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Speaker 1: Forget software, apps and video games. Deep tech is currently

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Speaker 1: the area tracting the biggest share of early stage investment

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Speaker 1: into startup companies here in New Zealand.

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Speaker 2: That's the engineering and science driven stuff, technically hard, risky,

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Speaker 2: but with a big potential payoff.

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Speaker 1: This week on the Business of Tech powered by Two

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Speaker 1: Degrees Business, we look at the last decade of deep

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Speaker 1: tech investment, with leading investment firm wnt Ventures turning ten

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Speaker 1: this month and the government's own Deep Tech Incubator program

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Speaker 1: celebrating its tenure milestone too.

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Speaker 3: The opportunity in New Zealand for deep tech is really

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Speaker 3: it's captured a global trend right. There's been a massive

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Speaker 3: global trend towards climate investing, sustainability and impact investing, and

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Speaker 3: really for the most part, deep tech is synonymous with

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Speaker 3: those things.

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Speaker 2: That was Kyle Jones, managing partner from Totonga based WNTU Ventures,

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Speaker 2: who we will be hearing more from shortly.

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Speaker 1: First up though we are looking at some serious deep

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Speaker 1: tech or deep space tech as the case may be.

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Speaker 1: A flurry of space related announcements with rocket Lab winning

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Speaker 1: a NASA deal that has a potential multi billion dollar payoff.

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Speaker 1: Peter Beck fills us in on that soon, but Ben

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Speaker 1: two big successes in recent days for rocket labs only

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Speaker 1: real rival in the rocket payload space at the moment.

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Speaker 2: Yeah, SpaceX has been doing pretty well for itself. Elon

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Speaker 2: Musk owned SpaceX. They've first of all, I think the

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Speaker 2: most high profile one was that they managed to catch

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Speaker 2: a rocket out of midair with chopsticks like mister Miyagi

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Speaker 2: and a fly. Maybe that's a little bit facetious, but

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Speaker 2: they slowed a rocket that was descending back to Earth

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Speaker 2: enough that two big arms could come back and clamp

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Speaker 2: either side of it, preventing a more rocky touchdown.

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Speaker 1: Yeah. And it's not just any rocket either, it's this

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Speaker 1: is the sort of their starship rocket, which can carry

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Speaker 1: a lot of equipment and or crew as well. So

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Speaker 1: this is really essential to their plans for the Moon

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Speaker 1: and going to Mars and putting more equipment into space.

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Speaker 1: So to be able to capture the it was the

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Speaker 1: booster of that rocket. The actual spaceship part came down

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Speaker 1: into the ocean. But to be able to capture that

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Speaker 1: in such a technically complex way, to be able to

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Speaker 1: do that for the first time, you know the implications

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Speaker 1: of that for reusability of rockets is massive. It means

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Speaker 1: that you need a lot less equipment to be on

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Speaker 1: the landing zone there because obviously SpaceX has been landing

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Speaker 1: rockets back on the TIMAC they know how to do that,

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Speaker 1: but to be able to grab them out of mid

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Speaker 1: air is in the long run hugely cheaper. And that's

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Speaker 1: what the pictures with Starship. Not only more payloads so

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Speaker 1: lower cost per ton of stuff you're putting into space,

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Speaker 1: but that reusability has always been a big thing for SpaceX.

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Speaker 1: I think there was a lot of relief in the

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Speaker 1: company that that one went well. They went expecting it

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Speaker 1: to go as well as it did first time, and.

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Speaker 2: Watching it myself, I wasn't expecting it to finish well

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Speaker 2: because it was got a shaky entry there.

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Speaker 1: Yeah, you've got to, you know, give credit to them.

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Speaker 1: That was, you know, incredible achievement. And followed hard on

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Speaker 1: on the back of that another SpaceX sort of mission

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Speaker 1: with with NASA. This is the heavy Falcon rocket launched

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Speaker 1: to Jupiter and in particularly is keen to have a

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Speaker 1: look at the moon Europa which orbits Jupiter and Musk

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Speaker 1: has said and that NASA backs this up. Probably the

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Speaker 1: one place in the Solar System that if there is life,

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Speaker 1: is likely to be there because of the frozen ice there,

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Speaker 1: they think beneath the surface of that there may be

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Speaker 1: traces of life.

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Speaker 2: Yeah, it's Europa is kind of famous among space enthusiasts.

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Speaker 2: You know, as a as a young kid, one of

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Speaker 2: the first things you learn is that you know, Europa

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Speaker 2: probably has water and maybe life on it, and so

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Speaker 2: so to be able to actually get something to that moon,

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Speaker 2: to go inside and actually potentially get some information that

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Speaker 2: could be pretty incredible.

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Speaker 1: So Europa Clipper that's literally five and a half years

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Speaker 1: away from reaching Jupiter. It'll go within twenty five kilometers

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Speaker 1: off Europa's surface and do I think at least forty

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Speaker 1: nine pass bys off Europa before it moves on, and

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Speaker 1: then I think they're going to crash it into one

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Speaker 1: of Jupiter's other moons. So that's going to be cool

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Speaker 1: to see how all of that plays out. But meanwhile,

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Speaker 1: you know all of that is going on. Rocket Lab

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Speaker 1: has its own deal that's just been announced with NASA,

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Speaker 1: which is about facilitating the return of rock samples from

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Speaker 1: the surface of Mars, where you know, they've got a rover.

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Speaker 1: Their perseverance has been roving around drilling into the surface

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Speaker 1: of Mars collecting rocks. The question is, now, how do

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Speaker 1: you get them back? Rocket Lab may have the answer.

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Speaker 2: Yeah, a rocket Lab has been selected to do a

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Speaker 2: survey on how they could potentially get those samples and

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Speaker 2: get back for NASA, and they say that they're going

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Speaker 2: to produce a plan for an end to end mission

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Speaker 2: that will deliver at a fraction of the cost that NASA,

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Speaker 2: or they say their competitors can do it as well.

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Speaker 2: NASA initially started doing the numbers and they came to

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Speaker 2: a number of about eleven billion US dollars that this

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Speaker 2: would cost. So that's when they thought, maybe we should

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Speaker 2: stick this one out into the market and see if

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Speaker 2: somebody can do better. And rocket Lab thinks that it can.

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Speaker 2: They're being paid about six hundred k US with about

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Speaker 2: a million New Zealand dollars in order to do the survey,

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Speaker 2: which is a nice little boost. But essentially the idea

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Speaker 2: is if they do a good enough job, they could

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Speaker 2: end up being the recipient of this massive contract that

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Speaker 2: would be years or decades long as well.

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Speaker 1: Yeah, and this seems like a bit of a rescue

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Speaker 1: mission really, that eleven billion dollar figure. Really that was

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Speaker 1: the escalating sort of budget when this project ran into trouble.

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Speaker 1: It involves the European Space Agency, so like with a

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Speaker 1: lot of things, the budgets just keep blowing out and

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Speaker 1: getting bigger and bigger and bigger, and NASA has been

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Speaker 1: sort of plagued with that, so you know they really

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Speaker 1: wanted They went to all the effort to get Perseverance

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Speaker 1: onto the surface of Mars and other Mars rovers as well.

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Speaker 1: You know, ideally you want to get those materials back

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Speaker 1: SOS scientists can analyze them. So there's a lot riding

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Speaker 1: on this. This is a small contract for rocket Lab.

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Speaker 1: It's sort of a proof of concept or a scoping project,

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Speaker 1: but could lead to what would potentially be rocket Lab's

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Speaker 1: most complex mission. You're not just talking about using one

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Speaker 1: of their rockets to get equipment to Mars, but landing

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Speaker 1: on the surface, picking stuff up and getting it back.

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Speaker 1: So you caught up with Sir Peter Beck, rocket lab

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Speaker 1: co founder and CEO, about this. What's the sense you

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Speaker 1: get about how important he views this in in the

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Speaker 1: sort of the range of things that rocket Lab currently

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Speaker 1: has on the go.

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Speaker 2: I think that he is very, very excited by it.

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Speaker 2: I think that he thinks Rocket Lab has a really

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Speaker 2: good opportunity to be to be selected for the mission.

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Speaker 2: I don't think he thinks it's make or break for

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Speaker 2: the company, because he said he is extremely confident about

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Speaker 2: the future of the company. But it's the kind of

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Speaker 2: thing that I think he sees as being extremely valuable

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Speaker 2: for the company in terms of reputation, but also you know,

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Speaker 2: the commercial The commercial aspect to it is pretty massive.

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Speaker 2: He also talked a little bit about the physics challenge

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Speaker 2: of it, the engineering challenge of it. So here's how

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Speaker 2: he kind of explained what is going to need to

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Speaker 2: happen to complete this mission.

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Speaker 4: If you can have enough energy to get to the Moon,

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Speaker 4: it's surprisingly small amount of energy. You need to get

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Speaker 4: to Mars, and that's okay if you're just going to Mars,

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Speaker 4: but you're not. You need to go to Mars and

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Speaker 4: then land on Mars, and that's tough. But also you

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Speaker 4: have to carry all of the mass and energy to

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Speaker 4: escape Mars. It is very very difficult. And then you know,

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Speaker 4: as the requirements of the program, you have to bring

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Speaker 4: it back, so you have to gain positive C three

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Speaker 4: out of Mars and then back into the Earth gravity system,

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Speaker 4: and then you know you're coming from Mars or your

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Speaker 4: velocity is super high, so you have to slow down

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Speaker 4: and so you don't just burn up in the atmosphere

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Speaker 4: and then re enter and land these things safely, and

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Speaker 4: you have all the planetary protection elements as well, because

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Speaker 4: you know, we can't bring Earth germs to Mars or

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Speaker 4: Mars germs to Earth. It's just crazy, you know, it's

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Speaker 4: technical craziness. But a lot of those really really fundamental

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Speaker 4: elements we've already demonstrated that we can do. I think

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Speaker 4: that's why we feel well placed to have a crack.

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Speaker 1: Okay, so technically very difficult, there's no shoying away from that,

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Speaker 1: but in many ways that it's what draws the best

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Speaker 1: engineering talent. So I guess this is something that they

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Speaker 1: can hold up both in the US and New Zealand

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Speaker 1: as something do you want to come and work on

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Speaker 1: one of the most cutting edge, difficult challenges in space.

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Speaker 1: Come to Rocket Lab for the opportunity to do that.

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Speaker 2: Exactly. That's exactly what Back kind of said to me.

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Speaker 2: Here's how he put it.

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Speaker 4: People come to rocket Lab because we build beautiful stuff

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Speaker 4: that works beautifully. So I think I think everybody understands that,

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Speaker 4: of course, these these very high, high profile national missions

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Speaker 4: build build great reputation, But I don't I don't think

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Speaker 4: it makes all breaks the company with respect to you know,

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Speaker 4: commercial customers coming to us to execute on their projects.

