Just over six years ago, Fonterra colleagues Simeon Burnett, Richard Allen and Francis Reid co-founded New Zealand’s first private equity investment marketplace, Snowball Effect.
The trio’s mission was clear, to offer Kiwi companies an alternative way to raise capital and provide investors with access to interesting, private opportunities that weren’t listed on the NZX.
“When we looked at the New Zealand investment landscape and capital market at that time, we felt there was plenty of room for innovation and improvement through the use of technology,” recalls Snowball Effect’s CEO Simeon Burnett. “We spotted an opportunity to create an investment marketplace that was simple to use and relevant for Kiwis.”
Since launching the first capital raise offer in August 2014, Snowball Effect has successfully completed 60 public, private and wholesale offers, raising more than $75 million for 45 companies. “I’m really proud of what we’ve achieved over the last six years and the companies that have trusted us to raise capital for them,” says Simeon. “I’m also proud of the quality of the team we’ve built, the headway we’ve made with Snowball Effect and introduction of new products such as Orchestra and the Secondary Market technology that we’re building at the moment.” However, Simeon believes there is still plenty of work to do as the team looks at new opportunities both here and offshore that they hope to seize in the next five years.
When he reflects on highlights from the last six years, Simeon says Snowball Effect’s first raise with Renaissance Brewery will always stand out. “It was the first public raise done in New Zealand and created a real buzz. More recently, the Little Island raise we did during the first COVID-19 lockdown stands out, as it was a fairly unique time to be doing a capital raise and received a positive response from investors.”
The launch of Orchestra, a centralised company and stakeholder hub, also stands out. “It’s been really enjoyable working with Casey Eden on Orchestra. He brings a different skill set with his background and focus on sales, and it's been good to have his different perspective on the team.
“I’m excited about the different products, like Orchestra, that we’ve built and launched. Each one of them is part of Snowball’s ecosystem, they all work together, but are also unique. I’m excited to see where all of our products will take us over the next few years.”
During the last six months, Snowball Effect, along with other New Zealand businesses, has found themselves navigating an ever-changing environment as a result of COVID-19. Simeon says the lockdown provided an opportunity for the team to focus on improving internal systems. “We’ve been very fortunate that, to date, COVID-19 hasn’t had a massive impact on us. Everything we do is online, so the team has been able to continue their day jobs from home when needed. However, some of the companies we work with have been hit pretty hard, so that’s caused some knock-on effects for us.”
Simeon acknowledges that Snowball Effect’s success over the last six years owes itself to a range of advisors, supporters and team members. “People like Josh Daniell and Ben Tan joined Snowball Effect early on as co-founders and took a punt on what we were doing. Then shortly after that people like Bill O’Boyle joined. The efforts they have put in really helped us set a strong foundation. My other co-founders, Francis and Richie have always been really supportive of what we’re doing and have gone out of their way to help as much as they can.”
Simeon also acknowledges the hard work of the wider Snowball Effect team, particularly Alastair Lawrence, who has lent his time and business expertise to help shape Snowball Effect.
“I also want to thank the companies who have trusted us to undertake their capital raise for them, as well as the investors who have warmed to the opportunity to back private growth opportunities.”