Capital Markets: Giving start ups an early boost

The Tuhua fund plans to invest up to $1 million per start-up. Photo / iStock

The Icehouse and ICE Angels have recently launched a $10 million fund which they plan to invest in 25 start-ups over the next three years.

The Tuhua fund was established last November, with cornerstone investors being former local Microsoft executive Ross Peat, Japan's internet pioneer Tim Williams, former PwC partner Richard Burns, software entrepreneur Dennis Row, The Icehouse CEO Andy Hamilton and ICE Angels chief Robbie Paul. The Warehouse founder Stephen Tindall has since joined and is now the biggest investor with $250,000.

Although The Icehouse and ICE Angels have an active platform for start-ups and angel investment, they identified a couple of issues in the market. The first was how hard it is for start-ups to raise their initial funding, and the second was the challenge that comes with raising a large funding round.

"Both of these areas we thought could do with some energising through an investment from the fund," says Hamilton. "We are also able to be opportunistic on great deals out there that require quicker decisions when others are leading the investment. We wanted the fund to power up our angels to do more deals, do more investment and influence more growth."

The fund plans to invest up to $1 million per start-up, and has so far made three investments -- Avertana, which extracts high value chemicals from industrial waste; Nyriad, which develops software to rapidly compresses and stream data; and a co-investment with Sequoia Singapore and Sky TV in 90 Seconds, a cloud video production platform. The fund is expected to announce their fourth investment soon.

"In addition to active board members and advisors, investees will have access to board observers who are charged with unloading administrative tasks off the founders, mining our networks for talent, and enabling data-based decision making by leveraging insights from our 97 investments," says Robbie Paul. "The start-ups will also have access to The Icehouse space in Parnell and its team".

"The Fund will really speed up the path to market for these start-ups and it will unleash the network of investors that have come on board with the Fund," adds Hamilton.