News

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.

Read more here: https://www.angelassociation.co.nz/angel-awards-announced-suse-reynolds-katherine-sandford-and-tim-allan-recognised/ and https://www.angelassociation.co.nz/scott-gilmour-named-new-zealand-arch-angel-2019/

Solar Concentrators at VUW

The Spinoff has covered Nate Davis’s laboratory and the solar concentrators they are developing, which may revolutionise solar electricity generation by diffusing light sideways efficiently. This would allow for photovoltaic panels to be embedded in all sorts of places, like in the sides of windows with the light being distributed to the sides of the pane of glass. By significantly reducing the land cost of solar electricity generation, and also supporting distributed generation, this technology could significantly disrupt the way renewable energy is generated in the future.

Read more here: https://thespinoff.co.nz/science/05-11-2019/how-to-make-solar-electricity-cheap-move-light-sideways/

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: https://matu.co.nz/2019/09/increasing-the-available-capital-in-new-zealand/

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 (https://www.scaleup.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!

Read more here: https://www.cie.auckland.ac.nz/newsroom/2019challenge/

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.

Read more here: https://www.entrepreneur.com/article/340384

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.

Read more here: https://www.canterbury.ac.nz/news/2019/85k-in-prizes-awarded-to-entrepreneurial-students.html

To beat climate change, we must look at ourselves

A great article from Prof John Hosking, Dean of the Faculty of Science at the University of Auckland, discusses how scientists both call for carbon reduction to fight climate change, while also having above-average levels of carbon production. It may make our lives more inconvenient, but we must look introspectively and understand our own behaviours in order to beat climate change.

Read more here: https://www.newsroom.co.nz/@ideasroom/2019/10/01/835757/the-carbon-footprint-dilemma-of-an-nz-scientist#

UoA signs MOU with AIST in Japan

Auckland UniServices has signed a Memorandum of Understanding with the National Institute of Advanced Industrial Science and Technology (AIST) in Japan, developing new technology innovation opportunities.

The agreement encourages technological co-operation in robotics, artificial intelligence, advanced materials, and energy. Prime Minister Jacinda Ardern was in attendance at the signing on September 20th.

Read more here: https://www.uniservices.co.nz/node/841