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Speaker 4: But I mean, you know, it is from an engineer's perspective,

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Speaker 4: it's an absolute dream to work on such a such

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Speaker 4: an incredible, incredible project. You know that these aren't trivial contracts.

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Speaker 4: I mean, NASA decided to bid this out to industry

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Speaker 4: after you know, their internal program reached a price tag

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Speaker 4: of eleven billion dollars USD, so you know it has

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Speaker 4: to be cheaper than that. But you know, this is

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Speaker 4: a multi multi billion dollar project and program spread over

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Speaker 4: a number of years, So in its own right, it's

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Speaker 4: a it's a very large commercial opportunity.

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Speaker 2: So there's no real overstating how valuable this kind of

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Speaker 2: contract is for rocket Lab. But also Peter Beck is

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Speaker 2: at heart kind of a space nerd as well, you know,

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Speaker 2: and so for him it's also a really exciting thing

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Speaker 2: to get to be part of, just in terms of

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Speaker 2: the historical value of it. So here's what he kind

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Speaker 2: of said about some of the cynicism around these expensive

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Speaker 2: space projects.

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Speaker 4: I think a lot of people look at these kind

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Speaker 4: of projects and go, you know, with all the all

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Speaker 4: of the troubles going on in the world and you know,

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Speaker 4: depressed economies, why are we going to Mars to pick

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Speaker 4: up some stupid rock? You know, it would be very

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Speaker 4: easy to to kind of fall into that. But I

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Speaker 4: think it you know that both the things that you did,

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Speaker 4: the technology you develop along the way, I think, you know,

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Speaker 4: the scientific discovery that's going to be heralded from from

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Speaker 4: actually having these samples is I think it's going to

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Speaker 4: be enormous because they weren't just willing nelly willy nelly

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Speaker 4: rocks right there. They're things that that that scientists really

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Speaker 4: want to understand and and I think it can open,

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Speaker 4: you know, answer bigger questions of origins of life. You know,

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Speaker 4: was the life on Mars and all of these kinds

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Speaker 4: of things and and those those are those are big

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Speaker 4: important questions to answer the benefit all all of mankind.

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Speaker 1: So, Peter Beck, there a very interesting project that they

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Speaker 1: are embiking on. If they can really prove their their worth.

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Speaker 1: They've done that with NASA before they've had the Moon mission.

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Speaker 1: They're involved in another Mars related mission. But then you've

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Speaker 1: got in the background again, you've got Space x one

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Speaker 1: to go to Mars as well. So I wonder if

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Speaker 1: they're going to be on a sort of a collision

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Speaker 1: course with this big Elon Musk run company for that

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Speaker 1: opportunity to get the big contract from from NASA, the

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Speaker 1: one that is going to result maybe in billions of

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Speaker 1: dollars of revenue.

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Speaker 2: Yeah, it's going to come down to I think the

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Speaker 2: finer points. They're both going to have big rockets. Assuming

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Speaker 2: everything goes well with Neutron, They're both going to have

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Speaker 2: reliable big rockets as well, which is super important. Who

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Speaker 2: can deliver the most around.

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Speaker 4: That as well?

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Speaker 2: Or will it end up being we're going to use

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Speaker 2: the Falcon or the Starship for the actual rocket side

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Speaker 2: of things, and then we want to use you know,

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Speaker 2: some of the other service stuff that Rocket Lab offers

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Speaker 2: in order to support that. Maybe it will end up

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Speaker 2: being something like that, but I don't necessarily think it

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Speaker 2: will because Peter Beck spoke at length about the importance

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Speaker 2: of vertical integration in keeping things, you know, efficient and

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Speaker 2: deliverable at a reasonable price. So either way, I'm definitely

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Speaker 2: going to be an interesting thing to watch over the

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Speaker 2: coming year as NASA makes up its mind.

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Speaker 1: It sure will be. And rocket Lab, of course, is

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Speaker 1: one of our best known startups, but it's easy to

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Speaker 1: forget that the company is nearly twenty years old now.

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Speaker 1: It really took a decade of development to get to

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Speaker 1: the point where it could make regular satellite launches for

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Speaker 1: its customers.

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Speaker 2: And yeah, that really epitomizes deep tech, which is kind

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Speaker 2: of characterized by lengthy research and development and the need

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Speaker 2: for large capital investment before it can be really successfully commercialized.

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Speaker 1: Rocket Science is classic deep tech hard mathematics, physics, but

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Speaker 1: also material science and even software.

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Speaker 2: Deep tech is a fairly loose term, and it also

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Speaker 2: extends to cover medical related technology and artificial intelligence.

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Speaker 1: The point is it's not an easy pathway to success,

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Speaker 1: but the barriers you have to get over to be

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Speaker 1: successful over very high, so the rewards can be great.

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Speaker 1: So it's pleasing to see a greater focus here in

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Speaker 1: New Zealand on deep tech as investors spot opportunities in

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Speaker 1: our research system and are willing to back them with

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Speaker 1: investment dollars.

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Speaker 2: And WNT Ventures is one of the country's leading deep

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Speaker 2: tech investors. It's just turned ten years old and has

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Speaker 2: completed three funds to back startups and is now eyeing

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Speaker 2: up its fourth.

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Speaker 1: Its arrival on the deep tech investment scene really went

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Speaker 1: hand in hand with the establishment of Callahan Innovation's Deep

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Speaker 1: Tech Incubator program in twenty fourteen. It selected a handful

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Speaker 1: of deep tech investment firms, WNT among them, to incubate

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Speaker 1: startups focused on hard science and engineering related opportunities.

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Speaker 2: It offered a repayable grant to give them some seed funding,

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Speaker 2: and the incubator host had to chip in some cash

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Speaker 2: to go with it.

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Speaker 1: A new report out from Callahan, which I was involved

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Speaker 1: in writing, looks back over that decade and the progress

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Speaker 1: to date and the numbers look quite promising. Eighty odd

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Speaker 1: companies received mentorship and crucially funding, seventy two percent success

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Speaker 1: rate and in a risky business, they've done quite well.

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Speaker 1: They've gone on to raise at least three hundred million

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Speaker 1: in follow on capital, which is a fair chunk of money.

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Speaker 2: Yeah, and given WNT Ventures was there from the start

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Speaker 2: and is the only incubator to be re selected to

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Speaker 2: participate in the Deep Deach Incubator program, then who's better

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Speaker 2: to reflect on the past decade than managing partner of WNT,

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Speaker 2: Carl Jones. So on that. Here's Peter's interview with Carl.

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Speaker 1: Carle Jones. Welcome to the Business of Tech. Thanks so

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Speaker 1: much for coming on the show.

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Speaker 5: No problem, Peter, thanks for inviting me.

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Speaker 1: It's a real opportune time to talk to you. Ten

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Speaker 1: years of WNT ventures started in twenty fourteen. Also ten

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Speaker 1: years of the government's Deep Tech Incubator program. We're going

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Speaker 1: to talk about that, but very much your progress over

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Speaker 1: the last decade has sort of been intertwined with that

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Speaker 1: government effort. But Kyle, give us the origin story, the

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Speaker 1: genesis of WNT. Take us back to twenty fourteen or

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Speaker 1: twenty thirteen when you were sort of looking at setting

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Speaker 1: up this. What was the impetus behind it back then?

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Speaker 3: Yeah, well, actually back the time, I was working with

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Speaker 3: what's now in New Zealand Growth Capital Partners used to

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Speaker 3: be New Zealand Venture Investment funder, working alongside the likes

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Speaker 3: of Francesca Banger and Chris Twists and Aaron Tragascus at

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Speaker 3: the time, and I was I think I'd been traveling

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Speaker 3: with some we were in Hong Kong with some investor

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Speaker 3: groups that we were taking over there to establish the

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Speaker 3: We had established a Taiwan fund actually at the time.

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Speaker 3: And one of the guys that was on that trip

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Speaker 3: with me was Steve Saunders, who's subsequently founded Robotics Plus

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Speaker 3: and was integral with rocket Apples and things like that.

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Speaker 3: And we were chatting and he indicated I was interested

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Speaker 3: in coming back to my hometown of Totonga, and he said, well,

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Speaker 3: I might have an opportunity for you at some point,

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Speaker 3: and so that that was sort of the genesis of

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Speaker 3: me being brought into W and T. But W and

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Speaker 3: T itself was really established in response to the tech

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Speaker 3: Incubata scheme.

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Speaker 5: So the W, the N and the T.

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Speaker 3: I won't delve into the where those letters come from,

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Speaker 3: but they are effectively they're, you know, the three founding

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Speaker 3: kind of parties involved, and they would all applied separately

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Speaker 3: for the tech Incubota scheme and eventually they said, look,

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Speaker 3: we're not going to get three of them here, why

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Speaker 3: don't we collaborate And so W and T really was

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Speaker 3: born out of a collaboration of a group of entrepreneurs

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Speaker 3: and investors and the likes from mainly from the Bad

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Speaker 3: Penny region, also Wellington as well, and ultimately they asked

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Speaker 3: me to come and set it up for them, and

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Speaker 3: here we are ten years later, with a bit more

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Speaker 3: gray here and more experience, but you know, having had

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Speaker 3: a lot of fun and actually a lot of a

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Speaker 3: success in the last ten years as well.

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Speaker 5: So it's been been a really interesting journey you have.

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Speaker 1: And we'll look at that success. You've just published sort

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Speaker 1: of an update giving us some of the numbers, which

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Speaker 1: is really useful, so we'll get into that. I guess

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Speaker 1: the deep tech focus really came from those founders that likes,

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Speaker 1: you know, Robotics Plus and that had that deep tech

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Speaker 1: sort of in their DNA. But I guess around that

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Speaker 1: time or the decade leading up to that, our success

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Speaker 1: really in New Zealand was characterized by software as a service,

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Speaker 1: you know, Zero. We saw vend and other companies Sequence

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Speaker 1: and christ Church did really well, and a lot of

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Speaker 1: them have had really successful exits. We've all always had

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Speaker 1: a sort of an engineering scientific bent in New Zealand,

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Speaker 1: but I guess around twenty ten or so we really

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Speaker 1: saw dedicated interest from an investment point of view into

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Speaker 1: so called deep tech companies. Now WNT has quite a

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Speaker 1: broad portfolio. Take us through what your philosophy is and

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Speaker 1: was back in twenty fourteen about the sorts of companies

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Speaker 1: you wanted to support with funding.

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Speaker 5: Yeah. Yeah, and it has been an interesting journey, I think.

