Generate has committed $20m towards Icehouse Ventures’ Growth Fund II, a $100m venture capital fund that will support 20 established New Zealand technology companies to win in global markets.
The investment marks another opportunity for more New Zealanders to benefit from the remarkable innovation taking place within our country, says Generates’ Chief Investment Officer, Sam Goldwater.
“Icehouse Ventures has proven themselves over the last decade to be a top pedigree venture capital investor. We were particularly attracted by the unique deal flow and insights that Growth Fund II has as a result of Icehouse Ventures’ investments in >300 early-stage startups.” says Goldwater.
“Having these kinds of relationships, built over time and successive investments, gives Icehouse Ventures privileged access to new deals coming through, which should enhance returns for our KiwiSaver and managed fund customers.”
Icehouse Ventures is New Zealand’s most active Venture Capital group according to the 2023 Technology Investment Network Report. They have invested in approximately half of all early stage technology startups funded in New Zealand over the last six years.
Robbie Paul, CEO of Icehouse Ventures, says Generate’s backing signals the firm’s evolution into an institutional-grade fund manager.
“Sam and the Generate team have watched us closely since the launch of our first Growth Fund in 2020. A $20m cornerstone investment in Growth Fund II is a wonderful endorsement coming from an investor that serves almost 130,000 Kiwis,” says Paul.
Four months after launching, Growth Fund II is on track to a first close of $50m, a milestone that took 12 months for Growth Fund I. The fund is open to wholesale investors and the minimum investment is $50,000 which is paid over a three year period.
Paul says the high investor demand for Growth Fund II, in defiance of global venture capital trends, underscores Icehouse Ventures’ unique position in the market and high-trust, long-term relationships with many investors.
Icehouse Ventures’ transition into later stage investment has corresponded with its work toward becoming the most data-driven Venture Capital firm in the Asia Pacific. Its five person product team, led by CTO Peter Thomson, analyses and compares data across the firm’s 308 investments over the past decade to make more accurate and informed decisions.
“The most informative data is built over time. There is a big difference between looking over the books for a month versus tracking a company's progress over many years,” says Paul.
“The super power we are building is based on blending quantitative data sets on metrics like revenue growth with qualitative observations such as the ability of a CEO to communicate an ambitious vision or to attract and retain great talent.”
However, Robbie emphasised deal access is a critical feature in a market that increasingly includes global venture funds.
“When you’re looking at the meteoric revenue growth of the likes of Tracksuit or Hnry, deal access becomes more important than traditional due diligence. That is where our unique relationships, information, and pre-emptive rights have served us well,” said Paul.
Growth Fund I
$110m raised in 2021 from investors including Simplicity, an Iwi, Hobson Wealth, and >500 high net worth investors and family offices from around the world.
32 investments to date including Halter, Hnry, Dawn Aerospace, Crimson Education, and Mint Innovation. (Recent press related to Fund I companies: Nilo, Vertus Energy, Halter, Dawn, Biolumic, Sharesies, Tracksuit.)
Aggregate annual revenue by the portfolio exceeds $250m - an increase of $100m from when the Growth Fund first invested. Nine are generating more than $10m, three are pushing $20m, and one exceeds $100m in annual revenue.
Icehouse Ventures funds have attracted investment from >1,500 high net worth investors and a growing number of institutional-grade funders including Simplicity, Harbour Asset Management, Hobson Wealth, and Ngati Apa ki te Ra To.
About Icehouse Ventures
Icehouse Ventures is a venture capital firm on a mission to fuel Aotearoa’s bravest founders. Over the last 20 years, they have scaled to become NZ’s most active early-stage investor. They have $320m in funds under management and a portfolio of more than 300 companies. The firm invests from concept stage through to Series D and were among the earliest investors in companies including Halter, Partly, Hnry, Crimson Education, Mint Innovation, and Dawn Aerospace.