WNT Ventures is a venture capital fund focusing on deep technology: innovations in tangible science and engineering breakthroughs and the teams behind them. It calls itself a “high conviction” partner, supporting entrepreneurs from the earliest stages and connecting them with the resources and knowledge they need to take their business global. We speak with Managing Partner Carl Jones and Investment Manager Maria Jose Alvarez about what they mean when they say they’re “deeply invested”.
WNT Ventures is excited by fundamental shifts in science and engineering. It wants deep technology to be among New Zealand’s fastest-growing and highest-value creation sectors. The fund is focused on artificial intelligence, agritech and food, medtech, automation, engineering and sustainability, with a leaning towards products or services which can be seen, felt or touched. It’s seeing a lot of activity in climate tech, medtech and aerospace at the moment.
“To us, deep technology means science-anchored, research-based innovations with strong defensibility. The opportunity must be unique, with a compelling competitive differentiation, and address a significant global market pain point,” says Managing Partner Carl Jones.
The seven-person team and an associated network of consultants have operating experience and strong relationships across sectors of interest, both locally and internationally. “That means we can bring a lot of value to companies in this space.
Our team has diverse backgrounds ranging from supply chain and industrial design to biomedical expertise, so while we specialise, we are sector-agnostic.”
Carl says New Zealand’s science and engineering capability is very strong, and that tertiary institutes like the University of Auckland have a commercial mindset from the beginning. That’s particularly important for the initial investors in a start-up.
High conviction, hands on
“We are the first-stage investors, we become that bridge from having an idea from the lab to taking it into the market. We can see what the business case will be because we understand the science.
“Primarily we deal with pre-seed to series A investment, and with the majority of projects, we engage with the entrepreneur at the very beginning of their commercial journey.”
Investment Manager Maria Jose (MJ) Alvarez explains that a lot of venture capital companies say they are active investors, but what that means can vary.
“We really are seriously involved. In a number of our companies, we roll our sleeves up to support early-stage founders to build teams and network overseas. Our tagline, ‘deeply invested’, resonates in the marketplace and reflects how we operate in a holistic manner.”
Because it is so high-touch, WNT focuses on a select number of deals each year, ensuring there’s alignment with each other’s values.
“We are very selective and invest in only five to six companies each year. In 2021, we looked at over 300 proposals to find the ones we would back. We seek start-ups and we are involved to the extent that an entrepreneur needs it. We also work with very experienced founders, providing customised support as required,” says MJ.
Funding round three
The company raised its third fund in 2021, raising up to NZ$11.25 million from wholesale investors. Alongside this it receives another $11 million from New Zealand’s innovation agency, Callaghan Innovation, so is deploying approximately $22 million into pre-revenue, New Zealand-based deep technology start-ups. It works alongside supportive private-sector stakeholders both in New Zealand and internationally.
WNT Ventures is one of four partners in Callaghan Innovation’s Technology Incubator Programme, which allocates funding and support to the commercialisation of complex products and technologies. This includes $750,000 in the form of a repayable loan which provides non-dilutive funding to start-ups in their portfolio. The team at WNT Ventures, including their impressive Investment Committee, brings a variety of experience and skillsets and connections to help support companies at whatever stage of growth they are in. Supporting new ventures every step of the way means some founders are still involved with WNT and their portfolio companies long after their operations have matured.
“We get founders whom we invested in many years ago calling as we have become a very trusted advisor through the early stages of their development. We build that trust and see them come back even when we are no longer necessarily the lead investor,” says MJ.
Super curious
“Our superpower is our purpose, driven by curiosity,” Carl says. “If we can remain curious and interested in the technology and the founder then we will identify opportunities more readily than if we were sector-driven. You have to remain open to very strong innovation that will pop out of areas you didn’t anticipate.”
By way of example, he references Hairspace (formerly HairSense), an automated haircutting tool which can map the length of the hair across the head and recreate that haircut the next time.
“It’s a very unusual opportunity, using machine vision and tracking technology they’ve developed. Although it’s in its early stages, if it takes off it could be a game changer for haircutting. For Hairspace, the tech they are developing is the interesting part of the IP. A lot of work we do with early stage is the IP strategy and how you protect all those layers.”
Experienced, solid investors
WNT Ventures has offices in Auckland and Tauranga. Its base of investors includes a mix of institutional companies such as Quayside Holdings and Bay Trust, such groups as Enterprise Angels and Angel HQ, and a range of family offices and private investors throughout much of New Zealand. The offshore investors have mostly been individuals or family offices. They tend to be technologists and are very interested in helping companies with positive societal impact. Established eight years ago, Carl says WNT Ventures is the longest-standing technology incubator supported by Callaghan Innovation.
“You get to Fund III only when you’re doing it right. We have built this diverse team by design, to provide a range of experiences, especially with our supply chain and hardware background. We each bring a strong and interesting lens to the table and to the investment committee based in London and Silicon Valley,” he says.
And the experience includes working as both funders and founders. For example, MJ commercialised her undergrad research, which involved university intellectual property. “A few members of the team have been on the founding and operating side,” she explains. “We have a lot of experience in raising capital and understand the complexities of spinning out deep-tech companies based on science and engineering, which brings a sense of fairness to the relationship.”
Broadening the investor network is WNT Ventures’ goal. The company has attracted direct investment alongside its funds, creating partnerships with investors and founders, and this approach has worked well. Partners tend to love technology and make their own networks available to support entrepreneurs as they grow.
Supporting Argo Navis Aerospace
One of the companies the team has been working closely with is Argo Navis Aerospace in Auckland, who is developing innovative chemical propulsion systems for the space industry. The company was founded by CTO Dr Malcolm Snowdon, who was an early employee of Rocket Lab. They were successful recipients of funding from WNT Ventures’ second fund.
This investment was able to attract Callaghan Innovation’s repayable loan funding to help deliver on the technical milestones they were trying to achieve. The company focuses on upper-stage engines, developing propulsion systems that are scalable, simple and elegant. It seeks to remove the obstacles of propulsion by simplifying engineering.
Auckland — a global city
Carl and MJ can’t speak highly enough about Auckland as a base.
“We don’t need to explain to investors why we’re running a VC fund here,” says Carl. “If you are looking at world-changing technology in the next ten years, you should be looking at Auckland. It’s respected, people know it.
“The city is a melting pot of ideas, making it a good testing bed for many areas, such as running clinical trials in health. Farms are nearby for testing. All the large engineering firms are condensed in the city, all the specialties are located here.
“As an incubator, New Zealand is ideal. It’s diverse, it’s advanced, so global companies can test in a safe environment, fail, adjust and reprioritise. It makes total sense to build and develop here before scaling.”
Find out more
Contact Investment Specialist Paul Wilkinson to learn more about investing in technology in Auckland, New Zealand.
DISCLAIMER: This article provides general information on potential investment opportunities in Auckland and is not intended to be used as a substitute for financial advice. The views and opinions expressed are those of the relevant author, and do not necessarily reflect the views of Tātaki Auckland Unlimited. Tātaki Auckland Unlimited disclaims all liability in connection with any action that may be taken in reliance of this article, and for any error, deficiency, flaw or omission contained in it.