Innovative start ups get extra $50 million funding

The New Zealand Venture Investment Fund says $50 million has become available to establish new funds targeting innovative local companies needing cash injections in the $2 million to $4 million range.

It will be good news for successful New Zealand start-ups struggling to secure vital second-stage funding.

"As these promising young angel-backed companies develop, they need new sources of growth capital," said New Zealand Venture Investment Fund (NZVIF) chief executive Franceska Banga.

"These companies, typically, are at the stage where they would be looking for capital of around $2 million to $4 million to start taking their product offshore.

"This is where new venture capital funds have an opportunity to invest in some exciting opportunities."

The $50 million became available after a $40 million underwrite given to NZVIF by the Government last month.

NZVIF says it is seeking proposals from venture capital fund managers with established teams, confirmed capital commitments of more than $10 million and a proven track record to administer the new funds.

Banga hoped the funds would have links to the global community.

"New Zealand companies face challenges when they get to the stage of taking their product offshore," she said. "Internationally linked venture capital funds are not only a source of investment capital but can provide valuable advice and access."

Candace Toner, chief executive of Biomatters, a company that develops software for research scientists, said the partly angel-funded firm, founded in 2005, had managed to secure a presence offshore without the help of venture capitalists.

Venture capital funds could introduce a range of complexities to a business, she said.

"If a venture capital company approached us [with] a good offer and they were interested in adding value not only through money but from the perspective of putting some additional talent on the board of directors, then we would probably consider taking investment from them."