Trailblazing deep tech investors dig into fourth NZ fund

After ten years in the “deep technology” game and with three successful funds under their belt, the team at WNT Ventures is looking to launch its biggest fund yet, giving another crop of New Zealand company founders access to vital seed funding and investors a new path to a proven alternative asset sector.

Deep tech, which refers to advanced technologies based on some form of substantial scientific or engineering innovation, is generally viewed by financial advisers as a significantly high risk venture. Yet WNT seems to represent a new breed of dedicated and experienced active investors in the space, ones that take a systematic approach to supporting and developing founders – in this case ones that are domiciled in New Zealand, which is a surprisingly fertile ground for technology startups.

After launching their first fund in 2014, WNT Ventures is raising for their fourth fund a decade later. The results, so far, have been encouraging. The first (NZ$3.35M) has already been fully returned with three successful investments remaining, while the second and third funds are on a similar track.

The fourth fund will be the WNT team’s biggest yet, with a target range of $35 million. The formula, however, doesn’t look to be changing; the target stage is pre-seed to series A, which means they get a look at pre-revenue companies that have a global opportunity set and strong intellectual property.

According to managing partner Carl Jones the success of WNT’s initial funds, together with strong support from the New Zealand government, has put the group in a good position amplify their ambitions with the latest fund.

“We’re targeting roughly the same number of investments, 10 to 15, as we have before, but the target initial investment will be higher at NZ$1million to $2.5 million,” Jones tells The Inside Adviser. “We’ve put a target for the fund at NZ$35million but we’re also willing to start smaller or extend all the way up to $60million.”

The partnership WNT has secured with the New Zealand government gives them a strong advantage, Jones continues, and a platform for expansion.

“We have a partnership with the government’s grant agency through to 2027 that gives us ten NZ$35,000 grants for due diligence, plus some decent matching on the loan funding side,” he says. “That kind of support helps us narrow down a deal flow of around 300 potentially viable companies down to five or six investments per year.”

The companies WNT partners with form a fascinating kaleidoscope of deep tech ventures based on complex science and engineering solutions. Under the ‘Advanced Materials’ banner, for example, they’ve invested in a company creating a heat absorbing foam-like material that can be used in construction to stabilise temperatures, and a company producing catalyst coated membranes that enhance fuel cell technologies. In the ‘Engineering’ file there’s a company that recreates haircuts using artificial intelligence, and another that uses ultrasound to detect gum disease.

Not all of the science behind this technology is easy to understand, but it sits right in the middle lane for Jones. The managing partner has extensive experience in private equity and investment management in New Zealand and London, and runs the business with fellow managing partner and biotech engineer Maria Jose Alvarez.

According to Alvarez, the team gets satisfaction out of helping “enthusiastic entrepreneurs with groundbreaking ideas” see them come to fruition. “Along the way, they need the right team to chart the course through all the investment and commercialisation decisions that have to be made,” she says. “That’s where we come in.”