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WNT Ventures nears first close on new fund as NZ capital flows into deep tech
A deep tech-fuelled movement is brewing in New Zealand, with a combination of savvy venture capitalism, government support and sustained investor appetite pushing the sector forward.
Such is the momentum in the scene that WNT Ventures, a venture capital firm that invests in deep tech, is on the cusp of closing the first round of funding for its fourth fund – its biggest yet.
WNT’s success is consistent with the group’s track record of raising capital and well-earned after the group’s first NZ$3.35M fund was fully returned with three successful investments ongoing. Since that first fund was started a decade ago, WNT launched two progressively larger and more ambitious VC funds which, as they reached capacity and started allocating capital, rolled into raising efforts for the next fund.
The group’s fourth fund, however, is its biggest yet, which is why managing partners Carl Jones (pictured, right) is relieved to be nearing in on a first close that will signify WNT’s readiness to start deploying.
“We’re not quite there yet but we’re getting close to that mark, with the end goal of reaching NZ$35 million,” Jones tells The Inside Adviser. “But what it will mean is that we stop making new investments for our third fund and start the investment phase for the fourth fund.”
WNT’s ability to both raise capital and reap returns for investors is predicated on a few factors, the first of which is that the deep tech sector – which involves advanced technologies based on some form of substantial scientific or engineering innovation – has access to The Callaghan Innovation Deep Tech Incubator Program, which supports NZ technology start-ups looking for early stage funding. This means companies like ‘Iaso’, which provides AI-based software that provides analytics on a serious respiratory condition, have an extra layer of capital support on top of that provided by WNT Ventures.
While the incubator program, which is part of a New Zealand government initiative, provides capital support, it is the expertise behind WNT Ventures that is really driving its fund raising and the growth of its investee companies. Jones himself has been with the company since it was founded, and comes with a background in private equity and property investment both in New Zealand and abroad. His co-managing partner, trailblazing Chilean biotechnology engineer Maria Jose Alvarez (pictured, right), was nominated as one of the New Zealand’s ‘Women of Influence’ and has become one of the leading figures in New Zealand’s tech venture capitalism scene.
Fundamentally, though, it is the New Zealand deep tech sector that is behind the group’s extraordinary success. While VC generally struggled across the globe in the last few years, a recent PwC report notes that Kiwi investors were “bucking international trends”, with investment levels in startups remaining relatively stable. The biggest driver of that stability, PwC notes, was deep tech.
“Deep tech continues to be a favourite sector for investors, accounting for 38 per cent of total capital funding in 2023,” PwC states. “Software was the second preferred sector, securing 30 per cent of the total investment. Among the deep tech sub-sectors, health tech attracted the lion’s share of the funding (45 per cent), followed by clean tech (23 per cent).
Little wonder, then, that WNT has managed to raise sufficient capital for each of its three preceding funds and sits on the cusp of announcing first close on its fourth. According to Jones, once the first close is reached investment slots in the fund become even more in-demand as investment groups, including HNW investors, financial advisers and family offices, gain confidence.
“There are quite a few investors who’ve indicated that they want to see other investors commit first,” Jones says. “And then you’ve got another handful that won’t invest until final close, but that may also trigger a catch-up payment to make up for the investments already made.
“Fortunately, though, we have a cohort that have seen what we’ve done to this point and have confidence that we have a sustainable model in a sector that’s going from strength the strength. That’s what has got us close to first close and should give us a platform to move forward.”
