Our portfolio company Ligar Polymers, in conjunction with our partners at Te Whāi Ao Limited, have today announced the launch of The Refinery, a joint venture that will use Ligar’s MIP technology to extract high-value bioactive compounds from Aotearoa plant-based foods and horticulture. The team at Matū are pleased to be involved and providing advice to both Ligar and Te Whāi Ao, and are excited to see the potential for The Refinery grow.
Congratulations to the team at Lanaco for successfully delivering their product to a NASA contractor, where their wool filters will go into NASA’s Orion Capsule that may be carrying people to the moon.
Laura Faulconer from WNT Ventures has written a great blog post detailing some key lessons around negotiating terms for seed-stage deals. It’s natural for founders to be wary of investors and their terms, but it’s important to develop trust and to find investors that you know are looking out for the collective interest of the company and its future. Trust is pretty critical, because once it’s gone it can be very difficult to rebuild – and investors talk to each other.
Vijay Pande and Andy Tran from Andressen Horowitz have penned a piece about the top 16 open problems that they can see in engineering biology, particularly in the pharma space. There are a number of “traditional” methods waiting to be disrupted, from animal testing to computational modelling. Our portfolio company Mekonos is targeting problem #6 – engineering delivery systems.
Read the full article here: https://a16z.com/2020/07/22/16-open-problems-engineering-biology/
Congratulations to the team at Aroa Biosurgery, which is listing today on the ASX with a valuation of AUD$225mil. Originally known as Mesynthes, Aroa has been developing wound dressings and soft tissue regeneration products since 2008. Getting the company all the way through to exit is a huge milestone for everyone involved, with congratulations in particular to Movac for putting a lot of time and effort into guiding and shepherding the company through to this stage.
and the Aroa Biosurgery press release here: https://aroabio.com/blog/news_article/aroa-biosurgery-to-list-on-the-asx-in-225m-ipo
TechCrunch has an interesting interview with Ashmeet Sidana, founder of Engineering Capital, a VC fund in the US that focuses on interesting engineering and technology. There are a lot of similarities with our approach, working closely with research institutions to find interesting science and technology. We do also look at markets and customers though, because sometimes cool technology doesn’t just “sell itself”.
What a difference a week or two makes, to NZ and to the world around us! As we are writing this, the Matū team are in lockdown working from home, but we remain in close contact, supporting each other and our portfolio companies via the use of various online tools and the internet. Business is continuing as normal; this week we have completed a Lean Canvas workshop on a microfluidics project at Massey University, the Return on Science and Momentum Investment Committees are meeting, and we continue with due diligence on a couple of early-stage opportunities.
We are also participating in several industry groups that are advising the government on potential programs and projects to try and keep the research and innovation sector moving in these trying times. The COVID-19 Innovation Acceleration Fund from MBIE has already been announced in the last week to research organisations. We are also in the final steps of completing an investment into portfolio company #5, Ligar Polymers.
While we are now in little doubt that we are in for some pretty challenging times in the coming months and perhaps years ahead, we are confident that the underlying broad strength of the New Zealand economy will see us through. This will definitely create new and disruptive investment opportunities for Matū as NZ and the world has to learn to innovate and use technology on a completely different level. In January, we completed some strategy planning looking at the next couple of years, but we will clearly need to iterate this over the next couple of quarters once things settle somewhat.
In the last two weeks, we have conducted reviews with each of our portfolio companies, with a particular focus on impacts and contingency planning related to COVID-19. Naturally, they are all very busy looking at burn rates, identifying cost reductions where possible, and modelling cashflow scenarios in consultation with financial advisors. Spreadsheets are definitely working overtime! Not unexpectedly, with portfolio staff there are a wide range of emotions and genuine concerns about what the future might hold for them and their families. We are encouraging each team to focus on the things they can control, and continue to move the business forward whilst being very careful to protect cash.
Going forward, we are remaining positive. We remember that we have been through many tough challenges as a country in recent times, including the Christchurch earthquakes and the Mosque shootings.
After the Global Financial Crisis, recovery was in part led by disruption and innovation: Uber, AirBnB, Lyft, and Amazon’s pivot are just some examples of start-ups emerging from the ashes of the chaos. This time won’t be any different. Technology will play a major part in getting business back on its feet, in new ways.
We know that when the pandemic is over, things won’t be the same again. However, when the grief and shock makes way for a positive can do attitude, human insight will come to the fore. We recognise that we will have to approach the same things different to move forward in the “new world”.
Matū is ready and we will play our part in this new wave. Our pipeline is solid and continues to expand. We are well positioned to ride out this economic “correction” and we continue to interact on a daily basis with innovators and entrepreneurs in this new era.
We will clearly need new capital to execute the opportunities, and we continue to engage positively with potential investors. We are also expecting market corrections to take shape in a softening of valuations and general investment terms.
Sectors rife for disruption could include fintech, digital health, wellness and medical devices, industrial processing, digital security, remote collaboration tools, and AI. We could see a mad scramble of a lot of venture money globally into these sectors, and we will continue our careful and scientific approach to early-stage investing.
We hope that you and your families are safe and well during the lockdown, and please do reach out if we can lend an ear or help in any way.
The Sunday Star Times features Tend, a telemedicine start-up founded by serial entrepreneurs James and Cecilia Robertson. Having also founded My Food Bag, they have worked for a year to build the technology and ensure regulatory compliance, and will soon have it available in Auckland.
Mike Volpi writes on TechCrunch about the value of having a Board of Directors in an early-stage start-up, and what sort of relationship the Board should have with Management. A number of key messages in this article are the same ones we espouse in our Governance for Early-Stage Companies workshops. The role of the Board isn’t to be the boss of the CEO (unless it is really necessary), but rather to provide day-to-day support and guidance in a way that adds value.
A launch event was held for the Elevate NZ Venture Fund last night in Auckland, with three government ministers present and many of New Zealand’s early-stage investors represented. This is the $300 million early-stage intervention that was announced in the Budget last year, and the government is hoping that it will help supercharge the hunt for unicorns.
At the event, Phil Twyford said: “New Zealand has averaged around one new unicorn a year – a technology company with a market valuation of a billion dollars-plus – through the likes of Xero, Lanzatech and Rocket Lab. As more capital becomes available, we want to see more of these new companies emerging.”
The event also revealed a new name for NZVIF, which will now be the New Zealand Growth Capital Partners. The name points towards the co-investment approach used, either as direct investments into start-ups or with a fund-of-funds model, where NZGCP deploys capital into other investment funds.
You can read more here: https://www.stuff.co.nz/business/120014084/governments-300m-venture-capital-fund-seeks-unicorn-technology-companies
or the official press release: https://www.scoop.co.nz/stories/PA2003/S00033/elevate-nz-venture-fund-to-lift-productivity.htm