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Speaker 3: I remember prior to that green Button was about the

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Speaker 3: only exit that anyone had for a very long time,

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Speaker 3: and so it was it was touted for it for

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Speaker 3: a long time. So it's nice to see those returns

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Speaker 3: sort of starting to happen a bit more frequently.

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Speaker 5: So how we positioned it, obviously, we had.

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Speaker 3: A group of networks and people around us that had

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Speaker 3: a particular bent towards probably the more engineering side. Wasn't

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Speaker 3: just Steve Saunders from Robotics Plus, but it was so

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Speaker 3: beby Hoem and Totoerzi and McCrae who were part of

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Speaker 3: RAM three D, the titanium three D printing company as well.

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Speaker 3: So there was always that leaning towards the engineering side

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Speaker 3: of things a bit more so.

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Speaker 5: So.

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Speaker 3: The genesis of W and T was really to try

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Speaker 3: and understand where our strengths lay, and we fairly early

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Speaker 3: on ruled out the possibility of investing into pharmaceuticals and

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Speaker 3: human biotech mainly just because it wasn't our wasn't our

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Speaker 3: space and outside of that. You know, reflecting on the

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Speaker 3: industry back then, it was there was pretty small, right

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Speaker 3: there wasn't wasn't as much. I mean it's it's only

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Speaker 3: ten years ago, and it astonishes me how much it's

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Speaker 3: grown in terms of the opportunities. So, you know, we

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Speaker 3: looked at what was out there, and there was a

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Speaker 3: there was plenty of opportunity. But you and I still

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Speaker 3: hold this to some degree. You can't be too too

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Speaker 3: specialized in this in this area. So our specialization was

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Speaker 3: early stage deep tech. Albeit deep tech wasn't a term

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Speaker 3: back then, but early stage science and engineering companies. You know,

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Speaker 3: we liked things that you could see and touch and

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Speaker 3: feel a little bit more so than the software side

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Speaker 3: of things, which was perhaps a little bit harder for us.

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Speaker 3: So tended to have a hardware bent to it, for sure,

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Speaker 3: hardware in the broader sense where whether it's a plant

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Speaker 3: or a handheld product.

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Speaker 5: Yeah.

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Speaker 1: Yeah, And you've you've done everything, a lot of climate

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Speaker 1: tech more recently in Fund three, med tech stuff all

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Speaker 1: the way through to artificial intelligence. You had nearad you

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Speaker 1: invested in that was in your first round, which was

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Speaker 1: sort of high capacity computing. See, you really covered the

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Speaker 1: whole gamut really of what you could consider deep tech.

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Speaker 1: In twenty fourteen, when Callahan Innovation at the time said

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Speaker 1: we're going to make these repayable grants available, I think

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Speaker 1: it was about four hundred thousand, yeah, four fifty times.

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Speaker 1: That's since been increased to seven hundred and fifty thousand.

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Speaker 1: And then of course you as the investor, you put

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Speaker 1: in at least two hundred and fifty thousand or something

396
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Speaker 1: like that in the early stages.

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Speaker 5: Yeah, one fifty on the early stages. Yeah, these days

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Speaker 5: it's two two fifty.

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Speaker 1: Yeah. So how attractive was it to you as sort

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Speaker 1: of an investment company seeing that there was this cash

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Speaker 1: available to those early stage companies from the government in

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Speaker 1: the form of a repayable grant.

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Speaker 3: Yeah, yeah, Look, I mean it was it was naturally

404
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Speaker 3: attractive to us because there was there was probably a

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Speaker 3: lack of private capital coming into the seed stage stage

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Speaker 3: space in New Zealand as it was, so the intention

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Speaker 3: was to encourage private sector to invest and to do

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Speaker 3: that the and to improve the spin out set of

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Speaker 3: the public sector as well, to be to be fair,

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Speaker 3: and part of that rationale was to to say, look,

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Speaker 3: here's some I guess some additional risk capital alongside in

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Speaker 3: private capital. So the structure of it meant that, you know,

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Speaker 3: it encouraged investors to invest and be a part of

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Speaker 3: part of this, you know, this industry and help early

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Speaker 3: stage companies get up and running. And it was it

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Speaker 3: was not only the capital though, right, I mean, the

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Speaker 3: capital was one thing, but it was also and I

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Speaker 3: believe that I wasn't involved in the selection process at

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Speaker 3: the time, but I believe the big part of it

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Speaker 3: was the fact that we had groups of entrepreneurs that

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Speaker 3: have been there and done it before, They've built companies,

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Speaker 3: they had global networks and that sort of stuff, so

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Speaker 3: they were able to help me bring a team around

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Speaker 3: us to help these companies scale. And as we know,

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Speaker 3: global scaling is probably one of the more challenging aspects

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Speaker 3: of building a company from New Zealand. We're not investing

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Speaker 3: into companies that are building for the New Zealand market

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Speaker 3: because there isn't a New Zealand market in the global sense, right,

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Speaker 3: So we need to get off shore really quickly. And

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Speaker 3: so being able to partner with people that have done

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Speaker 3: that before, and that was a really valuable opportunity.

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Speaker 1: Now you're the only company that has been part of

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Speaker 1: that government program the entire length of it. There were

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Speaker 1: an initial cohort of incubators that were set up. There's

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Speaker 1: been a rotation of some of them, some new ones

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Speaker 1: have recently been added. But obviously it's worked for you,

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Speaker 1: that relationship with with Callahan. But as you say, all

438
00:24:02,720 --> 00:24:05,840
Speaker 1: the people who've come around you as part of it

439
00:24:06,200 --> 00:24:08,080
Speaker 1: on this journey, it seems to have worked really well.

440
00:24:08,240 --> 00:24:11,560
Speaker 3: Yeah, And I think that's a reflection of perhaps our

441
00:24:11,600 --> 00:24:16,080
Speaker 3: approach really because you know, we talked with Callahan about

442
00:24:16,080 --> 00:24:19,199
Speaker 3: that in the early days. Is that in our minds

443
00:24:20,040 --> 00:24:24,400
Speaker 3: we're really passionate about making startups successful and supporting startups

444
00:24:24,400 --> 00:24:26,680
Speaker 3: to be successful. But when you look at it from

445
00:24:26,680 --> 00:24:29,280
Speaker 3: a program perspective, and you know, you could look at

446
00:24:29,280 --> 00:24:33,760
Speaker 3: this the same as ZOGCP or or Callahan Innovation. When

447
00:24:33,760 --> 00:24:36,640
Speaker 3: you've got a program like that, what the actual what

448
00:24:36,640 --> 00:24:38,919
Speaker 3: what what they should be focusing on is making the

449
00:24:38,960 --> 00:24:44,120
Speaker 3: program participants really successful, not necessarily the startups, because that's

450
00:24:44,119 --> 00:24:46,560
Speaker 3: a happy byproduct of making the making the.

451
00:24:48,080 --> 00:24:49,520
Speaker 5: Tech incubators successful.

452
00:24:50,040 --> 00:24:54,159
Speaker 3: And so from our perspective, we made sure that we

453
00:24:54,280 --> 00:24:58,439
Speaker 3: could understand what the drivers to getting more more funds

454
00:24:58,480 --> 00:25:00,840
Speaker 3: up and running so we can keep in bet and

455
00:25:01,320 --> 00:25:03,439
Speaker 3: for us, that means we have to get returns, and

456
00:25:03,440 --> 00:25:04,960
Speaker 3: that's really true of any.

457
00:25:04,840 --> 00:25:05,800
Speaker 5: Venture capital fund.

458
00:25:06,640 --> 00:25:10,080
Speaker 3: If we can't provide investors their money back, they're not

459
00:25:10,119 --> 00:25:13,560
Speaker 3: going to give us more money to invest. So it's

460
00:25:13,600 --> 00:25:15,919
Speaker 3: a slight nuance that I think sometimes gets forgotten. Now,

461
00:25:16,000 --> 00:25:18,520
Speaker 3: we are deeply passionate about building startups, but we also

462
00:25:18,640 --> 00:25:21,960
Speaker 3: we are also deeply passionate about getting our investors' returns.

463
00:25:22,000 --> 00:25:24,040
Speaker 3: And I think we're probably one of the very few

464
00:25:24,600 --> 00:25:27,679
Speaker 3: funds in the country that have returned an entire fund

465
00:25:28,280 --> 00:25:30,440
Speaker 3: of the committed capital to our investors, and so that's

466
00:25:30,520 --> 00:25:31,080
Speaker 3: served us.

467
00:25:31,000 --> 00:25:31,920
Speaker 5: Really well over time.

468
00:25:32,680 --> 00:25:34,680
Speaker 3: You know, we've been going for ten years and we've

469
00:25:34,800 --> 00:25:38,600
Speaker 3: given our investors annual returns every year for the last

470
00:25:38,640 --> 00:25:41,800
Speaker 3: six So that's a pretty good track record in my opinion,

471
00:25:41,840 --> 00:25:46,399
Speaker 3: and that's I think what really helped us continue to

472
00:25:46,400 --> 00:25:50,919
Speaker 3: get re upped by another contract by Callahan Innovation in

473
00:25:51,160 --> 00:25:52,320
Speaker 3: twenty twenty twenty around.

474
00:25:53,160 --> 00:25:56,080
Speaker 1: Yeah, so you had that continuing support from the government,

475
00:25:56,119 --> 00:25:58,520
Speaker 1: that partnership, and we'll post a link to this, but

476
00:25:59,000 --> 00:26:02,280
Speaker 1: you have just published your sort of your track record.

477
00:26:02,760 --> 00:26:07,159
Speaker 1: Fund one has been returning annual annual return of twenty

478
00:26:07,280 --> 00:26:10,240
Speaker 1: percent per year. So all of the initial funding that

479
00:26:10,320 --> 00:26:12,760
Speaker 1: investors put into that has been returned to them, and

480
00:26:12,800 --> 00:26:16,399
Speaker 1: presumably they will profit as those companies were required or

481
00:26:16,440 --> 00:26:19,760
Speaker 1: grow bigger or receive additional capital, which you are, then

482
00:26:19,880 --> 00:26:21,560
Speaker 1: your investors are repaid for.

483
00:26:21,840 --> 00:26:22,920
Speaker 5: Yeah, that's right. Yeah.

