A $40 million New Zealand-based venture capital fund has been established involving a partnership between the New Zealand Venture Investment Fund and Peter Thiel’s Valar Ventures. Valar has been operating since 2010 with the current investment round closing on January 1 of this year. Peter Thiel is a prominent United States technology investor. He co-founded and was CEO of PayPal before he sold it to eBay, and was the first outside investor in Facebook. Valar Ventures provides growth capital to early-stage New Zealand technology companies for the development of technology and expansion into overseas markets.
NZVIF chief executive Franceska Banga said the partnership brings not only new capital but also deep experience in developing world-leading technology companies and significant networks into the United States and international markets.
“Peter Thiel is one of the world’s most successful technology investors. He and his team bring a considerable track record of expertise and resources. For young New Zealand technology companies, Valar Ventures’ presence in the New Zealand market is a significant opportunity. “Alongside a scarcity of investment capital, the biggest challenge facing early-stage New Zealand technology companies is breaking into international markets. For web-based technology companies especially, the major market is the United States. That is where Valar Ventures’ networks – whether in Silicon Valley or on Wall Street – will be significant.
“Valar Ventures also brings considerable experience to bear on behalf of their portfolio companies. Their team has been through every stage of the start-up process, from inception to IPO, and they have the financial resources to fund companies throughout their growth stages.
“With NZVIF and other New Zealand investors, such as investment company Rangatira, participating in the Valar Ventures fund, we will retain a New Zealand stake in these businesses as they look to build an offshore presence and become international companies.” Thiel said New Zealand is an attractive investment proposition.
“Over the last several years, New Zealand has been nurturing more early-stage tech companies. I’m delighted that the government’s New Zealand Venture Investment Fund is partnering with Valar Ventures to enable more of them to expand and compete on the global level.”
“Through our work with globally focused technology companies like Xero, we’ve seen how much New Zealand’s start-up ecosystem is flourishing,” said Valar Ventures’ Andrew McCormack. “We were drawn to invest in New Zealand because of the vision and hard work of entrepreneurs like Sam Morgan and Rod Drury, incubators such as the Icehouse, and government initiatives like the NZVIF. New Zealand has good technical talent and an attractive cost base, and we’re looking forward to strengthening the ties between Silicon Valley and New Zealand.”
Valar Ventures LP is a $40 million fund with $20 million committed by NZVIF, approximately $5 million from other New Zealand investors, and the balance from Thiel.