap and is only about 0.5% of their total managed capital. Another example of a large pool of resources is the ACC fund, which manages $4b and has engaged in later stage investments (such as Rocket Lab’s US$140m Series E round in 2018), but has yet to dip its toes in to earlier-stage ventures.

International Funding

This is already a fairly regular occurrence in NZ and therefore the most familiar. An estimated 37% of the start-ups funded since 2017 have had contributions from international VC funds or angels, and this capital has been relatively evenly distributed among Seed, Series A+, and exit stages of investment. More international investment at the Series A+ level could help companies grow faster than if they waited for local investment. However, the problem that can occur with encouraging this is that these companies are often pressured to leave NZ and establish operations in the country of the investor.

International funding is not all negative however; overseas investors have access to new networks of people, different markets and connections. For some companies, this is exactly what they need to succeed10. It is a balance between allowing companies to go off-shore if they need to and making sure that we can keep as much of the benefit locally as possible.

Several international funds, particularly a few from Australia, have indicated that they will be setting up offices in New Zealand. These funds will utilise their large access to capital to focus specifically on NZ investments while they’re here which brings confidence of increased capital flow from overseas. Because the capital will be based locally, it could capture some of those companies who are currently following money overseas.


Syndication is not necessarily a way of increasing the total available capital, but it can help increase investment activity by reducing the financial risk for each individual investor. Reducing the amount of capital required to participate in an investment round also enables more parties to participate. This encourages investors to make more investments, and thus gets more money into more companies. It also helps increase the company’s exposure to expertise and support11.

In New Zealand, syndication is not a new concept; based on Matū’s analysis of funding activity, almost all of the financings in the last two years have been syndicated with at least two sources of money. It is common overseas for VC funds to form syndication partnerships where the same funds will syndicate together on numerous deals.

However, strong partnerships where the same funds invest together repeatedly are still forming in New Zealand. Time will tell if these partnerships will allow for more successful investments and larger deal sizes, and whether or not investors can remain significant shareholders over multiple rounds of follow-on investment. Something we expect to see is that as the parties form relationships and trust each other more and more over time, rounds can be filled and closed more quickly, allowing companies will be able to get back to their core business instead of raising capital.  

These potential pathways for generating the capital needed by growing start-ups are just some of the ways which could help to decrease the funding gap. With time, and the right measures at both a government and industry level, we will hopefully see more companies succeed in New Zealand.

Matū is a venture capital fund that targets very early-stage science and technology projects being commercialised out of research institutes and in the private sector. Following the principle of mohiotanga, we seek to share insights from our research where possible, in order to build on the knowledge already in the community and help enable people to act.

1 “How Kiwis’ Preference for Property Is Starving Our Startups,” The Spinoff (blog), March 28, 2019,

2 Matū’s own analysis based off Series A raises from 2017-2019

3 Startup Genome, “New Zealand Startup Ecosystem Analysis,” 2017.

4 New Zealand Treasury, “The Wellbeing Budget 2019,” 2019,

5 Simmonds Stewart, “Venture Capital Fund Bill,” September 6, 2019,

6 Invest Europe Research, “European Private Equity Activity Report 2018,” May 3, 2019.

7 Kenneth M. Freeman and Leonard A. Batterson, “Why Should You Invest in Venture Capital?,” in Building Wealth through Venture Capital, 2017, 23–34.

8 Aaron Tregaskis, “New Zealand Private Equity Returns 1994-2012” (New Zealand Venture Investment Fund, November 2012).

9 Bart Frijns and Alireza Tourani-Rad, “The Long-Run Performance of the New Zealand Stock Markets: 1899-2013,” Pacific Accounting Review.

10 “Mind the Tech Sector’s Funding Gap,” Newsroom, November 7, 2018,

11 Mike Wright and Andy Lockett, “The Structure and Management of Alliances: Syndication in the Venture Capital Industry*,” Journal of Management Studies, December 1, 2003.

Matū Ethical Investment Policy

We are proud to release our Ethical Investment Policy today. After several months of development and consultation with all team members, we have formed a principles-based policy that gives everyone in Matū a common framework for ethical investment.

We have also defined specific exclusions for areas that we won’t touch, and explicitly acknowledged grey areas and unpredictability that will be common amongst early-stage companies. The policy empowers the independent Investment Committee to make decisions about investment and divestment for our fund on an ethical as well as scientific and commercial basis.

Read the policy here: