Icehouse Ventures: Seed Fund III

key Details

• $30m fund
• Portfolio of up to 40 companies
• Five year investment period
• Investing in exceptional early stage New Zealand startups with global opportunities
• $50k minimum investment drawn in equal tranches over four years
• 2% management fee pa for first the five years only
• 20% carried interest over the preferred return hurdle
• Preferred return hurdle: 5% compounding annually
• Limited Partnership Structure

Fund Summary

World Class Venture is Born in New Zealand

Visionary founders around the world- and at all times- are building solutions, platforms, and products that will define the world we live in for generations to come.

They're creating new markets, solving existential global issues, creating the technology for us to become an interplanetary species, and building innovative solutions which will radically disrupt incumbents. The value being created is immense.

Many of these founders and their companies are in New Zealand.

Over the past five years dozens of New Zealand startups have grown into $100m+ and $1b+ businesses. These include Sharesies, Halter, and First AML who we backed when they first started. A few have sold or IPO'd and a number are still operating privately.

No matter their journey, all of them are contributing to breeding the next generation of founders. Indeed the founders of Halter and Partly worked at Rocket Lab and the founders of Sharesies at Xero. The founders of Avertana and Mint were early employees at deep tech unicorn Lanzatech. Nearly half of the startups we have funded are led by either second time founders or were key members of other startups.

The next generation is poised to be the largest, boldest, and most experienced New Zealand's ever seen. They will also be the most sought-after. As one of New Zealand's oldest, largest, and most-active seed stage investors, Icehouse Ventures will be a key player in investing in and supporting the most promising entrepreneurs from the most promising generation.

IV Seed Fund III is your opportunity to join us as we invest in 30-40 startups over the next three to four years.

Our Advantage: Visibility

We are well positioned to see the majority of NZ's early stage startups.

Our network of 1,500 investors and 280+ portfolio companies provides unprecedented brand exposure, advocacy, connections, and referrals. Many of the most promising startups we have funded including Mint Innovation, First AML, Sharesies, and Halter were referred to us by our community.

Of our last 50 investments, 80% were from referrals.

We have the largest venture investment team in New Zealand, hold the most investor events, coordinate the largest founder community, operate the largest talent platform, and invest the most capital into the largest number of startups.

We also manage a deep tech fund in partnership with Outset Ventures, which operates the only deep tech lab facility of its type in New Zealand. Outset Ventures is the birthplace of Rocket Lab, Lanzatech, Mint Innovation, Avertana, and many others.

Our Advantage: Live Combat Experience

Over nearly 20 years we have completed 287 investments, supported hundreds of follow on rounds, assessed thousands of opportunities, experienced 40 losses, and enjoyed 20 positive exits.

We have led rounds, co-invested with others, successfully and unsuccessfully competed for allocations, co-invested and gone it alone, passed when we should have invested and invested when we should have passed.

We have had our hypotheses validated and invalidated, have had legal and commercial terms support us and undermine us, and have provided transformational support to founders and had others succeed without much assistance from us.

We have backed individuals only armed with pitch decks and funded companies with 500+ employees generating >$50m in revenue.

We have invested in HR software, precious metal bio-refineries, intelligent collars for cows, eco-friendly shampoo, satellite propulsion, anti-money laundering software, regrowing human skin, and so much more.

Our Advantage: Desirability

Reputation

Founders in the market know us as active, engaged, and aligned investors. We benefit from our association as investors with many of New Zealand's most high profile startups.

Resources and insights

Our founders can tap into an unprecedented database of insights, examples, and templates developed from our 280+ investments.

Founder Network

We have New Zealand's largest founder network. This community are willing and able to share their knowledge and experience with fellow founders.

Follow On Capital

We have a $110m late stage venture fund to fuel the growth of our top performing portfolio companies. We also have extensive relationships with tier 1 growth investors overseas.

Platform

We have a dedicated and expanding platform to help our founders solves the most pressing issued to their scaling, notably talent and hiring.

Our Investment Philosophy

We seek to invest in:

• Exceptional teams with unique perspectives, intellectual firepower, and massive ambitions.
• Markets that are large, growing, accessible, and have numerous (not few) and valuable potential customers.
• Products and technologies that have the potential to be significantly greater than the status quo or apex incumbent’s.
• Highly dedicated leaders who know when to discard the consensus and have incredible perseverance.
• Innovative solutions to difficult problems and innovative business models.
• Companies developing strong obstacles to imitation, whether that be by moving very fast and capturing market share, building proprietary intellectual property, or both.
• Products and technologies that not only address particularly painful and urgent customer problems of today, but burgeoning problems that will likely be significant tomorrow.
• Exceptional timing: where specific founder domain expertise, technological advancement, and the evolution of a customer need eclipse.

Case Studies

Market Overview

The New Zealand early stage ecosystem is growing rapidly. In 2020, annual early stage investment volumes from angel groups and venture firms grew by 48% and reached $160m. Icehouse Ventures represented 25% of that total capital invested. We expect to see this growth continue over the coming decade.

There are a number of macro conditions that underpin the thesis for early stage venture investment in New Zealand:

• New Zealand tech companies are global from day one by design and necessity. Given the natural constraints of a small domestic market, there is often little focus on building a product that doesn't have the potential for global application and scale.
• New Zealand's entrepreneurial DNA and first principles problem solving approach means solutions are often novel and simple, and frequently lack over-engineered complexity.
• A high trust business environment that is globally recognised. New Zealand is one of the least corrupt nations and one of the easiest countries to operate a business in.
• In recent years there have been a number of high profile exits. This is now resulting in a recycling of talent and capital into new innovation. This is an important step in the maturation of the New Zealand venture ecosystem. In the past 12 months we have seen exits from Vend ($450m), Seequent ($1b), EzyVet ($216m), Timely ($100m+) TradeGecko (USD80m), and Cin7 ($133m).
• Historically, the New Zealand venture environment has been capital constrained. New Zealand has low operational costs relative to most other Western countries. New Zealand companies are conditioned for capital efficiency.

Team

Investment via Snowball Effect

Investing in Seed Fund III provides a simple way for wholesale investors to get exposure to early stage NZ VC opportunities. All investments will be held within Snowball Nominees, and will be available to view on Orchestra. Because the fund is a Limited Partnership, only wholesale investors are able to invest.