Our thoughts on how Blackrock's $2 billion clean energy fund came to our shores
Introducing the IVX Fund
Today we announced the launch of IVX (as in Icehouse Ventures Expansion), a late-stage venture fund that will invest in 20-30 of NZ’s leading tech companies.
We have already raised over $50m to date from Simplicity, an Iwi, Hobson Wealth, Sir Stephen Tindall, and over 100 individual investors and are moving towards a $75m final close. The fund is now open for investment from new investors.
What is "late-stage venture capital?
IVX is a late-stage fund. What does that mean? Most of the capital will be deployed into companies with established and growing teams, well-developed products & services, evidence of competitive wins, five or more years in market, revenue & proven business models, and strong governance. And the most critical feature: potential for significant global growth. Example companies already in the IVX portfolio include Shuttlerock who are generating $10m+ revenue, Dawn Aerospace who have their technology commercially operating on multiple satellites in space, and Sir John Kirwan's Mentemia whose tech is used by The Warehouse, Sky, Eroad, and others.
How does IVX compare to other VC funds?
IVX leverages our unique relationships, information, and follow-on rights we have as a result of being among New Zealand’s most active early-stage investors. Our pipeline includes our 250+ startup investments, a subset of which thrive and become sought after. This simply cannot be reverse engineered. (Note IVX can also invest in startups outside of our family.)
This is not a novel model. YCombinator, a Silicon Valley-based accelerator that got its start making $20k pre-seed investments, subsequently raised a $1b “continuity” fund to invest further in its top performers like Airbnb and Dropbox. Having long-duration relationships with founders and longitudinal data on their performance is a real advantage.
Biomatters was among the first startups to present to the Ice Angels investment network after it was formed by its five founding members in December 2003. The Ice Angels and a handful of others provided seed funding in 2004, and we’ve invested multiple times in the company as they evolved and grew over the years. One of the members has remained a Board member since day one.
The founders of Biomatters set out with a vision of “uncorking bottlenecks in the disease-research and drug-discovery processes.” This absolutely aligned to our desire to back ambitious startups that could add significantly to the future of New Zealand.
Their tenacity, commitment, and world-leading team has flown under the radar for more than a decade. The acquisition offers Biomatters the firepower they deserve to help them shine on the global stage. It is an exciting next step for the company and the team as they join forces to create a life sciences software platform with technology and data analysis at the core of scientific research around the world.
It is also good news for New Zealand’s fast-growing entrepreneurial sector. As we have seen with other investor returns of this magnitude, the capital, confidence, and expertise is often recycled into the startup ecosystem. Good ideas breed other good ideas; company founders breed founders; confidence breeds confidence, and capital breeds capital. It is very virtuous.
Ice Angels invests in startups knowing their journeys are risky and can be long. It’s fantastic to have the risk and patience rewarded in this case.
As we power up the new company next week, Icehouse Ventures (which includes Ice Angels), with our first official day being 1 May, we look forward to meeting more entrepreneurs with the potential to make their mark on the world stage like the Biomatters team.
Congratulations to Brett and the Biomatters team. Thanks for your hard work and contribution to the future of New Zealand.
- Robbie Paul
CEO of Icehouse Ventures
I joined The Icehouse ten years ago. The first thing that inspired me was the calibre of the people involved. 100s of entrepreneurs, investors, and business leaders lined up to contribute to our mission of creating a high performing New Zealand economy where ideas and businesses thrive.
Our opportunity (& challenge) has always been to truly harness the expertise and resources of our network. We have leveraged many tools to do so. We incentivise them, inspire them, provide them an identity, and simply beg them.
As an investor in >80 startups, I have seen ample evidence that the most effective tool to harness the firepower and willpower of others is to align them with equity. That has not been an option for us. Until now.
Today we announce the establishment of Icehouse Ventures. As the investment arm of The Icehouse, the Icehouse Ventures group includes the Ice Angels and ArcAngels investor networks, Tuhua Ventures, Eden Ventures, First Cut Ventures, a variety of passive funds, and the Flux Accelerator. We have collectively invested >$100m into 165 Kiwi startups.
Icehouse Ventures is launching with $3m in investment from Simplicity Kiwisaver, FNZC, and Sir Stephen Tindall’s K1W1. I cannot imagine a more iconic and aligned set of lead investors. We will raise an additional $1m from the amazing angel investors within our community.
The investment is about enabling us to significantly increase the support we provide to startups. This capital will afford more resources and templates, a larger and more relevant global network, increasing investment for startups by growing our community of active investors and our managed funds, and more high pedigree team members and fund Partners to provide hands-on support.
However, this capital raise is not just about financial capital. It’s about intellectual capital. Financial capital keeps the lights on. Intellectual capital underpins bold missions. Financial capital seeks an ROI. Intellectual capital creates an ROI. Financial capital is finite. Intellectual capital is infinite.
I have always admired the virtuousness that founders benefit from when they raise capital: they start with a bold vision and through the process of convincing investors and team members to believe it they become more emboldened. As a result, they are better able to harness the intellectual capital of their investors and team members. This has absolutely been our experience launching Icehouse Ventures. We are better off having simply gone through the process.
This is an exciting new chapter for us.
It was inspired by watching founders establish and pursue massive visions. It was enabled because founders gave us the chance to support and invest in their journeys. It was funded because Simplicity, FNZC, and K1W1 recognise the amazing impact founders can make on New Zealand’s future. Thanks to you all.
Ten years into this journey with The Icehouse I can conclude this: patience and persistence is highly rewarded in the startup ecosystem. It takes a ridiculously long time to build anything of meaning.
The support of Simplicity, FNZC, and K1W1 provides us the ability to remain patient and persistent. It positions us to build an institution that thrives by investing in and adding value to New Zealand’s leading startups over the coming decades. I feel super privileged to be a part of this mission.
CEO of Icehouse Ventures