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New $75m growth fund by Icehouse Ventures

Contributor:
Fuseworks Media
Fuseworks Media

Around 30 high-growth Kiwi startups will get $1-10 million of investment from Icehouse Ventures over the next two to three years, thanks to its new IVX fund designed to fill the expansion capital funding gap and help more established New Zealand startups scale their business globally.

Eight fast-growing companies valued between $40m and $500m have received IVX investment stemming from the initial pool of $50 million raised since the fund opened for business six months ago. A further 11 investments are underway.

IVX has received investments from Simplicity Kiwisaver, Sir Stephen Tindall’s K1W1, Hobson Wealth, family offices, and more than 100 individual New Zealand investors.

With 240 early stage Kiwi startups funded by Icehouse Ventures to date, the company is recognised as the most active seed stage investor in New Zealand. The venture firm was among the first investors in startups including Halter, Mint Innovation, Crimson Education, Dawn Aerospace, Ask Nicely, Sharesies, and First AML. As a result, it has had the opportunity to invest further in each of their growth rounds. Icehouse Ventures currently has $30m seed funding on hand for an additional 50 early stage startups.

With IVX, Icehouse Ventures is now able to continue the journey with top performing founders it has previously backed by providing expansion capital beyond early seed funding.

An example of this is Sir John Kirwan’s digital wellbeing platform Memetemia, which received Icehouse Ventures seed funding in 2019. Two months ago IVX contributed to its $6 million Series A funding round alongside ACC’s Impact Fund and ethical KiwiSaver fund manager Pathfinder.

Halter, Shuttlerock, and Crimson Education have also recently received IVX investments as part of their growth rounds, and the latter two have been supported by Icehouse Ventures since 2014..

Series B and Beyond

The fund plans to contribute up to $10m per company as the lead or co-investor for these more established, fast-growing New Zealand businesses raising between $5m-50m.

"For the first time, Icehouse Ventures can now invest in great Kiwi startups from day one to pre-IPO. The longer you have been involved with a company, the better positioned you are to support their success and to make informed investment decisions in later rounds" says Icehouse Ventures CEO Robbie Paul.

"The appeal of this fund to investors is that it benefits from the information and relationships we have built with companies over many years. Of the hundreds of brave startups we fund, only a small subset successfully navigate the first three to five high-risk years. This fund enables investors to jump on board with the companies that successfully develop their technology, build teams, scale revenue, and prove they can compete and win in global markets."

Mr Paul cites the example of Silicon Valley’s Y Combinator, which has funded hundreds of early stage startups with $20,000 investments, and then went on to raise a $1b "continuity fund" to invest in its top performing alumni.

Unlike Y Combinator, IVX is not limited to investing in companies previously backed by Icehouse Ventures, with two of the eight IVX investments sitting outside of its existing portfolio.

Mr Paul says it has historically been challenging for New Zealand investors to secure investment opportunities in the top emerging Kiwi companies. "To borrow a phrase from Sharesies, New Zealand high net worth investors are often ‘priced out and left out’. They face formidable competition from large venture funds and overseas investors. And access typically comes with a $750,000-plus price tag. By comparison, investments in IVX from individual investors have ranged from $50,000 - $4million.

"For Kiwi investors who want to back global companies founded in their own backyard, IVX makes this more accessible and attractive by tapping into our twenty-year history with 240 companies funded to date.

Icehouse Ventures has thus far committed more than $190m into 240 startups, with more than 70% of these startups backed since 2015.

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