484
00:26:23,080 --> 00:26:26,280
Speaker 3: And the nuance around that actually, and I didn't publish

485
00:26:26,280 --> 00:26:29,639
Speaker 3: it in that article I probably should have, but the

486
00:26:29,720 --> 00:26:31,800
Speaker 3: nuance around that is actually a big chunk of that

487
00:26:31,880 --> 00:26:36,879
Speaker 3: funds amount was actually invested to set W and T

488
00:26:37,000 --> 00:26:40,760
Speaker 3: up itself, so there was no formal fee structure and

489
00:26:40,800 --> 00:26:43,359
Speaker 3: so there was actually quite significant costs within that. So

490
00:26:43,359 --> 00:26:45,919
Speaker 3: if you strip that out as well, the returns are

491
00:26:45,920 --> 00:26:50,520
Speaker 3: actually quite significant, significantly hired. I'd say they're up around

492
00:26:50,520 --> 00:26:53,600
Speaker 3: the sort of late twenties if you took that into accounts.

493
00:26:53,640 --> 00:26:58,640
Speaker 3: So and then fun too, we're hitting pretty similar metrics were.

494
00:26:58,359 --> 00:27:01,720
Speaker 1: Sort of twenty five and your return at the moment.

495
00:27:01,720 --> 00:27:03,880
Speaker 3: And that's actually got more to come. I mean, we've

496
00:27:03,880 --> 00:27:06,879
Speaker 3: got some fantastic companies still to still to go on that.

497
00:27:06,920 --> 00:27:10,200
Speaker 3: We've Foundry laborising a significant Series B round at the moment,

498
00:27:10,240 --> 00:27:11,880
Speaker 3: and a couple of others in there which are doing

499
00:27:12,440 --> 00:27:16,480
Speaker 3: really well. So those are still those that's still a

500
00:27:16,480 --> 00:27:17,359
Speaker 3: growing portfolio.

501
00:27:17,640 --> 00:27:20,159
Speaker 1: Yeah, because I think there's a perception around sort of

502
00:27:20,160 --> 00:27:23,640
Speaker 1: deep tech as it has slightly longer horizon to get

503
00:27:23,640 --> 00:27:25,920
Speaker 1: your money back, but it doesn't all necessarily all come

504
00:27:25,960 --> 00:27:28,440
Speaker 1: in one chunk. At the end five or seven years time.

505
00:27:29,240 --> 00:27:33,520
Speaker 1: As more investors come in, they're actually repaying the original

506
00:27:33,520 --> 00:27:36,680
Speaker 1: investors and hopefully giving them more than what they put in.

507
00:27:37,359 --> 00:27:40,240
Speaker 3: Yeah. Yeah, And so the we have a closed fund

508
00:27:40,359 --> 00:27:44,359
Speaker 3: so that when you've got you know, we raise and

509
00:27:44,400 --> 00:27:47,679
Speaker 3: then we don't bring new investors into that specific fund

510
00:27:48,160 --> 00:27:52,040
Speaker 3: each time new investors come into the next fund. But

511
00:27:52,080 --> 00:27:55,320
Speaker 3: the you know, you're right in terms of the deep

512
00:27:55,359 --> 00:27:58,080
Speaker 3: tech sometimes can take quite a long time to get returns,

513
00:27:58,119 --> 00:27:59,960
Speaker 3: you know. I mean, so we were talking at eight

514
00:28:00,119 --> 00:28:02,879
Speaker 3: ten years for some of those some of those companies.

515
00:28:02,880 --> 00:28:06,159
Speaker 3: But we've long held a dual strategy around that of

516
00:28:06,320 --> 00:28:09,159
Speaker 3: we do invest into companies which can give us the

517
00:28:09,200 --> 00:28:12,520
Speaker 3: opportunity of getting some earlier returns, and we do that

518
00:28:12,560 --> 00:28:14,879
Speaker 3: because there's some really good opportunity in New Zealand to

519
00:28:14,920 --> 00:28:18,120
Speaker 3: do so. And we look at this, you know, there's

520
00:28:18,160 --> 00:28:21,320
Speaker 3: this mythical unicorn which is a very challenging thing to.

521
00:28:21,280 --> 00:28:23,520
Speaker 5: Achieve and hence hence the name.

522
00:28:24,720 --> 00:28:27,080
Speaker 3: And we certainly have some of those in our portfolio

523
00:28:27,119 --> 00:28:29,960
Speaker 3: that are unicorns and waiting should we call in progress.

524
00:28:31,160 --> 00:28:34,640
Speaker 3: But also the vast majority of companies are not going

525
00:28:34,640 --> 00:28:36,840
Speaker 3: to hit that out of New Zealand or even in

526
00:28:36,880 --> 00:28:39,960
Speaker 3: the US to be honest, the metrics show and so

527
00:28:40,000 --> 00:28:44,080
Speaker 3: there's the capital efficiency of New Zealand companies combined with

528
00:28:44,240 --> 00:28:49,920
Speaker 3: the ability to build these companies and have garner interest

529
00:28:50,000 --> 00:28:53,560
Speaker 3: from global corporates who are better place to grow them internationally,

530
00:28:54,440 --> 00:28:56,760
Speaker 3: means that we can actually get some earlier returns within

531
00:28:57,440 --> 00:29:00,800
Speaker 3: I mean fund one we return first first to investment

532
00:29:00,840 --> 00:29:03,960
Speaker 3: back in three and a half years, which is particularly early.

533
00:29:04,800 --> 00:29:07,440
Speaker 3: Fun two was about four and a half years for

534
00:29:07,600 --> 00:29:10,520
Speaker 3: the first money back, and that was basically because we

535
00:29:10,600 --> 00:29:13,200
Speaker 3: could invest into these companies and then build them to

536
00:29:13,240 --> 00:29:17,200
Speaker 3: a point where actually a global corporate was really interested

537
00:29:17,240 --> 00:29:19,280
Speaker 3: to pick it up and run it from there. Now

538
00:29:19,640 --> 00:29:22,280
Speaker 3: there's an element of are we giving a company's New

539
00:29:22,400 --> 00:29:23,800
Speaker 3: Zealand companies away too early?

540
00:29:23,880 --> 00:29:26,239
Speaker 5: Well, you know, maybe maybe not.

541
00:29:26,440 --> 00:29:29,080
Speaker 3: But actually what happens with that money is that comes

542
00:29:29,360 --> 00:29:32,160
Speaker 3: all of that money that we've got from doing that

543
00:29:32,240 --> 00:29:34,880
Speaker 3: has come straight back into either our funds or our

544
00:29:34,920 --> 00:29:39,640
Speaker 3: companies directly, so it's all been reinvested, and you know

545
00:29:39,680 --> 00:29:42,280
Speaker 3: that's got to be good for the New Zealand economy

546
00:29:42,320 --> 00:29:45,160
Speaker 3: to be able to keep reinvesting money from those returns.

547
00:29:45,400 --> 00:29:48,640
Speaker 1: Looking at some of the stats Callahana's put out at

548
00:29:48,640 --> 00:29:53,040
Speaker 1: this ten year MIC, so they've supported around eighty deep

549
00:29:53,040 --> 00:29:55,880
Speaker 1: text startups, which is about half of what they would

550
00:29:55,920 --> 00:29:57,920
Speaker 1: count as the one hundred and sixty odd deep tech

551
00:29:57,960 --> 00:30:01,120
Speaker 1: startups that have emerged in New Zealand in the last decade.

552
00:30:02,200 --> 00:30:06,320
Speaker 1: Around eighty million in sort of private funding has gone

553
00:30:06,320 --> 00:30:08,920
Speaker 1: into those startups. They've got a figure of three hundred

554
00:30:09,000 --> 00:30:12,200
Speaker 1: million of follow up funding that has been attracted. I

555
00:30:12,200 --> 00:30:14,120
Speaker 1: think you have a figure for two hundred million for

556
00:30:14,160 --> 00:30:15,720
Speaker 1: your companies alone.

557
00:30:16,080 --> 00:30:19,360
Speaker 3: That might be a bit undercooked from Calahund's perspective, because

558
00:30:19,360 --> 00:30:23,280
Speaker 3: I don't think it's all us, but yeah.

559
00:30:22,280 --> 00:30:24,800
Speaker 1: So that's two hundred million and follow follow up funding

560
00:30:24,800 --> 00:30:28,640
Speaker 1: that your company's over those three funds have raised, which

561
00:30:28,680 --> 00:30:31,320
Speaker 1: is pretty impressive. And what I found sort of I

562
00:30:31,320 --> 00:30:34,280
Speaker 1: was surprised that was nearly half of those companies that

563
00:30:34,280 --> 00:30:38,920
Speaker 1: have gone through the Deep Tech Incubator program I spinouts

564
00:30:38,920 --> 00:30:44,800
Speaker 1: from public institutions, So presumably cris Universities. I guess as well,

565
00:30:44,840 --> 00:30:47,800
Speaker 1: there is a bit of a perception in New Zealand

566
00:30:47,800 --> 00:30:51,320
Speaker 1: that we haven't got that pipeline right, that we our

567
00:30:51,440 --> 00:30:57,120
Speaker 1: science commercialization is under delivering. But clearly there's there's a

568
00:30:57,160 --> 00:31:00,360
Speaker 1: lot of great companies that are bubbling up out of

569
00:31:00,360 --> 00:31:01,680
Speaker 1: the university and the crisis.

570
00:31:01,800 --> 00:31:04,360
Speaker 5: Yeah, you're absolutely right. I mean, I think it's the

571
00:31:04,360 --> 00:31:05,800
Speaker 5: best that I've ever seen it.

572
00:31:05,960 --> 00:31:09,640
Speaker 3: I mean, you know, back to twenty fourteen, there wasn't

573
00:31:09,680 --> 00:31:11,560
Speaker 3: a heck of a lot happening at the time. I

574
00:31:11,560 --> 00:31:14,560
Speaker 3: mean there was, don't get me wrong, but not as

575
00:31:14,640 --> 00:31:17,280
Speaker 3: much as we're seeing now. And I think we've seen

576
00:31:17,320 --> 00:31:21,240
Speaker 3: a huge advancement in the maturity of the industry in

577
00:31:21,280 --> 00:31:25,239
Speaker 3: all its forms since then. You know, the likes of

578
00:31:25,720 --> 00:31:28,280
Speaker 3: you Will Charles and his team at Union Services have

579
00:31:28,360 --> 00:31:32,080
Speaker 3: done a fantastic job to take technology out of what

580
00:31:32,240 --> 00:31:35,200
Speaker 3: is basically the largest portfolio by PEO portfolio in the

581
00:31:35,200 --> 00:31:40,040
Speaker 3: country and get a lot of professionalism into the industry

582
00:31:40,080 --> 00:31:43,160
Speaker 3: and start spinning it out. And you're seeing others emulate

583
00:31:43,200 --> 00:31:46,800
Speaker 3: that to a certain degree. I think, you know, we've

584
00:31:46,800 --> 00:31:48,720
Speaker 3: probably still got a bit of a scale issue there,

585
00:31:49,560 --> 00:31:52,320
Speaker 3: which is not unusual for New Zealand, but you know,

586
00:31:52,360 --> 00:31:55,680
Speaker 3: there's some great stuff happening, and I think the challenge

587
00:31:55,680 --> 00:31:57,960
Speaker 3: for us going forward is really just how do we

588
00:31:58,000 --> 00:32:02,680
Speaker 3: increase that pipeline of great sciences right, and that's got

589
00:32:02,720 --> 00:32:08,000
Speaker 3: to come from things like rewarding commercialization based on scientific research.

