Quarterly Company Progress Report June 2018

Welcome to the June 2018 Quarterly Company Progress Report. This report covers details reported to shareholders on the progress that companies have made since our last update. At the end of the report there’s also an update covering the latest happenings at Snowball Effect.

The information below is provided by the companies themselves, and participation in the report is at each company's discretion. Many companies have chosen to moderate the level of financial / commercial information included below due to sensitivity, with shareholders typically receiving more fulsome detail on company progress. There are a small number of companies not included in the current report due to the timing of their shareholder reports. Updates from these companies will be added when their reports are made available to shareholders.


Zeffer is the largest independent, dedicated cider producer in New Zealand. The company raised $1.2m on Snowball Effect in June 2017, and has just closed another $2.4m round on Snowball Effect in June 2018.

Highlights for the quarter included:

  • We successfully closed our capital raise and welcomed 220 new shareholders to the company. We set out to raise $1.8m, and due to a strategic investor coming on board, we extended the raise to $2.4m
  • We have commenced construction of our Zeffer Tap Room and Bar, the timing for this is on track and it will be a fantastic space to enjoy the Zeffer range while overlooking our home block cider apple orchard. The Tap Room and Bar will be opening at the beginning of October 2018.
  • Volume for the quarter was in line with our budget with higher than forecasted export shipments offsetting slightly lower than forecast domestic sales.
  • We completed a full review of our cider range, formats and packaging for the domestic market. This has resulted in some significant changes which will roll out in September and October this year.
  • We recruited our Greater China Sales Manager to oversee our Chinese sales team and strategy and he is now up and running in China.

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Designer Wardrobe

Designer Wardrobe was founded in 2012 by Donielle Brooke as a New Zealand based fashion marketplace and successfully raised $1.7 million through Snowball Effect in May 2017, and a further $912k in June 2018.

  • We successfully raised $912k in June through Snowball Effect, with significant capital being dedicated to growing our Direct Rental business
  • The month of May was a record revenue month, driven by excellent rental performance resulting from 18% month over month growth of this category since the end of 2017
  • We are tracking ahead of our forecasted revenue due to solid execution of our business plan
  • Our P2P trading has continued to perform strongly, with a record 12.2k listings sold during the quarter.
  • We have now built our user base to over 140,000 members
  • We have maintained a 50% repeat rate from Direct Rental customers, indicating that our users are continuing to enjoy using our service. As only 2.5% of our total registered user base have used our Direct Rental Service, we still have plenty of room to grow
  • We have successfully rolled out our Minimum Fee structure on both P2P Selling and Renting and will see the upside to revenue in the coming months

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Squirrel Group is made up of Squirrel Mortgages, Squirrel Money, and TenanSee. It is this unique combination of (proprietary) technology working alongside a strong brand and a growing market share of mortgage brokering that puts Squirrel in the right place at the right time to lead market disruption.

Highlights for the quarter included:

  • For the first time since the $3.4m capital raise through Snowball Effect in 2016, we have achieved positive operating cash flow, with that result expected to continue from this point forward.
  • Mortgage settlement volumes in the quarter were down 9% against the same quarter last year, although the June 2018 settlements saw our biggest year-on-year increase since March 2017.
  • Commission claw-backs are down 21% on the previous quarter, while cash received by trail commissions are up 11% on the previous quarter
  • Loans originated through the Squirrel Money platform grew by 13% in the quarter, with 9% growth in the active loan book
  • Operating costs were down 5% on the previous quarter and in line with the prior year

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Invivo isn’t just a winery; it’s a startup, taking on the world one mouthful at a time. We were founded by a couple of old school friends that liked wine so much they started a winery to make some – whatever it took. Like it says in our ads, our first vintages really were made from “Grapes, time and two maxed out credit cards!”  Invivo currently sells in New Zealand and 17 offshore markets. Invivo was the first company in New Zealand to raise the legal maximum of $2m in equity crowdfunding.

  • We successfully closed our capital raise and became the largest equity crowdfunded company in New Zealand. We have now received more than $4 million from over 687 investors through equity crowdfunding and wholesale investment.
  • We will now be focusing on driving further growth of our current range and creating new opportunities.
  • We're planning to expand into the US through a new celebrity collaboration, and build on the opportunities in Australia, the UK and Ireland, all while growing our team and our domestic market through our NZ partner, Lion.
  • We have some exciting new Invivo cases for our 2018 vintage release with our refreshed branding and logo.
  • Since our previous capital raise in 2015, we have grown sales from $3.7m to $13.9m this financial year.

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SOS is a medically formulated hydration drink mix that’s as effective as an IV drip. SOS raised over $250k through Snowball Effect in January 2016.

Highlights for Q2 2018:

  • Strong US and UK sales have made the last quarter the largest to date for SOS since its inception.
  • We are 42% ahead of our 2018 budgeted forecast for this half year, and 48% up on the same period last year.
  • Compared to the first half of last year, we are up 89% on like for like sales in the US, UK and Online.
  • We have grown revenues by 87% on the last quarter.
  • Our total expenses per quarter have remained consistent for the last two years.
  • SOS UK made a profit in March 2018.
  • The newly launched SOS Ready to Drink in NZ is beginning to gain traction, with marketing and PR planned for NZ summer (when the majority of hydration beverages is consumed).
  • SOS has a line extension of products in the US as we are moving to larger format packaging. We will also be introducing one new flavour: SOS watermelon.

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Punakaiki Fund is one of the most active venture capital investors in New Zealand, with investments in 20 high-growth companies. Punakaiki Fund raised over $3.2m through Snowball Effect, over three separate offers in 2015 and 2016.

Highlights for the quarter included:

  • The Investor Net Asset Value of the fund was $34.5 million (or $19.88 per share), an increase from the 31 March 2018 Net Asset Value of $33.1m.
  • $940k was invested in Mobi2Go, Melon Health, RedSeed and Devoli.
  • Following the end of the June quarter, additional investments totalling $275k were made into Coherent Solutions, Devoli and Weirdly, with further investments being assessed at the end of the quarter.
  • Following the sale of Linewize to ASX-listed Family Zone (FZO) in the December 2017 quarter, net proceeds of $1.1m were received from the sale of Punakaiki Fund’s Family Zone shares.
  • A net decrease of $169k in the value of Punakaiki Fund’s investments was recognised at the end of the June 2018 quarter compared to those values set out in the March 2018 quarterly report.
  • Punakaiki Fund successfully raised $1.7m in cash in a new share offer to wholesale investors.
  • A wholesale capital raise is being considered late in the September 2018 quarter or early in the December 2018 quarter.

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Snowball Effect

Snowball Effect is an online investment marketplace. Our mission is to simplify investment into high growth Kiwi companies. We’ve been funded by existing shareholders and cashflow to date to support the continued growth and development of the equity capital market for early-mid stage New Zealand growth businesses.

Highlights for the quarter ending June 2018:

  • $6.9 million was raised during the quarter, including a $2m private offer for ArchiPro, a $2.4m raise for Zeffer, and a $1.7m raise for Invivo. A total of $40 million has been raised to date.
  • Average investment this quarter was $8.7k from around 800 investors. Overall, average investment amount to date is around $7.3k from 3,190 investors.
  • The wholesale investor database has grown to over 1,400 members. Around 570 members have completed their Investor Profile and 351 have indicated an interest in becoming a director or advisor to growth companies.
  • Snowball Effect is looking for a new director to join our energetic and growing team. This role is responsible for working with companies throughout the capital raising process. Further details on the role can be found via the position description.
  • The company has no capital raising plans at this stage.

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