Icehouse Ventures | Resources

Designed by Apple in California

Written by Robbie Paul | October 2024
I'm excited to share that Pie Funds has invested $10m into Growth Fund II, bringing us to $98m of our $100m target. Their investment supports my case that the next Apple should be built from New Zealand. That may sound far-fetched so here are the reasons why it is possible.

The Role KiwiSavers will play in the ensuring the next Apple comes from New Zealand.

I’m excited to share that Pie Funds has committed $10m to Growth Fund II. Mike Taylor, Ana-Marie Lockyer and the team have spent more than a decade studying, investing in, and championing great Kiwi companies. Their investment speaks volumes of the quality of the entrepreneurs we are supporting.

Their investment also supports my case that the next Apple should be built from New Zealand. That may sound far-fetched so here are the reasons why it is possible.

The first relates to Pie’s KiwiSaver Growth Fund’s move into venture capital. The enormity of capital that will flow into KiwiSavers over the coming decades is difficult to appreciate. New Zealand- and our venture capital ecosystem- will go from being capital-constrained to flush.

The beautiful thing about KiwiSavers getting to scale is they can start allocating to alternative asset classes. Even better, as they scale further so too can their % allocation to alternatives. Yale’s $41b endowment fund allocates >20% to venture capital. As an illustrative example (and not related to Pie’s specific figures):

  • $2b FUM → 2% alts allocation = $40m
  • $8b FUM → 10% alts allocation = $800m

The above is based on 15% YOY growth from member contributions and capital growth. Last year saw 18% growth across the industry. If there is success increasing the minimum contribution then the growth could be even greater.

The likes of Halter, Crimson Education, and Mint Innovation have attracted >$50m each from New Zealand investors over the last few years. Based on the above, it is plausible future companies like them could attract >$1b from New Zealand investors.

 

Three other reasons:

1. Entrepreneurial talent is getting recycled. And with each cycle we are seeing greater ambition and possibilities. Recent examples include Cecilia Robinson (My Food Bag → Tend), Shaun Quincey (Genoapay → Simfuni), and Brianne West (Ethique → Incrediballs).

Another great example is our first third-gen company: Ternary Kinetics. Ternary was co-founded by Sean Molloy (Early at Lanzatech and then founded Avertana), Aaron Marshall l (Zincovery co-founder), and Sean Simpson (Lanzatech founder). They were joined by Peter Beck as Chair.

Ternary is building technology to move electricity as a liquid and provide a power source that generates zero emissions, is energy-dense, and cheaper than fossil fuels. This is a global opportunity that could make Ternary bigger than Lanzatech and Rocket Lab combined. To get there, they may need and merit 100s of millions. New Zealand investors should aspire to provide all the capital they need to win big.

 

2.  Known technology is transforming New Zealand. The most obvious recent change is virtual work. I don’t simply mean team members tapping away at their home office. I mean a recent nine-figure transaction that took place without the acquirer setting foot in New Zealand. Companies are increasingly able to hire talent, raise capital, close sales, and execute acquisitions virtually. This change is disproportionately benefitting startups in remote countries like New Zealand.

The progress of Dawn Aerospace (flying multiple times in a day to 80k+ feet) suggests to me international movement of goods and people will become much more rapid over time.

The increased efficiencies achieved for dairy and beef farmers by Halter may result in the equivalent of adding Tasmania’s land mass to New Zealand’s pastures. Halter is simultaneously generating more value for one of New Zealand’s largest industries and reducing its environment impact. Technologies will make New Zealand wealthier and healthier.

Self-driving cars will materially change the livability of our cities. We may not have great public transport, but our roads are relatively high quality. Did you know there are two Kiwis (Dave from Nuro and Alex from Wayve) that have raised >$1b for self-driving technology?

The list goes on.

 

3. Global trends will amplify New Zealand’s potential. A key trend is the increasing mobility of world-leading businesspeople. This is enabled in part by #2/ the shift to virtual commerce. Families and individuals with resources can choose where they live – and it’s not a surprise many are choosing a beautiful, politically-stable, English speaking, and vibrant country like New Zealand. Larry Page (Google), Pierre Omidyar (eBay), James & Suzie Cameron (Titanic/ Avatar), and many others are spending time and investing money in New Zealand. In doing so, they are normalising the concept of a living and working on a remote island. Many others are following in their footsteps.

So, New Zealand has the ambitions, capital, and talent to build global companies. Any additional capital, resources, and talent needed is getting easier to access from around the globe.

Do we have the scale and infrastructure equivalent to much larger countries? No. Is that really what matters these days? Apple is Designed in California. They tap into global resources and capabilities to get their products built and in the hands of customers. Who knew that billions of Apple devices have been shipped with wireless power technologies that are still today developed in the Wynyard Quarter?

We are looking forward to playing a part in the next wave of New Zealand success stories and massively appreciate Pie’s support to do so.