590
00:32:08,040 --> 00:32:11,600
Speaker 3: We want to see our scientists do really well. Simple

591
00:32:11,680 --> 00:32:17,440
Speaker 3: investment into more investment in science is going to result

592
00:32:17,440 --> 00:32:21,640
Speaker 3: in the commercialization of more opportunities. It's a fairly simple fact.

593
00:32:22,800 --> 00:32:25,240
Speaker 3: And what I mean, I'd like to also see sort

594
00:32:25,240 --> 00:32:28,320
Speaker 3: of more corporate engagement in the sector as well, some

595
00:32:28,360 --> 00:32:32,440
Speaker 3: of our New Zealand companies helping to support these startups

596
00:32:32,440 --> 00:32:35,520
Speaker 3: and these scientific projects and taking a bit more risk

597
00:32:35,560 --> 00:32:38,160
Speaker 3: capital on board as well. I think that our corporate

598
00:32:38,200 --> 00:32:40,880
Speaker 3: set probably doesn't do all that well, with the exception

599
00:32:40,920 --> 00:32:43,800
Speaker 3: of a few likes of Gallagher and a couple of

600
00:32:43,840 --> 00:32:44,720
Speaker 3: others of that nature.

601
00:32:44,760 --> 00:32:48,480
Speaker 1: But I guess one of the perceptions of the early

602
00:32:48,480 --> 00:32:52,840
Speaker 1: stage company funding environment is it's for too long, it's

603
00:32:52,840 --> 00:32:55,720
Speaker 1: been too capital constrained. But you know, when I look

604
00:32:55,760 --> 00:33:01,360
Speaker 1: around at yourselves and outset ventures and house and it

605
00:33:01,480 --> 00:33:03,160
Speaker 1: seems there seems to be a lot of money that

606
00:33:03,200 --> 00:33:06,560
Speaker 1: you know, they're all closing funds and raising a lot

607
00:33:06,560 --> 00:33:09,760
Speaker 1: of money to invest in early stage companies. Is that

608
00:33:09,800 --> 00:33:12,440
Speaker 1: sort of a myth now or is it still? I mean,

609
00:33:12,480 --> 00:33:14,960
Speaker 1: you're raising your fund for at the moment, how are

610
00:33:15,000 --> 00:33:18,800
Speaker 1: you finding actually is there the appetite there? And I

611
00:33:18,800 --> 00:33:20,600
Speaker 1: guess part of that is down to your track record.

612
00:33:20,600 --> 00:33:24,320
Speaker 1: You've done three successful funds, You're going to attract more

613
00:33:24,360 --> 00:33:25,960
Speaker 1: money even in a constrained environment.

614
00:33:26,040 --> 00:33:26,560
Speaker 5: Absolutely.

615
00:33:26,600 --> 00:33:28,840
Speaker 3: I mean it does get a bit different when you're

616
00:33:28,880 --> 00:33:31,880
Speaker 3: at fun For because you can point to actual successful

617
00:33:31,920 --> 00:33:35,160
Speaker 3: track record and say that we've got these returns. So look,

618
00:33:35,200 --> 00:33:37,080
Speaker 3: I won't say it's easy. It's it's always a hard

619
00:33:37,080 --> 00:33:40,880
Speaker 3: thing to raise a fund, but you know, we're we're

620
00:33:40,880 --> 00:33:45,920
Speaker 3: attracting capital, and you know, we're about where we're transitioning from.

621
00:33:46,000 --> 00:33:48,160
Speaker 3: We're about to do our last investment in fun three

622
00:33:48,200 --> 00:33:51,400
Speaker 3: and then we'll transition to investing in fun for in

623
00:33:51,440 --> 00:33:56,400
Speaker 3: the very near future. So yeah, as to capital in

624
00:33:56,440 --> 00:33:59,400
Speaker 3: the industry, I mean, you know, obviously there's more more

625
00:33:59,440 --> 00:34:03,080
Speaker 3: capital than there ever has been before, and and that's really.

626
00:34:02,800 --> 00:34:03,640
Speaker 5: Great to see.

627
00:34:04,640 --> 00:34:08,080
Speaker 3: There's pools of capital in different parts as well, and

628
00:34:08,120 --> 00:34:11,000
Speaker 3: I think that's what we need to see growing I'm

629
00:34:11,040 --> 00:34:15,360
Speaker 3: always a supporter of creating deeper capital pools in a

630
00:34:15,440 --> 00:34:20,280
Speaker 3: market because it gives better opportunity for startups to grow

631
00:34:21,680 --> 00:34:26,680
Speaker 3: in a variety of ways. Different partners suit different companies

632
00:34:26,760 --> 00:34:28,200
Speaker 3: and different founders and that.

633
00:34:28,160 --> 00:34:28,760
Speaker 5: Sort of stuff.

634
00:34:28,800 --> 00:34:32,280
Speaker 3: So I'm really encouraged about what's happening in New Zealand.

635
00:34:32,320 --> 00:34:36,040
Speaker 3: I think I'd like to see more continued support from

636
00:34:36,040 --> 00:34:38,759
Speaker 3: the government. The government coffers are not particularly deep at

637
00:34:38,800 --> 00:34:43,040
Speaker 3: the moment, unfortunately, but I still think New Zealand growth

638
00:34:43,040 --> 00:34:47,000
Speaker 3: capital partners needs to be reinvested into. We can't solely

639
00:34:47,080 --> 00:34:52,480
Speaker 3: rely on international capital coming into New Zealand to fund startups.

640
00:34:53,640 --> 00:34:53,839
Speaker 5: Well.

641
00:34:53,880 --> 00:34:55,640
Speaker 3: I think we saw that back in the early days

642
00:34:55,680 --> 00:35:00,920
Speaker 3: of n ZVIV where Peter Tail's Valavn came in and

643
00:35:01,520 --> 00:35:04,040
Speaker 3: you know, quite frankly Cherry picked two or three companies

644
00:35:04,040 --> 00:35:07,480
Speaker 3: and then disappeared and really didn't come back again until

645
00:35:07,520 --> 00:35:10,200
Speaker 3: it's sort of later iteration of Founders Fund, which is

646
00:35:10,239 --> 00:35:14,640
Speaker 3: brilliant and invested into a number of companies. But I

647
00:35:14,680 --> 00:35:18,400
Speaker 3: think we need to have a very strong venture capital

648
00:35:18,400 --> 00:35:20,640
Speaker 3: industry in New Zealand, and that means we have to

649
00:35:20,680 --> 00:35:24,400
Speaker 3: have a variety of players with deeper pools of capital

650
00:35:24,520 --> 00:35:29,680
Speaker 3: for that a right size for the market. So, and

651
00:35:29,719 --> 00:35:34,640
Speaker 3: I say right size quite deliberately because I think, you know,

652
00:35:34,680 --> 00:35:36,799
Speaker 3: with the early stage nature of what we do at

653
00:35:36,840 --> 00:35:40,400
Speaker 3: that seed stage investing space, it doesn't make sense they

654
00:35:40,400 --> 00:35:42,440
Speaker 3: have a half a billion dollar fund right because it's

655
00:35:42,520 --> 00:35:45,319
Speaker 3: just simply not that many opportunities or they, you know,

656
00:35:45,400 --> 00:35:48,440
Speaker 3: that much capital that we could deploy. So I think

657
00:35:48,440 --> 00:35:50,400
Speaker 3: it has to be right sized. You have to be

658
00:35:50,440 --> 00:35:53,600
Speaker 3: able to deploy the capital and still get adequate returns

659
00:35:53,600 --> 00:35:56,960
Speaker 3: for investors or stellar returns for investors if we can.

660
00:35:57,960 --> 00:36:01,399
Speaker 3: So getting that balance right is But we're not over

661
00:36:01,440 --> 00:36:02,760
Speaker 3: capitalized by any stretch.

662
00:36:02,880 --> 00:36:05,960
Speaker 1: Nothing from the government about topping up unfortunately, you know,

663
00:36:06,040 --> 00:36:09,960
Speaker 1: the government investment and the elevate funder. I guess that's

664
00:36:09,960 --> 00:36:11,440
Speaker 1: a sign of the times. But the other thing that

665
00:36:11,480 --> 00:36:14,560
Speaker 1: you will be particularly interested in is this reorganization off

666
00:36:14,600 --> 00:36:18,000
Speaker 1: the research sector that Sir Peter Gluckman is looking at.

667
00:36:18,120 --> 00:36:20,239
Speaker 1: By the end of this month, potentially early next month,

668
00:36:20,280 --> 00:36:24,920
Speaker 1: we should get some publication out showing what they're thinking

669
00:36:25,000 --> 00:36:27,879
Speaker 1: is on that. I know you were consulted as part

670
00:36:27,880 --> 00:36:30,320
Speaker 1: of this process. What was your advice to this Science

671
00:36:30,320 --> 00:36:34,080
Speaker 1: System Advisory Group from the perspective of investing in these

672
00:36:34,080 --> 00:36:36,040
Speaker 1: companies and having more of a pipeline off them.

673
00:36:36,320 --> 00:36:39,560
Speaker 3: Retention of talent has always been an issue for New Zealand,

674
00:36:40,160 --> 00:36:43,919
Speaker 3: as has scaling global opportunities. But retention of talent goes

675
00:36:44,719 --> 00:36:47,120
Speaker 3: you know, comes in many forms. It comes in the

676
00:36:47,160 --> 00:36:50,400
Speaker 3: form of people that are working in startups, but also

677
00:36:50,440 --> 00:36:52,800
Speaker 3: the people that are working in our science sectors as well.

678
00:36:53,320 --> 00:36:58,600
Speaker 3: It's absolutely critical that we can retain fantastic scientists and

679
00:36:58,920 --> 00:37:01,439
Speaker 3: not have them head off shore because there's no opportunities here.

