Breaking the ice
At a glance
Auckland’s Icehouse Ventures has supported and funded some of the hottest startups to emerge in Aotearoa in the last decade.
From Crimson Education and Dawn Aerospace to Ask Nicely, Sharesies, and First AML, the ventures that emerge from the Icehouse have attracted serious investment, employ hundreds of people and are expanding globally.
At the heart of the success of Icehouse Ventures is its ability to attract the right kind of investors.
“Great founders are on a mission and they need capital to grow,” says Icehouse Ventures CEO, Robbie Paul.
“Investors want a trusted partner that will give them the deal flow, the resources and the scale. So to properly target your core customer, which is the founder, you really have to consider your secondary customer, which is the investor,” adds Paul.
That investment-driven approach began in earnest in 2013, when Icehouse Ventures raised its first fund to meet the seed capital requirements of ventures coming through its incubator programme, which was founded in 2002 under the leadership of original CEO Andy Hamilton.
Icehouse Ventures opened its doors the previous year as a partnership with the University of Auckland. While it had promising founders from the university on its radar, Paul said it initially worked with owner-managers of typically “low-tech” companies.
With increasing interest from the angel investment community, the focus soon shifted to high-growth, high-value companies. These days, Icehouse Ventures recruits founders with such potential from around the country, with digital and high-tech ventures predominating.
“Callaghan Innovation’s mission for incubators is clear: Support businesses to start, and be enabled, connected and positioned to grow and scale offshore.”
Icehouse Ventures works with founders that clearly reflect this, and their missions are much bigger than, “just making a buck”.
“They’re also leveraging unique perspectives on the world or, or have really deep intellectual foundations, be it research or experience working in other organisations.”
Incubator participants gain Icehouse Ventures as an initial investor and while the usual educational and support programmes are provided for founders, the interaction with experienced investors is the magic ingredient.
“Founders want money. But they want it on the right terms at the right pace and they want it from people with the right mana, and the right connections,” says Paul.
“How much do I pay a CTO, how do I set up in the US? Who do I talk to about an intellectual property licensing agreement? These are the types of questions founders ask, and our job is to help them find the answers.”
Often Icehouse Ventures mentors will have an industry or even geographic specialisation suitable to assisting a founder’s venture. But Icehouse also facilitates collaboration between extremely busy founders.
Founder retreats boost collaboration
Icehouse Ventures organises an annual retreat to Great Barrier Island for around 50 of its founders.
“There’s no agenda, no sponsors, no partners, no investors, no pitches,” says Paul.
“It's just a chance to be in a comfortable environment with other people that are like them facing similar challenges. They can move mountains for each other in ways we can’t.”
Another retreat recently connected 15 female founders. Icehouse Venture’s skill in raising investment capital - it manages $200 million of invested funds and adds $35-$45 million in new investments each year, sees it play a complementary role to other incubators around the country.
“A lot of the other incubators and accelerators focus on the formative days of the entrepreneurial journey,” says Paul.
“We can provide significant capital and resources from that point onwards.”
This has led to fruitful collaborations with the likes of Creative HQ, which nurtured share trading platform provider Sharesies through its accelerator programme. Icehouse then came on board as an investor and has added more investment in subsequent fundraising rounds.
Icehouse Ventures has also invested in Hnry, Chatterize and Publons, all of which started out at Creative HQ.
Icehouse Ventures tech incubator participant Halter started out with an ingenious idea – a smart collar cows could wear that trains them to stay within a virtually fenced area. Its founder, Graig Piggott, was an intern at Rocket Lab and received mentorship from the rocket company’s founder, Peter Beck, before joining Icehouse Ventures.
“Halter is the one startup out of the 260 that we’ve funded that could actually become a multibillion-dollar business, without even leaving New Zealand shores,” says Paul.
Often, says Paul, the role of Icehouse is to step out of the way of founders once funding is in place.
“We nudge them along, but the real success and growth comes through unbelievable acts by great founders, and sometimes just insane persistence.”
Paul wants to give more New Zealanders the opportunity to invest in our most promising startups. In 2019, the KiwiSaver scheme Simplicity joined Sir Stephen Tindall and Jarden in contributing to Icehouse Ventures’ fund.
Around 30 high-growth Kiwi startups will get $1 million, $10 million of investment from Icehouse Ventures over the next two to three years, thanks to its new $85 million IVX fund which is designed to fill the expansion capital funding gap.
For Paul, the expanded investment fund represents a golden opportunity to help founders it’s supported, and others new to Icehouse Ventures, to really take flight.
“I believe that in aggregate, brilliant and driven founders trying to build innovations to address problems are going to create more value than any other asset type in the world.”
Callaghan Innovation provides funding to a national network of founder incubators and accelerators that help early-stage, high-growth startups build sustainable businesses.
Updated: 17 March 2022