Steven Joyce announces $15m boost to turn ideas into high-tech businesses

The Icehouse helped Crimson Consulting, the brainchild of young New Zealanders Jamie Beaton (pictured) and Sharndre Kushor, raise $1.4 million in start-up funding. Photo / Getty Images

Entrepreneurs wanting to turn research into a business will be able to apply for help from business incubators that have been boosted by $15 million in new funding.

Science and Innovation Minister Steven Joyce made the pre-Budget announcement this morning.

An existing "Pre-Seed Accelerator Fund" will be boosted by $12 million in new funding over four years, taking the total investment to $8.3 million a year.

The fund aims to help scientists convert research into commercial products and businesses.

"Making the most of some of the excellent ideas that emerge every day from our scientists and researchers is vital for growing a more high-tech, diverse New Zealand economy," Mr Joyce said.

The remaining $3 million of new funding over four years will extend funding to accelerator programmes after the scheme's initial three-year pilot.

"After seeing positive results from the pilot accelerator programmes over the last three years, I am pleased to announce that we have decided to extend the funding," Mr Joyce said.

"These programmes help entrepreneurs develop innovative companies more quickly and fast-track their business ideas."

Mr Joyce said Callaghan Innovation's pilot accelerator programme was typically run over three months. Of the 38 teams that completed the first four accelerator programmes, 18 had secured a total of more than $8 million in private investment.

He said a recent evaluation estimated that pre-seed projects had so far generated $188.2 million in revenue.

The three "Lightning Lab" accelerators that currently receive funding from Callaghan Innovation are The Icehouse in Auckland, Creative HQ in Wellington, and Canterbury Development Corporation in Christchurch.

Accelerator programmes focus on intensive product development to establish a start-up.

They are designed to complement services offered by "technology incubators", that identify commercial opportunity and build a business around it to attract investors.

The programme concludes with a pitch to potential investors at which seed, angel or venture capital funding might be attracted.

The Icehouse has previously helped Crimson Consulting, the brainchild of young New Zealanders Jamie Beaton and Sharndre Kushor, raise $1.4 million in start-up funding.

The education consultancy later raised more than $7 million from international hedge fund managers in a US$50 million valuation of the company.