680
00:37:02,320 --> 00:37:04,719
Speaker 3: Once we start losing them off shore, you know, that's

681
00:37:04,719 --> 00:37:08,000
Speaker 3: a bit of a snowball effect. And you know, there's

682
00:37:08,040 --> 00:37:11,319
Speaker 3: some fantastic scientists and you know, we don't want all

683
00:37:11,360 --> 00:37:13,480
Speaker 3: of them spinning out into the companies because we want

684
00:37:13,480 --> 00:37:16,520
Speaker 3: some of them staying in the academia and being attractive

685
00:37:16,520 --> 00:37:20,960
Speaker 3: beacon for other you know, post grads and masters and

686
00:37:21,040 --> 00:37:27,280
Speaker 3: postdocs and the like to stay around them and create brilliant,

687
00:37:27,400 --> 00:37:36,200
Speaker 3: commercializable scientific opportunities. Also, you know, upscaling those academics to

688
00:37:36,200 --> 00:37:41,359
Speaker 3: to understand the commercial aspects. One of the challenges we've

689
00:37:41,400 --> 00:37:44,840
Speaker 3: always had from from day one is around getting that

690
00:37:44,920 --> 00:37:48,200
Speaker 3: balance right within a startup of the focus on the

691
00:37:48,280 --> 00:37:51,080
Speaker 3: technical and the focus on the commercial aspects of a

692
00:37:51,120 --> 00:37:54,280
Speaker 3: business as well. And if you come from a purely

693
00:37:54,360 --> 00:37:57,560
Speaker 3: academic background, there's a bit of a challenge to do that.

694
00:37:57,760 --> 00:37:59,719
Speaker 3: So the only way you can kind of do that

695
00:37:59,840 --> 00:38:04,520
Speaker 3: is is through education and experience. So that's what we're

696
00:38:04,640 --> 00:38:06,799
Speaker 3: big part of what we've been focused on to how

697
00:38:06,800 --> 00:38:09,120
Speaker 3: do we sort of help academics of that transition. So

698
00:38:09,800 --> 00:38:11,600
Speaker 3: the more of that can happen the industry, I think,

699
00:38:11,640 --> 00:38:13,200
Speaker 3: the better that will be overall.

700
00:38:13,320 --> 00:38:16,480
Speaker 1: What are some of the successes you've been most proud of,

701
00:38:16,560 --> 00:38:18,719
Speaker 1: the ones that really sort of define, you think, the

702
00:38:18,800 --> 00:38:21,600
Speaker 1: sort of the story that WNT is able to tell

703
00:38:21,640 --> 00:38:24,000
Speaker 1: and the value it's able to deliver to these startups.

704
00:38:24,080 --> 00:38:26,080
Speaker 3: I mean a sort of probably sounding like a bit

705
00:38:26,080 --> 00:38:29,359
Speaker 3: of a broken record with Foundry Lab, which you know

706
00:38:29,719 --> 00:38:33,000
Speaker 3: we invested in twenty eighteen, and so this is a

707
00:38:33,040 --> 00:38:39,920
Speaker 3: company that wanted as a die die cast metal company.

708
00:38:40,000 --> 00:38:43,040
Speaker 3: So essentially it melts metal and microwaves for production quality

709
00:38:43,080 --> 00:38:47,480
Speaker 3: parts for things like automotive industry, but for many many things.

710
00:38:48,560 --> 00:38:51,200
Speaker 3: And it was a really interesting one that one because

711
00:38:51,200 --> 00:38:53,560
Speaker 3: we found I think we were talking to David and

712
00:38:53,960 --> 00:38:55,680
Speaker 3: I don't know if he's actually said this publicly, but

713
00:38:56,080 --> 00:38:57,880
Speaker 3: I think he was talking to us about a portable

714
00:38:57,880 --> 00:38:59,360
Speaker 3: fry pain that he was working on or.

715
00:38:59,320 --> 00:38:59,839
Speaker 5: Something like that.

716
00:38:59,880 --> 00:39:03,080
Speaker 3: But when we looked at this other stuff that he

717
00:39:03,160 --> 00:39:05,400
Speaker 3: was working on, it it was pretty unique and we

718
00:39:05,400 --> 00:39:08,320
Speaker 3: could see such a big opportunity in it. So that

719
00:39:09,120 --> 00:39:12,399
Speaker 3: in itself has been an amazing journey because we as

720
00:39:12,600 --> 00:39:14,719
Speaker 3: W and T have been very hands on with that,

721
00:39:14,920 --> 00:39:18,800
Speaker 3: particularly in those early years, and David and I still

722
00:39:18,840 --> 00:39:22,719
Speaker 3: talk pretty regularly. But that's been a fantastic opportunity for

723
00:39:22,840 --> 00:39:26,400
Speaker 3: us because it really highlighted the skill sets and the

724
00:39:26,400 --> 00:39:27,759
Speaker 3: networks that we have around us.

725
00:39:27,880 --> 00:39:30,640
Speaker 1: You know that one's incredible because you know it was.

726
00:39:30,680 --> 00:39:32,880
Speaker 1: I think it was one of your former colleagues at

727
00:39:33,000 --> 00:39:35,480
Speaker 1: WNT who was just having to be down in Willington

728
00:39:35,560 --> 00:39:37,640
Speaker 1: caught up with David and he had the sort of

729
00:39:37,640 --> 00:39:40,919
Speaker 1: backyard project he was working on, and she came away

730
00:39:40,920 --> 00:39:44,000
Speaker 1: from that thinking, hang on, there's a whole other product

731
00:39:44,040 --> 00:39:46,919
Speaker 1: set here that you could be developing. And that really

732
00:39:46,960 --> 00:39:50,359
Speaker 1: was the inciting incident to create Foundry Lab and build

733
00:39:50,400 --> 00:39:51,399
Speaker 1: it into the success it.

734
00:39:51,400 --> 00:39:54,280
Speaker 3: Is absolutely and look, it keeps getting bigger and bigger.

735
00:39:54,680 --> 00:39:57,759
Speaker 3: Almost every time I talked to David, there's another opportunity

736
00:39:57,760 --> 00:40:00,600
Speaker 3: that's coming out of it. That is, you know, capital

737
00:40:00,640 --> 00:40:03,279
Speaker 3: to do and to build, and so you know they're

738
00:40:03,320 --> 00:40:05,440
Speaker 3: out raising their Series B around it a moment, which

739
00:40:05,480 --> 00:40:07,759
Speaker 3: is quite a significant number, and I think there's there's

740
00:40:07,800 --> 00:40:10,880
Speaker 3: a much bigger opportunity yet to be unpacked in that one.

741
00:40:11,000 --> 00:40:13,759
Speaker 1: I mean, it is high risk by no means do

742
00:40:13,920 --> 00:40:18,000
Speaker 1: all of these companies have a successful sort of exit

743
00:40:18,560 --> 00:40:22,840
Speaker 1: or go on to be acquired. I think Klhound's stat

744
00:40:22,880 --> 00:40:26,080
Speaker 1: is seventy two percent if those companies they've had through

745
00:40:26,120 --> 00:40:30,840
Speaker 1: the incubator program are still around, which I was surprised

746
00:40:30,840 --> 00:40:33,359
Speaker 1: that because this is a sort of a high risk

747
00:40:33,440 --> 00:40:37,160
Speaker 1: area of investment technically very challenging. Does that gel with

748
00:40:37,480 --> 00:40:39,040
Speaker 1: your sort of success rate so far?

749
00:40:39,239 --> 00:40:41,600
Speaker 3: Yeah, look, I think so. I don't know the stats.

750
00:40:41,760 --> 00:40:43,480
Speaker 3: I know our stats. I don't know where the other

751
00:40:44,000 --> 00:40:46,120
Speaker 3: where the other ones are. To be honest, I think

752
00:40:46,120 --> 00:40:50,600
Speaker 3: it's it takes a lot longer sometimes to admit defeat

753
00:40:50,920 --> 00:40:53,880
Speaker 3: in a company as well, and rightly so, it's a

754
00:40:53,920 --> 00:40:57,120
Speaker 3: really hard thing to get right when you don't want

755
00:40:57,160 --> 00:40:59,239
Speaker 3: to pull the pin to early because you think, look

756
00:40:59,320 --> 00:41:02,160
Speaker 3: there's some growthpportunity. Are we walking away too early here.

757
00:41:02,200 --> 00:41:06,759
Speaker 3: But you've also got to read the signals and as

758
00:41:06,800 --> 00:41:10,320
Speaker 3: an investor and you're dealing with people, you're dealing with humans.

759
00:41:10,360 --> 00:41:13,239
Speaker 3: On the other side, it's not just about capital and

760
00:41:13,280 --> 00:41:16,440
Speaker 3: money here. There's humans evolved and that's a really hard

761
00:41:16,480 --> 00:41:18,239
Speaker 3: thing to sit down with someone and say, you know what,

762
00:41:18,320 --> 00:41:21,320
Speaker 3: this isn't working for all of these reasons. So whether

763
00:41:21,400 --> 00:41:25,640
Speaker 3: that's sometimes the cause of that statistic being higher than

764
00:41:25,760 --> 00:41:29,319
Speaker 3: everyone expected, I don't know. I haven't delved into the

765
00:41:29,360 --> 00:41:32,040
Speaker 3: stats about who's still around. You get a lot of

766
00:41:32,120 --> 00:41:35,360
Speaker 3: hype around companies that have raised a bigground, which is

767
00:41:35,400 --> 00:41:38,319
Speaker 3: great and so they should celebrate that. You get a

768
00:41:38,320 --> 00:41:41,800
Speaker 3: lot of hype around particular investors coming into around saying

769
00:41:41,800 --> 00:41:44,239
Speaker 3: that okay, you've got that investor, you must be successful.

770
00:41:44,640 --> 00:41:48,279
Speaker 3: And then you get some hype around revenue traction and

771
00:41:49,320 --> 00:41:51,960
Speaker 3: hype around acquisition or IPO or something like that as well.

772
00:41:52,000 --> 00:41:53,760
Speaker 3: Now only one and a half of those are actual

773
00:41:53,800 --> 00:41:55,959
Speaker 3: hype that should be listened to, and that's the revenue traction.

774
00:41:56,040 --> 00:41:59,000
Speaker 3: Depending on the type of revenue attraction and how repeatable

775
00:41:59,080 --> 00:42:02,400
Speaker 3: is it an outcome either either listing or an IPO.

776
00:42:03,360 --> 00:42:05,879
Speaker 3: The others are I think you still have to take

777
00:42:05,920 --> 00:42:08,520
Speaker 3: them for what they are. They are investment, and actually

778
00:42:08,600 --> 00:42:11,200
Speaker 3: once you get investment, that's when the real hard work starts.

779
00:42:11,640 --> 00:42:12,640
Speaker 5: That's not when it ends.

780
00:42:12,640 --> 00:42:15,239
Speaker 3: So I think we kind of confuse capital raising with

781
00:42:15,360 --> 00:42:16,480
Speaker 3: success sometimes.

