The New Zealand Venture Investment Fund (NZVIF), a government-sponsored fund-of-funds, has raised the investment cap of its Seed Co-investment Fund (SCIF) to $1.1 million (NZ$1.5 million) per company for stronger returns and to better support new start-up companies, said an NBR report.
SCIF is aimed at small to medium sized businesses at the seed and start‐up stage of development which have strong potential for high growth.
Investments from the fund were so far limited to a maximum investment of NZ$250,000 in any one company or group of companies with the possibility of follow‐on capital investments up to a maximum investment in any company of NZ$750,000, at the discretion of NZVIF, according to NZVIF website.
NZVIF will also be allowed to co-invest with qualified investors outside the traditional angel networks provided it will support promising companies that are trying to commercialise a product or service, the report added.
“The changes mean the fund will be more effective and able to back both the promising companies alongside its angel partners,” Economic Development Minister Simon Bridges was quoted saying in the report. “We expect this will improve returns, which New Zealand Venture Investment Fund will use to invest in more new and promising start-ups,” he added.
The NZVIF was established by the New Zealand government in 2002, and currently has $245 million of funds under management which are invested through two vehicles: the $195 million Venture Capital Fund of funds, and the $50 million SCIF.
SCIF was established in late 2005 and made its first investment in 2006. It is co-investing $50 million into young technology companies alongside selected angel groups.