New Zealand Innovations October Newsletter

Kia Ora friends!

Fund update

We continue to see tremendous opportunities in the New Zealand startup space and have made 12 investments since the launch of the fund. Canva’s $200M raise at a $40B valuation is a good example of why we are excited about the potential of startups coming from Down Under. Given the strong pipeline of deals, our LP’s should expect another capital call from NZVC in the coming week.

New Zealand border update

There's been some big changes to the government position on covid and reopening of borders. While NZ pursued an elimination strategy since the start of covid, and in our last newsletter we predicted very optimistically that elimination would be achievable, after many more weeks in lockdown and cases spiking as some people flouted rules, the government decided that it would change tact and pursue a vaccination and containment strategy instead. Since then they've instituted a 90% double vaccination threshold at which point all lockdowns would end.

To date 88% have a single dose, and almost 80% have both doses. Additionally, NZ announced that they will be loosening the quarantine rules upon entry into the country, shortening the stay from 14 days to 1 week. All these updates are coming at a great time since summer is 1 month away and kiwis want to travel and vacation. This means that many of our partners who are based overseas as well as LPs will be able to enter the country in the next 6 months. One LP in particular, has actually received a DD visa and an MIQ slot through his investment into NZVC and several of our portfolio companies. We are very excited to welcome him to NZ in the next few months. 

Startup of the month: Sea Change

Sea Change is an ambitious New Zealand deep-tech startup that is making zero emission electric hydrofoiling ferries a reality. The founder Max Olson grew up on the ocean and was always obsessed with boats, modifying many himself. He was a cofounder and CTO of Halter, one of New Zealand’s cutting edge agtech companies.  Max saw the potential for sea ferries carrying people and cars given the many islands New Zealand has between which people want to travel with their cars. He is joined by Adam Flynn, an early engineer from Wish, as the head of engineering. The ambitious innovation in speed, efficiency, pollution, cost, and comfort is only possible because of the technical chops of the team. The engineering involves active pitch stabilization and a lot of input on roll from controllers much like Boston Dynamics. Coupled with weight reduction from advanced materials (carbon fiber), this leads to a 3X faster travel time (as hydrofoiling drastically reduces drag) with zero emissions.

The first route is planned for regional car ferries from Wellington to Picton NZ in mid-2023. This alone is a $150M market. Existing solutions are large, slow, diesel powered ships that pollute this planet and cost $120M to replace. The ferry costs $10M to build and is expected to earn $12M per year with a capacity for carrying 12 vehicles & 70 passengers. We love the mission of a cleaner, faster and modern coastal sea transport and are delighted to be an investor in Sea Change.

EHF Investor Series: Mark interviews our LP Ed Baker

16 November, 12 pm NZT (15 November, 3 pm PT)

Join Mark Pavlyukovskyy Founder of NZVC fund as he interviews EHF investor Fellow Ed Baker who is an investor and advisor to various startups including Whoop, Zwift, and Lime. Ed was the VP of Product and Growth at Uber from 2013-2017. Prior to that, he was the Head of International Growth at Facebook, a company he joined after they acquired a startup he co-founded called Friend.ly, which had grown to over 25 million users. Ed has an MBA from Stanford, and at Harvard, he concentrated in Chemistry & Physics. There will be space for Q&A.

New Zealand companies innovate in

climate technologies

The recent IPCC report and COP26 starting this weekend has brought a renewed focus on climate response in New Zealand. Creative HQ is New Zealand's leading provider for structured innovation programmes and one of the platforms NZVC closely engages with as part of our ecosystem building efforts. Creative HQ recently ran the Climate Response Accelerator which was a 12-week programme designed to help impact-focused entrepreneurs solve some of our planet’s most urgent challenges. From 70+ applications eight teams were selected tackling a range of issues - from clean energy, to food waste and better transport. We participated in Creative HQ's first ever Investor Night and look forward to engaging with some of these companies on climate solutions.

Fun fact about NZ: Did you know…

… that New Zealand has become the first country to pass legislation mandating its financial institutions to “disclose clear, comparable and consistent information about the risks, and opportunities, climate change presents to their business.” The push comes on the back of New Zealand receiving the dubious distinction of having the second highest increase in emissions (+57%) of any country in the world during 1990-2018. We expect a renewed push into climate solutions to better align the country’s actions with its eco-friendly image.

Best regards,

Mark Pavlyukovskyy, Ajay Gupta, and Glen Anderson