New Zealand Venture Investment Fund (NZVIF) committed NZ$20 million ($13.5 million)to Wellington-based fund manager Movac as it attempts to raise between $80 million to $100 million for its fourth growth capital fund.
Movac managing partner Phil McCaw said the new fund called ― Movac Fund 4 ― will target the next generation of iconic Kiwi companies and will continue the work of their previous funds.
Movac’s past investments include Trade Me, PowerbyProxi, Aroa Biosurgery and GreenButton. Since it started in 1998, Movac has invested in more than 25 companies, deployed over $55 million in capital, and helped create over 250 jobs for New Zealanders.
“With NZVIF’s commitment, we are now raising capital from a range of private and institutional investors,” McCaw said. “It will be focused on ‘later stage’ companies; those that are raising growth capital in the post seed and angel investment stages, that have a team in place to grow the business, and which have the ambition and potential to scale to $100 million-plus in revenue.”
NZVIF chief executive Franceska Banga said their commitment to the new fund of up to $20 million was driven by the strength of Movac’s strategy and experienced management team.
“Movac has an excellent track record of supporting high growth potential companies since its first investment in Trade Me in the late 1990s and their new fund should be attractive to New Zealand institutions and private investors,” she said.
McCaw explained significant demand for growth capital funds remains in New Zealand despite the thriving investment community and well-serviced private equity market.
Although accessing rounds of $2 million to $10 million in growth capital funding are still very difficult for New Zealand companies, he said Movac remains encouraged by the quality of the companies, and the people behind them, all seeking investment to grow their businesses.
“Movac Fund 4 will directly address this gap in the market and provide local investors with the opportunity to participate in high growth technology investments that are typically very difficult for them to access on their own,” McCaw said.
Banga said when the Movac Fund 4 reaches a final close, it will join Pioneer Capital, GD1 Fund II and GRC Sinogreen as being active the New Zealand market.
“We have seen significant development of the market over the past 15 years, and NZVIF has helped catalyse around $1.7 billion of private investment alongside its own investment of $148 million,” Banga said.
Banga cited the track record of companies like Orion Health, Xero, PowerbyProxi, and Adherium, which are developing global technology businesses within New Zealand, maintains a healthy level of angel fund activity and emergence of crowd-funding alongside the venture capital sector.
NZVIF has been investing with venture capital funds through its $250 million Venture Investment Fund since 2003. It has partnered with 11 venture capital funds which have invested into over 65 companies.