782
00:42:16,520 --> 00:42:20,040
Speaker 1: PwC and its last report about the startup ecosystem, said

783
00:42:20,080 --> 00:42:24,920
Speaker 1: that deep tech was the biggest area attracting funding in

784
00:42:25,000 --> 00:42:28,520
Speaker 1: New Zealand at the moment, So there is huge appetite here.

785
00:42:28,600 --> 00:42:33,439
Speaker 1: What's your sort of outlook for the next decade off WNT,

786
00:42:34,000 --> 00:42:35,920
Speaker 1: Where do you want to go and how do you

787
00:42:35,920 --> 00:42:39,040
Speaker 1: see the sector developing. A lot of your recent investments

788
00:42:39,040 --> 00:42:41,640
Speaker 1: in FUN three are very much in the climate tech space.

789
00:42:42,440 --> 00:42:45,279
Speaker 1: Interesting in your thoughts on can that become a real

790
00:42:45,360 --> 00:42:47,560
Speaker 1: category that we become known for internationally?

791
00:42:47,640 --> 00:42:50,200
Speaker 3: Yeah, I think it can. I think it can. You know,

792
00:42:50,239 --> 00:42:53,640
Speaker 3: I think there's a lot of opportunity there. I think

793
00:42:54,120 --> 00:42:57,399
Speaker 3: it's The opportunity in New Zealand for deep tech is.

794
00:42:57,360 --> 00:42:59,040
Speaker 5: Really you know, it's a bit.

795
00:42:59,120 --> 00:43:02,800
Speaker 3: It's captured a global trend, right There's been a massive

796
00:43:02,800 --> 00:43:08,680
Speaker 3: global trend towards climate investing, sustainability and impact investing, and

797
00:43:09,040 --> 00:43:11,680
Speaker 3: really for the most part, deep tech is synonymous with

798
00:43:11,760 --> 00:43:14,480
Speaker 3: those things. It's probably just a simple way of saying it.

799
00:43:15,600 --> 00:43:18,960
Speaker 3: You know, we've got investors of ours that have come

800
00:43:19,000 --> 00:43:22,359
Speaker 3: in because we hit all the impact requirements that they

801
00:43:22,480 --> 00:43:27,840
Speaker 3: need from a sustainability standpoint without necessarily being an impact fund,

802
00:43:28,680 --> 00:43:32,200
Speaker 3: dedicated impact fund. So we've got investors coming in committing

803
00:43:32,239 --> 00:43:36,600
Speaker 3: to that strategy. So look, I think the outlook is great.

804
00:43:36,680 --> 00:43:38,799
Speaker 3: I think there's a there's a lot of commitment from

805
00:43:39,000 --> 00:43:43,480
Speaker 3: New Zealand government into deep tech, there's a lot of

806
00:43:43,480 --> 00:43:47,160
Speaker 3: commitment from New Zealand investors. There's plenty of opportunities coming

807
00:43:47,200 --> 00:43:50,640
Speaker 3: out in the market which which had all those those spaces.

808
00:43:50,880 --> 00:43:54,960
Speaker 3: I'll add into their med tech as well. You know,

809
00:43:55,760 --> 00:43:58,600
Speaker 3: I think there's there's a big opportunity in that too,

810
00:43:58,640 --> 00:44:02,400
Speaker 3: and that's you know, synonymous with impact and things like

811
00:44:02,480 --> 00:44:05,680
Speaker 3: that as well. So look, I'm really optimistic about the

812
00:44:05,840 --> 00:44:08,200
Speaker 3: opportunity set for New Zealand in the space over the

813
00:44:08,200 --> 00:44:10,200
Speaker 3: next ten years. I just I think it's going from

814
00:44:10,239 --> 00:44:14,160
Speaker 3: strength to strength. And you know, as usual, New Zealand's

815
00:44:14,160 --> 00:44:17,279
Speaker 3: punching above its weight. And I'm really proud of the

816
00:44:17,320 --> 00:44:19,680
Speaker 3: founders that are out there doing their thing and what

817
00:44:19,719 --> 00:44:23,520
Speaker 3: they're building. And you know, long long may the last

818
00:44:24,000 --> 00:44:25,560
Speaker 3: and wish around all success on that.

819
00:44:25,680 --> 00:44:29,840
Speaker 1: Well, congratulations on ten years of WNT ventures and you

820
00:44:29,840 --> 00:44:32,919
Speaker 1: know dozens of companies that you've supported. Good luck for

821
00:44:33,440 --> 00:44:37,040
Speaker 1: raising fun for and thanks so much for coming on

822
00:44:37,080 --> 00:44:37,839
Speaker 1: the business of tech.

823
00:44:37,920 --> 00:44:40,120
Speaker 5: Thank you, Peter. I really appreciate you having one.

824
00:44:46,840 --> 00:44:50,279
Speaker 2: So there's a guy who knows the industry really, really well,

825
00:44:50,280 --> 00:44:53,479
Speaker 2: as a huge amount of experience and a long time

826
00:44:53,480 --> 00:44:56,360
Speaker 2: that he's spent in the world of deep tech venture

827
00:44:57,160 --> 00:45:00,200
Speaker 2: and listening to him talk, they were kind of a

828
00:45:00,200 --> 00:45:04,160
Speaker 2: few things that stood out to me that was surprising,

829
00:45:04,320 --> 00:45:08,680
Speaker 2: and one of them was just the amount of returns

830
00:45:08,680 --> 00:45:11,040
Speaker 2: that he's managed to make in a short amount of time,

831
00:45:11,360 --> 00:45:13,279
Speaker 2: because you really do think about deep tach as this

832
00:45:13,520 --> 00:45:17,080
Speaker 2: long term investment, ten year returns. And he said Fund

833
00:45:17,120 --> 00:45:18,960
Speaker 2: one delivered in three and a half and Fund two

834
00:45:18,960 --> 00:45:21,480
Speaker 2: and four and a half years. That sounded like it

835
00:45:21,520 --> 00:45:25,080
Speaker 2: was an intentional strategy at WNT to split over some

836
00:45:25,160 --> 00:45:27,239
Speaker 2: of the stuff that was the more immediate return with

837
00:45:27,360 --> 00:45:29,600
Speaker 2: the longer return to make sure that the fund could

838
00:45:29,719 --> 00:45:31,720
Speaker 2: keep rolling along, which I thought was quite clever.

839
00:45:32,280 --> 00:45:35,000
Speaker 1: Yeah, I guess the question is so that they returned

840
00:45:35,600 --> 00:45:38,040
Speaker 1: to investors the money that they'd put in, Yes, but

841
00:45:38,120 --> 00:45:41,759
Speaker 1: what was the expectation on the part of investors about

842
00:45:41,760 --> 00:45:43,799
Speaker 1: how much they wanted to get back, because this is

843
00:45:43,800 --> 00:45:45,520
Speaker 1: the sort of investment where you put in a dollar

844
00:45:45,600 --> 00:45:48,640
Speaker 1: you want to get ten ten back. So I wonder

845
00:45:48,719 --> 00:45:55,160
Speaker 1: how that equation has settled. But you got to take

846
00:45:55,200 --> 00:45:57,279
Speaker 1: your hat off to them. I mean to have to

847
00:45:57,360 --> 00:46:01,120
Speaker 1: be returning that much capital year on year at least

848
00:46:01,120 --> 00:46:04,680
Speaker 1: twenty percent, rising to twenty five percent or more. This

849
00:46:04,880 --> 00:46:09,319
Speaker 1: is something that has huge momentum now, and you know,

850
00:46:09,360 --> 00:46:12,840
Speaker 1: we are seeing that. I don't know if WNT is

851
00:46:12,880 --> 00:46:16,120
Speaker 1: the biggest buy investment capital, if it's the most successful.

852
00:46:16,239 --> 00:46:19,840
Speaker 1: Tried to tell they all tell their stories in different ways.

853
00:46:19,880 --> 00:46:23,640
Speaker 1: But look, we've got Outset Ventures have that incredible facility,

854
00:46:23,680 --> 00:46:26,520
Speaker 1: and you know in paran l have a great roster

855
00:46:26,600 --> 00:46:29,919
Speaker 1: of companies there. You've got traditional players like Movac, You've

856
00:46:29,920 --> 00:46:32,040
Speaker 1: got ice House Ventures who do a fair bit of

857
00:46:32,080 --> 00:46:33,920
Speaker 1: deep tech as well. It sort of feels like we

858
00:46:33,960 --> 00:46:37,200
Speaker 1: do have this critical mass now. And I was really

859
00:46:37,280 --> 00:46:40,680
Speaker 1: interested in the you know, asking them about the state

860
00:46:40,719 --> 00:46:44,520
Speaker 1: of things when it comes to capital. You know, the

861
00:46:44,600 --> 00:46:46,839
Speaker 1: sense I get we see all these releases coming through

862
00:46:46,840 --> 00:46:50,359
Speaker 1: that you and I get announcing, you know, a new

863
00:46:50,440 --> 00:46:53,800
Speaker 1: fund more money going in, and the numbers seem to

864
00:46:53,800 --> 00:46:55,760
Speaker 1: get bigger. You know, we're talking about ten million dollars

865
00:46:55,880 --> 00:47:00,560
Speaker 1: seed raises in New Zealand these days, which is quite impressive.

866
00:47:01,000 --> 00:47:03,960
Speaker 1: So it seems to be more and more money, but

867
00:47:04,000 --> 00:47:07,040
Speaker 1: the reality is the scale of what we're doing here

868
00:47:07,160 --> 00:47:09,239
Speaker 1: is very small, and if we do really want to

869
00:47:09,320 --> 00:47:11,200
Speaker 1: ramp things up, the more money you have, the faster

870
00:47:11,280 --> 00:47:12,920
Speaker 1: you can move, the more money you can give to

871
00:47:12,960 --> 00:47:17,680
Speaker 1: a founder to recruit that world class team and get

872
00:47:17,719 --> 00:47:21,840
Speaker 1: going quickly, which in a competitive space like the rocket

873
00:47:21,840 --> 00:47:24,759
Speaker 1: industry that Sir Peter Becker is operating in, there are

874
00:47:24,800 --> 00:47:28,160
Speaker 1: lots of players who want to be playing in that

875
00:47:28,200 --> 00:47:30,799
Speaker 1: space as well. The quicker you can get there, the

876
00:47:30,880 --> 00:47:33,840
Speaker 1: more likely you are going to succeed and own a

877
00:47:33,840 --> 00:47:36,400
Speaker 1: part of the market. So I guess while there is

878
00:47:36,440 --> 00:47:39,680
Speaker 1: more money going into it, we need more to really

879
00:47:39,960 --> 00:47:41,160
Speaker 1: accelerate what we're doing.

