Tauranga's New online funding platform AngelEquity gaining support

START-UPS: New crowdfunding platform beginning to attract wholesale investors, says Enterprise Angels Bill Murphy. PHOTO / FILE

Enterprise Angels online wholesale investor platform AngelEquity is beginning to develop some traction, says executive director Bill Murphy.

While it has yet to generate significant capital in its own right from new wholesale investors, it has become the go-to source of information for members and an increasing number of outsider investors since it was launched in September, he said.

"Equity Angel works both inside and outside Enterprise Angels," said Mr Murphy.

"The main purpose of building the site was to prove up the premise that we can attract wholesale investors and they'll recognise the advantages of investing in deals that have received the due diligence and validation of investors like our members."

AngelEquity offers investors the opportunity to invest in a broad selection of early-stage investments presented by angel groups from around the country. It differs from other crowd-funding platforms in that it is only open to qualified wholesale investors.

To date, about $430,000 has been raised directly on the site, most of that for Enterprise Angels' second fund, EA Fund 2, as well as smaller amounts for Tauranga's Roholm, manufacturer of the Inverse ice-cold hair treatment system, and Waikato agritech startups Quantec and Synthase Biotech.

However, the three companies have raised a total of more than $2.4 million, attracting investment from a range of sources including Enterprise Angels members, the Government's Seed Capital Investment Fund and other angel groups.

"It will take time to build up because we have to make the case to the wider community of wholesale investors," said Mr Murphy.

"But in the meantime AngelEquity is proving to be incredibly valuable for inter-angel activity - raising funds for angel deals already backed by one or more angel group. And also for Enterprise Angels' internal capital raises."

All information on the group's deals was now accessed through AngelEquity and Enterprise Angels could control the information available to different investor groups, he said.

"It's become the go-to source of information on all current deals for our EA members."

Enterprise Angels is the biggest group of its type in New Zealand with 200-plus members from Tauranga, Rotorua, Taupo and - with the expansion of the group last year - Waikato. It is helping provide funding to early-stage companies throughout New Zealand, and increasingly in the central North Island region.

Three Waikato companies have raised funds through Enterprise Angels and Quantec and Synthase Biotech both attracted strong interest when they listed on AngelEquity.

Quantec raised a total of $429,000 - above the targeted $320,000, with a $100,000 contribution from the Government's Seed Co-Investment Fund. Quantec uses its patented discovery of a novel milk protein to develop applications in human and animal health.

"Enterprise Angels worked with us to secure funding from Seed Co-Investment Fund, Enterprise Angels members, EA Fund 2 and wholesale investors on AngelEquity," said Quantec chairman John Birch.

Synthase Biotech reached its target, with an injection of $800,000 in the start-up's latest round, including funds from the New Zealand Venture Investment Fund and existing investors. The company has developed a unique enzyme which remediates damage from oxidation of fats in cell membranes.

Chairman Mark Backhaus noted the support from Enterprise Angels, Auckland's Ice Angels and the New Zealand Investment Fund in accelerating its scientific and intellectual property programmes, as well as its commercialisation effort.

Enterprise Angels

-Launched: 2008.
-Funded: More than $22 million in 53 early-stage and established businesses across a variety of industries.