NZVIF to invest in new funds with $60m underwrite

NZVIF to invest in new funds with $60m underwrite

Media release: 27 February 2013

The New Zealand Venture Investment Fund expects to commit to two to three new venture capital funds over the next few years, following the government’s decision to provide NZVIF with a new $60 million underwrite facility.

NZVIF chief executive Franceska Banga said the underwrite is not a new allocation of capital but it provides NZVIF with additional capacity to commit to new venture capital funds.

“The underwrite facility is unlikely to be called, but it provides greater flexibility in the way that NZVIF manages the $160 million which has previously been allocated to the venture capital programme. It allows NZVIF to make commitments into new venture capital funds and then use cashflows from past investments to meet those commitments.

“The additional $60 million in the form of an underwrite of NZVIF is timely and welcome. It enables us to progress with new investment partnerships, like the recently announced cofund partnership with Taiwan’s National Development Fund. We expect to see two to three new funds beginning the capital raising process over the next three or four years which, if established, will help the flow of growth capital for startup companies.”

Since establishing NZVIF, the government has allocated $160 million of capital to the venture capital programme and $40 million for seed investments. Two years ago, it provided a $40 million underwrite to NZVIF for the programme. Together with the latest underwrite, NZVIF has capacity to make investment commitments up to $300 million. NZVIF has made investment commitments of over $200 million to date.

Eight venture capital funds and 14 angel group partnerships have so far been established. Through these, NZVIF has invested $117 million into 126 companies including promising companies like Orion Health, SLI Systems, PowerbyProxi, Booktrack, BioVittoria and Zephyr Technology which have gone on to raise total investment capital of $700 million. They have also earned revenues of $1.25 billion, including export earnings of $945 million.

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