880
00:47:41,800 --> 00:47:46,040
Speaker 2: Yeah, I think that's true in many ways, and was

881
00:47:46,080 --> 00:47:48,000
Speaker 2: the message as well when he talked a bit later

882
00:47:48,120 --> 00:47:51,600
Speaker 2: about the need for more funding of science research as well,

883
00:47:51,680 --> 00:47:55,880
Speaker 2: So not just more funding of startups, but more funding

884
00:47:55,920 --> 00:47:59,759
Speaker 2: of the research and more funding of the commercialization of

885
00:47:59,840 --> 00:48:03,200
Speaker 2: that research. And it's just a truism of a small

886
00:48:03,200 --> 00:48:05,440
Speaker 2: country that we need more money. We're always going to

887
00:48:05,480 --> 00:48:09,279
Speaker 2: need more money, and balancing a New Zealand investment with

888
00:48:09,360 --> 00:48:12,920
Speaker 2: international investment, and that's really been I think a strong

889
00:48:13,040 --> 00:48:15,680
Speaker 2: theme of twenty twenty four for US and for the

890
00:48:15,719 --> 00:48:19,000
Speaker 2: venture capital and startup world is that we need to

891
00:48:19,160 --> 00:48:23,600
Speaker 2: start breaking out of New Zealand more and making New

892
00:48:23,680 --> 00:48:29,080
Speaker 2: Zealand a place where it is easy for overseas investors

893
00:48:29,160 --> 00:48:32,120
Speaker 2: to put money into startups. And part of that is

894
00:48:32,640 --> 00:48:36,759
Speaker 2: the reference that he made to global experience coming back

895
00:48:36,800 --> 00:48:40,280
Speaker 2: into New Zealand right at the beginning of the interview,

896
00:48:40,400 --> 00:48:43,759
Speaker 2: like it's just another example of the need for mentorship,

897
00:48:43,760 --> 00:48:47,240
Speaker 2: which was the theme of a discussion with Mahesh Moralda.

898
00:48:48,120 --> 00:48:54,040
Speaker 1: Yeah, absolutely, Gel's quite nicely with last week's episode. I

899
00:48:54,080 --> 00:48:56,520
Speaker 1: really loved that the story of Foundry Lab, which I

900
00:48:56,520 --> 00:49:00,279
Speaker 1: think Kylo's is one of the companies he's most proud

901
00:49:00,360 --> 00:49:04,160
Speaker 1: off really and in America, they've got a factory set

902
00:49:04,239 --> 00:49:08,239
Speaker 1: up there, they're raising Series B, so they're well on

903
00:49:08,280 --> 00:49:11,200
Speaker 1: their way. So how do you or can you even

904
00:49:11,280 --> 00:49:13,799
Speaker 1: sort of systematize that? So rather than that just being

905
00:49:13,840 --> 00:49:17,880
Speaker 1: a random discovery that a proactive venture capitalist comes across that.

906
00:49:18,320 --> 00:49:21,120
Speaker 1: There's a whole pipeline coming out of our research c

907
00:49:21,239 --> 00:49:23,520
Speaker 1: into where one thing builds on another so that we

908
00:49:23,680 --> 00:49:28,880
Speaker 1: have a lot more of those opportunities that are attracting cash.

909
00:49:29,040 --> 00:49:32,279
Speaker 2: Yeah, I mean taking the number eight wire mentality and

910
00:49:32,800 --> 00:49:35,600
Speaker 2: going from oh, okay, you've you've created a cool little

911
00:49:35,640 --> 00:49:37,560
Speaker 2: way to fix something to hey, how can you make

912
00:49:37,600 --> 00:49:40,080
Speaker 2: money off that cool way to fix something like that?

913
00:49:40,080 --> 00:49:43,680
Speaker 2: That's that's a big part of it. I think the

914
00:49:43,760 --> 00:49:47,560
Speaker 2: other interesting thing that I thought Carl said was that

915
00:49:47,960 --> 00:49:51,600
Speaker 2: we confuse capital raising with success sometimes. I thought it

916
00:49:51,719 --> 00:49:55,120
Speaker 2: was a quite a poignant moment to take because I think,

917
00:49:55,440 --> 00:49:57,040
Speaker 2: you know, you do get a bit fixated on the

918
00:49:57,040 --> 00:50:02,359
Speaker 2: big numbers sometimes, especially as media and audience. We go, oh,

919
00:50:02,440 --> 00:50:04,640
Speaker 2: big number, let's report it and talk about how awesome

920
00:50:04,680 --> 00:50:07,400
Speaker 2: it is. But it is important to remember that that

921
00:50:07,520 --> 00:50:10,080
Speaker 2: is just a first step a lot of the time,

922
00:50:10,360 --> 00:50:13,439
Speaker 2: and it's you know that the money is being put

923
00:50:13,480 --> 00:50:18,040
Speaker 2: in ahead of what will hopefully be a good company,

924
00:50:18,280 --> 00:50:20,279
Speaker 2: not because it is already one.

925
00:50:20,480 --> 00:50:24,719
Speaker 1: Yeah, how big the round is and who's involved in it.

926
00:50:24,880 --> 00:50:29,840
Speaker 1: That was really interesting from Kyle. A actually don't count

927
00:50:29,840 --> 00:50:32,200
Speaker 1: for as much as how you're spending it and a

928
00:50:32,239 --> 00:50:37,160
Speaker 1: return you're getting on it, that's a crucial measure. So yeah,

929
00:50:37,160 --> 00:50:39,799
Speaker 1: it's great. We've got people like this switched on and

930
00:50:39,920 --> 00:50:42,759
Speaker 1: now have ten years at least of experience doing this

931
00:50:42,920 --> 00:50:46,879
Speaker 1: behind them. Yeah. I hear mixed things about about the

932
00:50:46,920 --> 00:50:52,000
Speaker 1: incubator programs. Some people I've spoken to say it's done

933
00:50:52,160 --> 00:50:56,320
Speaker 1: really well. Others say the numbers involved are quite small.

934
00:50:56,320 --> 00:50:58,319
Speaker 1: The seven hundred and fifty thousand were payable. Grand if

935
00:50:58,320 --> 00:51:00,640
Speaker 1: we want to get serious about the we need to

936
00:51:00,880 --> 00:51:05,280
Speaker 1: ratchet up that money, which in the current environment is challenging.

937
00:51:05,560 --> 00:51:08,120
Speaker 1: But it seems you know, that's eighty or so companies

938
00:51:08,120 --> 00:51:10,560
Speaker 1: that have gone through that. I would say that a

939
00:51:10,680 --> 00:51:15,239
Speaker 1: number of them wouldn't have gone through as quickly if

940
00:51:15,280 --> 00:51:18,719
Speaker 1: they didn't have, you know, an interest free loan of

941
00:51:18,840 --> 00:51:22,080
Speaker 1: seven hundred and fifty thousand dollars, you know, like the

942
00:51:22,239 --> 00:51:25,040
Speaker 1: likes of B. Speckle, the Green Hydrogen Company. I know

943
00:51:25,080 --> 00:51:27,879
Speaker 1: they found that particularly useful. But not only that, you've

944
00:51:27,880 --> 00:51:31,080
Speaker 1: got the investment coming in from the incubator itself and

945
00:51:31,120 --> 00:51:36,120
Speaker 1: all the mentorship that goes around that. So even a

946
00:51:36,160 --> 00:51:38,680
Speaker 1: relatively small amount of money, probably compared to deep tech

947
00:51:38,680 --> 00:51:42,359
Speaker 1: companies overseas, can can help them get where they want

948
00:51:42,360 --> 00:51:43,400
Speaker 1: to go a lot quicker.

949
00:51:43,880 --> 00:51:47,080
Speaker 2: Yeah, yeah, And that's basically what we have to do. Like,

950
00:51:47,360 --> 00:51:49,000
Speaker 2: as a small country at the moment, we don't have

951
00:51:49,040 --> 00:51:50,840
Speaker 2: a choice. We can give what we can give, but

952
00:51:51,440 --> 00:51:55,360
Speaker 2: in a constrained capital environment and with a lot of

953
00:51:55,400 --> 00:51:59,239
Speaker 2: economic dunbar pressure like we have to make do. And

954
00:51:59,280 --> 00:52:01,200
Speaker 2: we can argue that we need more all we like,

955
00:52:01,520 --> 00:52:03,680
Speaker 2: but at some point we just have to go. Well

956
00:52:03,920 --> 00:52:05,840
Speaker 2: until then, we just have to keep doing what we

957
00:52:05,880 --> 00:52:06,840
Speaker 2: can do with what we have.

958
00:52:08,000 --> 00:52:12,280
Speaker 1: Absolutely well, that's it for this episode of the Business

959
00:52:12,280 --> 00:52:14,759
Speaker 1: of Tech Power by two degrees Business. Thanks so much

960
00:52:14,800 --> 00:52:16,920
Speaker 1: to Carl Jones for coming on the show.

961
00:52:17,280 --> 00:52:19,160
Speaker 2: You can find the stories we talked about today and

962
00:52:19,239 --> 00:52:22,279
Speaker 2: links to other interesting tech stories over on businessdesk dot

963
00:52:22,320 --> 00:52:24,960
Speaker 2: co dot nz, and you can subscribe and listen to

964
00:52:25,000 --> 00:52:28,279
Speaker 2: all episodes of the podcast on iHeartRadio or wherever you

965
00:52:28,320 --> 00:52:29,200
Speaker 2: get your podcasts.

966
00:52:29,320 --> 00:52:32,680
Speaker 1: Drop us a line with suggestions for future guests. Email

967
00:52:33,080 --> 00:52:36,319
Speaker 1: Ben on Ben at businessdesk dot co dot nzed. We'll

968
00:52:36,320 --> 00:52:39,400
Speaker 1: find both of us on LinkedIn and x We also

969
00:52:39,480 --> 00:52:42,560
Speaker 1: now have a LinkedIn page devoted to the podcast. Just

970
00:52:42,600 --> 00:52:45,640
Speaker 1: search for the Business of Tech Podcasts and you'll find.

971
00:52:45,400 --> 00:52:47,520
Speaker 2: It you can engage with us there. You can comment

972
00:52:47,560 --> 00:52:50,080
Speaker 2: on stories and let us know what you think, or

973
00:52:50,160 --> 00:52:52,680
Speaker 2: you can you know, invite other people to listen as well,

974
00:52:52,719 --> 00:52:56,319
Speaker 2: which is always appreciated. We've got another episode coming your

975
00:52:56,360 --> 00:52:57,759
Speaker 2: way next Thursday.

976
00:52:58,520 --> 00:52:59,080
Speaker 1: Catch you then,