Opinion: Bright funding future for Kiwi clean tech

Greenhouse Capital directors, Duncan Stewart and Dr. Nigel Bradly. Photo / Supplied

Greenhouse Capital, NZ’s first dedicated clean tech investors, say ‘right time, right place’.

The launch of Greenhouse Capital - New Zealand's first and only dedicated clean tech investors - was announced at the New Zealand Cleantech & Environment Network (NZCEN) event hosted by Westpac on 20 May 2015. Six weeks later Greenhouse Capital has signed on more than NZD$240m of mandates from New Zealand companies seeking investment funding for growth of critical commercial infrastructure, and expansion into new domestic and export markets.

The clear message is that the New Zealand clean tech sector has a strong appetite for growth, and we believe it is matched with investor interest.

It's not limited to a domestic play - Greenhouse Capital has also formed a partnership with London and New Delhi-headquartered ETI Dynamics, who are specialist green infrastructure and clean tech investors. The nature of this relationship is to collaboratively identify opportunities for cross-border transfer of intellectual property into India, Asia and African markets. The scope for growth in these regions is beyond imaginable for most kiwi companies.

Both domestic and international investment opportunities are centred around flexible growth models including capital investment, new supply and out-take agreements, debt, government funding, structured commercial advice, partnerships and joint ventures.

The types of opportunities we look for typically have the following traits: existing revenue indicating market validation of the product or service, a scalable and transferable commercial model, and complex, novel intellectual property. Delivering significant and readily measurable environmental benefits is fundamental to our criteria assessment, as is clearly identifying where Greenhouse Capital can add value, other than via the application of capital. To help do this we've assembled a team of commercial specialists across various disciplines to work alongside, and in some cases within, our investment partners. We take an open, collaborative approach that is focused on driving value for all stakeholders.

Our approach is not to invest in 'green for the sake of green' companies - the numbers need to stack up just like any other business, the difference is that we use a 'green lens' to evaluate and characterise the nature of the commercial opportunity, in the context of what we see as a series of converging global demand for smart, scalable, low-carbon and environmentally benign technologies. NZCEN is the best place to check out New Zealand's leading clean tech companies. We put this directory together several years ago in order to better understand the size and shape of the marketplace, and provide a forum for communication. Westpac agreed to support NZCEN as a lead sponsor as part of its ongoing commitment to supporting low carbon and clean technologies.

To provide a flavour of the deals Greenhouse Capital is working on currently:

• Tyre recycling - amidst the current carnage of the tyre recycling industry in NZ, one player has emerged dominant. We attribute this to having the best technology coupled with a professionally run organisation and a strong focus on contract management and financial analysis. New Zealanders can look forward to poor management of the tyre waste stream becoming a thing of the past
• Offsite manufacture of sustainable housing - a relevant topic for Aucklanders but also for the nation, as New Zealand needs more efficient and faster ways of constructing high performance homes. We believe offsite manufacture of housing components strikes a good balance between performance and consumer cost, whilst still occupying a premium design-led brand position
• Sustainable apiculture - the bee industry in New Zealand is undergoing remarkable growth. With around 500,000 registered hives producing 18,000 tonnes the industry itself is becoming increasingly industrialised, and with it the increased use of foreign, non-renewable materials in the supply chain. If New Zealand is to maintain its brand position as a premium producer of sustainable honey, then we believe there is an opportunity to include revolutionary sustainable materials and to supply these abroad

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