KEY POINTS:
An investment fund that plans to spend up to $100 million to help innovative Kiwi companies has been given more than $14 million of Government money.
Pioneer Capital Partners' New Zealand Innovation Fund has received $14.45 million from the Government's New Zealand Venture Investment Fund, which was set
up in 2002.
Randal Barrett, Pioneer general partner, said the Pioneer fund was looking to invest between $80 million and $100 million during the next five years.
The fund will predominantly invest in expanding, export-focused companies involved in manufacture and design, and in information and communications technology.
Typically, a technological element would be involved, but it was often more about clever marketing and having an innovative product, Barrett said.
Pioneer would be an active investor in companies whose management was as important as their product.
"We have a fairly clear mandate that it's the people that really count as much as, if not more than, the technology," Barrett said.
"We sit on boards ... we do roll up our sleeves and help grow the business."
The Pioneer fund, which has made one undisclosed investment, had looked at hundreds of candidate companies and was currently working through a shortlist, Barrett said.
NZVIF chief executive Franceska Banga said Pioneer's Innovation Fund was good news for technology firms looking for growth capital and to expand overseas.
Venture capital investment was too risky for some private investors, Banga said.
"We are filling a gap and we are building a marketplace ... around the risk capital and the capability to assist these young, high-growth companies to find their feet and start moving into the global market place."
The Pioneer fund was the sixth involving NZVIF's venture capital programme, joining iGlobe Treasury Management, TMT Ventures, No 8 Ventures, Endeavour iCap and BioPacificVentures.
The venture capital programme had so far seen 36 early stage companies receive $118 million, including money from private investors.
NZVIF makes investments into venture capital funds matched by private capital on a variable ratio depending on the investment strategy of the fund.
NZVIF currently had $70 million available to invest in venture capital funds and would be asking for proposals from interested parties later this year.
Economic Development Minister Trevor Mallard said the latest partnership would help the goal of building venture capital support for potentially high-growth, start-up businesses.
"It is also great to see this fund aim to help these companies get into international markets."
What It Does
New Zealand Innovation Fund:
* $14.45m of Government support.
* $80m-$100m investment over five years.
* Focused on expanding export companies.
* Hands-on support to help firms grow.