While GD1 will continue to hunt for capital for Core Fund II into next year, it has already started to make investments from its first-close haul.
Funds have been deployed to Outlier Space (a re-usable satellite start-up founded by Rocket Lab alumni Jamie France) as part of its recent $12.8m raise and early-stage firm Atomic Tessellator, which is using AI to speed the process of discovering synthetic alternatives for rare earth elements.
Core Fund II investments have also been made in two start-ups still in stealth mode.
Previous GD1 funds (Core Fund II is the firm’s fourth fund) have put money into start-ups including Dawn Aerospace (the deep tech Christchurch firm that recently expanded into satellite refuelling tech), the crime-fighting Auror and the lawyer-boosting Ivo, electric boat maker Vessev and VXT.
Tauranga electric motorbike maker Ubco (now riding again under rich-lister ownership) was a high-profile flame-out.
The AIP scheme was introduced in April last year with a $5m growth category and $10m balanced category.
In an April update, Immigration Minister Erica Stanford said that in the scheme’s first year:
609 applications have been received for 1988 people$1.49 billion is already invested, with a further $2.415b in the pipeline (the previous scheme topped out at $100m)
In the AIP Growth category, money has been committed to:
Private Credit: $899mVenture Capital: $147mInfrastructure: $97mPrivate Equity: $57mDiversified: $17mFund of Funds: $10m
The skew to private credit (private non-bank lending) reflected a worldwide trend.
Kumar said he would like to see the next Government incentivise AIP investors to help “fill gaps in our knowledge economy”, in part by promoting more bodies like Auckland University’s Bioengineering Institute (where the Auckland Grammar old boy studied for four years).
He later won a Fulbright Scholarship to pursue an MBA at Wharton. His US stint also included two years at Apple as an engineering project manager.
Global From Day 1 co-managing partner Vignesh Kumar
The Bioengineering Institute has helped students and academics turn research into medtech start-ups, including Alimetry (in which GD1 is an investor) and Kitea Health.
He saw scope for more such “centres of excellence” for other sectors.
“All of these AIP folks, we don’t want them to view New Zealand as a hedge. We want them to view New Zealand as a long-term home, where they actually have a place in the economy,” Kumar said.
Shaping up to be a good year, again
Golden visa investors were also credited as a force in Movac’s Growth Fund 7, which announced a $185m first close in June. General partner Mark Vivian said AIP visa holders had contributed $67m at an average $908,000 each.
Earlier this year, AIPs were also a factor as Icehouse Ventures hit a $40m first close for its $150m Growth Fund III and Bridgewest Ventures announced a $55.3m first close for its $100m Growth Fund I.
Multiple funds have reported oversubscribed raises this year, continuing a VC sector comeback after its extended post-pandemic hangover.
The introduction of the AIP from April, along with KiwiSaver funds’ nascent but growing interest in the sector and easing interest rates, helped total venture capital investments in NZ jump 61% to $745m last year.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.