Sir Peter Beck's Outset Ventures has raised $45.5 million to invest. Photo / Dean Purcell
Sir Peter Beck's Outset Ventures has raised $45.5 million to invest. Photo / Dean Purcell
Outset Ventures – which numbers Sir Peter Beck on its investment committee – has raised $41.5 million for its second venture capital fund, including $15m chipped in from the Crown-backed Elevate funds.
The sum is well ahead of the initial “Fund II” target of $30m and a big jump onthe $12m raised for Fund I in 2021.
Outset is run by Dr Sean Simpson and Mat Rowe – both alumni of the Auckland-founded, now Nasdaq-listed clean tech firm LanzaTech and focuses on their shared interest with Beck in “deep tech” start-ups – those that require a lot of hard science and R&D.
Another firm, OpenStar, has 50 physicists in Wellington working on a possible nuclear fission breakthrough that would provide abundant clean energy at low cost, albeit not until the mid-2030s under the best-case scenario (deep-tech investments are often long-term).
LanzaTech Sean Simpson with Outset Ventures Mat Rowe. Simpson has been "paying it forward" by investing in a new wave of Kiwi start-ups. Photo / Dean Purcell
Outset is now on the hunt for Fund II investments, which could be in a new wave of start-ups, top-up investments in its existing portfolio, or a mix of both.
It won’t name any targets, but speaking to the Herald last month, Beck did describe his thinking when a start-up founder appeared, Dragon’s Den-style, in front of Outset’s investment committee.
“I always say, ‘Show me a path to a billion-dollar company, or you haven’t got my vote’,” Beck said.
“The definition of success is a company getting so big they can go global – and that’s what we should be celebrating because it all benefits New Zealand one way or the other."
Elevate, which is managed by NZ Growth Capital Partners, was allocated $300m in Budget 2020. The aim was it would pep up New Zealand’s venture capital (VC) scene as a fund-of-funds that co-invested with local VC players.
The $15m put into Outset’s Fund II is one of the final cheques cut from Elevate’s original funding, along with $10m for Pacific Channel (announced last week) for its $50m Fund III.
Surprising the industry, the nearlyexhausted Elevate received a top-up of $100m in Budget 2025, which was both more than the sector’s expectations (nothing) but shy of its hopes ($500m).
“Outset has an incredibly strong investment platform backed by a team with the experience and skills necessary to support the next generation of deep-tech start-ups in New Zealand,” said James Pinner, chief investment officer with NZ Growth Capital Partners, which manages Elevate.
Investing ... and incubating pep up
Outset occupies Future House in Parnell, where it also hosts deep tech firms in its other role as a business incubator.
The legendary Balfour Road building once housed the Department of Scientific and Industrial Research (DSIR), then its successor Industrial Research Ltd (IRL, which became part of Callaghan Innovation, itself now part of the latest Crown research restructure).
Beck, Simpson, and Rowe all had digs there during its IRL days in the 2000s. Famously, a young Beck took a chunk out of the basement wall during an early Rocket Lab engine test (see it in the clip above).
“Outset began as a garage for tinkerers. Today it’s a 5000-square-metre campus with labs, containment rooms and engineering workshops,” Beck said.
“Fund II keeps that momentum alive as we support the next generation of superstar start-ups.”
New Zealand is known for producing Xero and other firms in cloud software – a “weightless” export that defeats the tyranny of distance.
But that’s not Outset’s focus. Its backers have a bent for people who want to make physical products, from solar panels to satellites.
Simpson told the Herald: “We need to do more things to grow our GDP. We need to be producing more products.
“We need a broader industrial base, more high-paying jobs in more industries.”
Chris Keall is an Auckland-based member of the Herald‘s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
