Elevate NZ backs Pacific Channel Fund III with $10 million

Elevate NZ Venture Fund is making a $10 million follow-on investment into Pacific Channel's Fund III to support the expansion of deep-tech companies in New Zealand.

Elevate was set up by the government to boost investment into high growth early-stage New Zealand companies and to advance the local venture capital ecosystem. Managed by NZ Growth Capital Partners (NZGCP), the fund recently secured a further $100 million allocation as part of the nation's latest Budget.

James Pinner, Chief Investment Officer at NZGCP, commented on the renewed support for Pacific Channel. "Pacific Channel has progressed well since our initial investment into its previous fund and we're happy to be supporting them again with an investment into Fund III. Pacific Channel continues to support a diverse cohort of deep-tech companies from early-stage through the growth cycle," he said.

He also highlighted developments within Pacific Channel's organisation and outlook. "We're also really encouraged by the continued development of the Pacific Channel team, evolution of their growth as a manager and the expansion of their offering including acceptance as a Callaghan Innovation Deep Tech Incubator. We are looking to back VC managers who are as ambitious as the start-ups they back so it's fantastic to see the investment they're making into building a deep team of experts and also their expansion into Australia through a separate Fund, which provides it with the capability to support even more diverse deep-tech start-ups," Pinner stated.

Brent Ogilvie, Managing Partner at Pacific Channel, commented on the significance of the partnership and the direction of the fund. "This investment from Elevate recognises the strength of our partnership and shared commitment to building globally impactful New Zealand companies. With over $50 million already committed to Pacific Channel Fund III, we are well-positioned to continue identifying breakthrough technologies addressing critical global challenges, creating high-value jobs, and generating intellectual property that remains in New Zealand ownership."

Ogilvie discussed Pacific Channel's track record and approach to investment. "Over the past 20 years, Pacific Channel has invested in more than 66 companies and achieved 11 successful exits, generating proven, high returns. Fund III continues this disciplined approach - delivering significant value to investors while commercialising world-class New Zealand science," he said.

Elevate operates by co-investing into early-stage venture capital funds alongside matching levels of private capital. These funds subsequently invest directly into New Zealand growth businesses on a commercial basis. Launched in 2020, Elevate has now allocated $232 million across ten funds managed by seven separate fund managers.

The fund has recently seen realisations from investments into Movac, GD1, Nuance, Hillfarrance and an earlier Pacific Channel fund, among others. These realisations serve as demonstrations of returns and portfolio development within the New Zealand ecosystem.

In addition to Elevate, NZGCP also operates the Aspire Seed Fund, which invests directly into earlier stage companies, ranging from proof of concept to Seed and pre-Series A stages. This is typically in conjunction with private sector investors, including angel groups. Aspire has been operational in various formats since 2006, realising investments in companies such as Kami, Tradify, Yabble, and more recently Quantifi Photonics.

The returns generated by Elevate and Aspire are indicative of the long-term nature of early-stage company investment and will be reinvested to support the next generation of New Zealand's growth companies.