Rangatira invests in three early stage high-growth ventures
29 March 2012
Wellington investment company Rangatira today announced that it had invested around $5 million in three early stage high-growth ventures; online accounting software provider Xero (XRO), Valar Ventures and Movac’s Fund 3 (The New Zealand Growth Fund).
Rangatira’s Chief Executive Ian Frame says, “These investments are consistent with our overall strategy of investing in business for growth and all are either New Zealand-based or plan to invest in New Zealand companies. While they are comparatively early stage investments, that is not unprecedented either; amongst other things Rangatira was a foundation investor in Rotorua’s Polynesian Spa 40 years ago and undertook the initial development of the James Cook Hotel in Wellington.”
The three investments account for some 5 percent of Rangatira’s investment portfolio. Rangatira has around $100 million invested in privately held unlisted New Zealand companies, about $40 million of listed equity investments and is currently holding some $15 million in cash with no debt.
All three investments have commonalities; they are New Zealand-based and invest solely in New Zealand companies with the potential for large and rapid growth. Xero was founded in 2006, listed on the NZX the following year and has a current market capitalisation today of some $298 million.
Movac is a New Zealand investment manager that provides venture and early stage capital to companies with high growth potential. Its first fund was an early investor in TradeMe, which returned over 500% in seven years. Movac’s Fund 3 is looking to invest some $38 million primarily in a range of technology companies that have market proven products, a scalable business model with dominant characteristics, and that are starting to sell internationally.
Valar Ventures LP, established by PayPal co-founder and early Facebook and LinkedIn investor Peter Thiel, is a $40 million fund recently established to invest in high-growth New Zealand technology companies that are capable of launching into markets beyond Australasia. The Fund aims to make an initial investment of between $1 million and $5 million in each company in takes into its portfolio.
“These three investments mark an evolution of Rangatira’s investing in business for growth strategy by investing in early stage companies and by helping support investment funds that specifically target emerging New Zealand companies with high growth potential,” Ian Frame said.
Further investment planned
Last year, Rangatira sold three investments it had held for many years - Dunlop Living, Tecpak Industries and Te Kairanga Wines.
Ian Frame says that these early stage high-growth investments are not intended to replace the companies it had sold, nor do they fundamentally change Rangatira’s overall investment strategy.
“As signalled late last year, in 2012 we are looking to invest in up to three mid-sized unlisted New Zealand companies with good growth potential that require additional capital to take them to the next stage. To this end we have around $30 million of funds to invest either on our own or in companies that meet our criteria alongside other like-minded investors.”
Rangatira’s unlisted portfolio currently includes Auckland Packaging Company (since 1999, 100% owned); Contract Resources Holdings (since 2004, 50% owned); Greenfield Rural Opportunities (since 2008, 16% owned); Hellers (since 2004, 50% owned); Polynesian Spa (since 1972, 51% owned); and Precision Dispensing Systems (since 1999, 80% owned).
Rangatira’s shares are listed on the Unlisted platform.