Published Nov 1, 2022
A clever partnership between Wellington UniVentures and Booster NZ is helping homegrown deep-tech start-ups bridge the “Valley of Death” separating new ventures from global success stories.
There must be something in the water - or wind - in Wellington. The region is a hub for innovation and Te Herenga Waka—Victoria University of Wellington sits at its heart. Wellington UniVentures helps channel that innovation into new for-profit and social enterprises from University research. Whether it’s low carbon green steel, a better fitting bra, or naturally derived pesticides, Wellington UniVentures helps bring seriously exciting research ideas into the world where they can change lives.
Often, that requires spinning out new companies. And that requires investment.
"For new companies, even incredibly promising ones, attracting investment in those early stages can be tough,” explains Dr Anne Barnett, CEO of Wellington UniVentures. “Start-ups need to prove themselves to attract investment – but, to do that, they need to grow rapidly which requires investment. It’s a Catch-22.”
So many new ventures perish on this journey to market that it’s referred to in start-up circles as the Valley of Death. For those that do make the journey, it often means relying on angel funding or venture capital, but this funding is hard to come by and start-ups often have to go offshore to find it.
Wellington UniVentures saw an opportunity to give their start-ups a head start through a partnership with Wellington-based financial services company, Booster NZ. The partnership, named the NZ Innovation Booster (NZIB), marked the first time a New Zealand financial institution joined forces with a university to invest directly in its start-up companies. (Funnily enough, Booster itself was founded by its CEO, Allan Yeo, an alumni of Te Herenga Waka—Victoria University of Wellington.)
“Though it was novel at the time, to us, partnering with Booster seemed like a no-brainer. It meant that a dedicated investment fund was available to directly support our new ventures, alongside the wider New Zealand seed-stage investment community, increasing their chances of growing in the early stages and attracting future investment,” says Anne.
Under the deal, Booster invests up to $2m a year in new University start-ups. So far, the partnership has invested over $6.5m across ten deep-tech spinouts from Wellington UniVentures. And the idea is catching on – Otago Innovation Limited has since joined the NZIB partnership, enabling support for even more burgeoning Kiwi talent.
In practice, the partnership makes a material difference to new companies like Liquium Ltd, a recent Wellington UniVentures’ spinout bringing a novel, cleaner and cheaper way to make ammonia to market. It has the potential to disrupt ammonia production, one of the most polluting industries on earth. As CEO Dr Paul Geraghty puts it, “we’re creating clean liquid fuel for heavy industries.”
Paul says the first investment round supported through NZIB is fundamentally driving growth – helping grow their team, de-risk and scale the technology, access international expertise and connect with key stakeholders.
As they expand into new markets, Liquium’s team is excited to bring the Kiwi venture ecosystem along for the ride. “The fact that Booster listed its innovation fund on the NZ exchange early this year means that it gives all Kiwis the opportunity to invest in exciting homegrown companies,” says Paul.
By creating more sources of early-stage domestic investment through partnerships like NZIB, Wellington UniVentures is supporting deep-tech start-ups like Liquium to thrive locally. This, in turn, helps to foster an entrepreneurial ecosystem that makes Wellington an attractive place for highly skilled people to live and work.
For a company as dedicated to backing New Zealand businesses as Booster, the partnership is a win-win. Booster Innovation Fund Manager, Melissa Yiannoutsos (also a Te Herenga Waka – Victoria University of Wellington alumni), sees the fund as a modern twist on supporting local.
“The goal was ‘getting New Zealand capital to work for New Zealand’,” Melissa says. “The partnership laid a strong foundation for us to achieve this. We listed the Booster Innovation Fund on the NZX earlier this year allowing us to invest in more young companies. This was a really important next step for us to help all Kiwis invest in young, innovative Kiwi companies. We’re proud to be the first KiwiSaver provider to achieve this – establishing a responsible investment vehicle with patience to help build the next generation of ground-breaking Kiwi companies.”
For Wellington UniVentures, the Booster partnership is one example of how the organisation is delivering on its commitment to bring Wellington’s research to the world. “We’re always looking for how we can best support our researchers to get their innovations out there. The success we’ve had with Booster proves that creative, mutually beneficial partnerships pay dividends,” says Anne.