The latest survey of our (tightening) venture capital scene found a heavy focus on investing in “deep tech” – or research and development-heavy startups that hope to become the next Rocket Lab or
Fisher & Paykel Healthcare. It appeals to our No 8 wire, practical ethos.
Software-as-a-service firms, hoping to become the next Xero, have been another big favourite for local venture capital investment. The ideas is that selling and using software via the cloud eliminates the tyranny of our remote geography.
But with Brand Fund 1, entrepreneur (and some-time fashionista and media hound) Simon Pound is taking a new approach, looking for early-stage firms who show promise in the more elusive, less tangible field of creating a brand.
He’s billing the Auckland-based effort as Australasia’s first brand-led venture capital investment fund.
Pound says his marketing and brand development consultancy, Previously Unavailable, was often doing “equity for services” deals with early-stage firms. That is, getting paid in shares.
He realised he was getting an inside look at who might be the next hot startup, and the idea for a brand-focused venture capital fund was born.
Brand Fund 1 was launched as a joint venture between Previously Unavailable – which provides the talent-scouting smarts and mentoring for recipients – and Icehouse Ventures, which brings its venture capital nous and takes care of all the back-office practicalities.
Between them, Previously Unavailable and Icehouse put $300,000 of their own capital into the new fund when it launched at the end of February, with an initial target of raising $1-2 million from outside investors for seed and even “pre-seed” investments. But following interest from across the Tasman, it’s just closed with $4m committed.
While it’s still very much a boutique fund, Pound says the top-up will allow Brand Fund 1 to start writing bigger cheques than its original plan and allow for around a third of the fund to be used for follow-on investments.
“It’s amazing to have this support in this difficult funding environment – which is testament to the companies we are working with,” Pound says.
“It has been so cool to see the support out there for a fund like this – a real sign the tech and high-growth and VC environment here is maturing.”
Brand Fund 1 backed three companies with its first wave of investment: Tracksuit (which measures a firm’s “brand health” for much less money than the big survey firms), Aglow, which is pioneering a subscription-based approach for beauty salon visits, and AF Drinks (the AF stands for Alcohol Free).
It’s just put money into four more: supplement maker Calocurb, Ideally (customer insights), MenuAid (menu plans) and Compostic (compostable cling wrap).
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.
