Phase One closes $2.1m fund, backs 14 tech startups

Phase One Ventures has completed the final close of its early-stage venture capital fund, which is valued at NZD $2.1 million. It has invested in 14 technology startups based in New Zealand.

Since its launch in mid-2021, the fund has deployed capital across a range of early-stage companies in sectors such as artificial intelligence, health technology, and agritech. According to Phase One, 85% of its portfolio—12 out of 14 companies—have since secured follow-on institutional venture capital funding from prominent firms, including Blackbird, Icehouse, GD1, and several United States-based investors.

"We're extremely proud of what our portfolio companies have accomplished in such a challenging global environment. These companies have collectively attracted between $80-100 million in follow-on investment and created 100-150+ new jobs, many of which are in New Zealand's tech sector," Mahesh Muralidhar, Founder and Chief Executive Officer at Phase One, said.

The fund, anchored by General Development 1 (GD1) and backed by early team members from organisations such as Canva and Kami, has a diverse portfolio. Of the 14 startups invested in, five have female founders, with most serving as Chief Executive Officers. This makes up 36% female founder representation in the fund's portfolio, a proportion considerably higher than industry averages.

Several portfolio companies have attracted further interest from international investors. One company recently raised capital from United States-based firms Fika Ventures and Uncorked Ventures. Notable investments cited by the fund include Ivo, which has reached Series A with backing from both New Zealand and US investors; VXT, supported by GD1; and edtech startups NextWork and Polymath, which have received investment from GD1, Blackbird, and US-based individuals. The fund also lists Cotiss (backed by Blackbird and GTM VC), Aquila Earth, Kiki, Evouch, Cropsy, Extraordinary (formerly HealthNow), KiwiFibre Innovations, and RingRadar among its supported companies. Startups Venu and Ross have yet to secure institutional funding.

Phase One Ventures operates as a 10-year fund, but the management team projects an effective investment cycle of seven to eight years. The fund will now focus solely on supporting the development of these 14 portfolio companies and does not intend to accept any new limited partner investments.

"With the quality of founders and companies in our portfolio, we expect multiple unicorns and significant exits to emerge from this cohort. These companies are positioned to become major tech firms with substantial impact on the New Zealand economy and beyond," Simon Young, Managing Partner at Phase One, said.

"We're thankful for GD1's early belief in our vision as our anchor investor. Most importantly, we believe this community will keep growing to become tremendous role models in high-growth tech, making it even more accessible for more Kiwi entrepreneurs to go big!" Muralidhar added.

"Phase One has been a tremendous addition to the New Zealand early stage ecosystem, and its cohort of companies and founders have been truly 'Global from Day 1' in mindset and action. We are very proud to have played a role in enabling Phase One's venture fund and look forward to seeing this cohort of companies flourish on the global stage," Vignesh Kumar, Co-Managing Partner of GD1, said.

The management team has indicated there are no immediate plans for a second fund. The current focus remains on supporting existing investments and maximising returns for current investors through the growth and eventual exits of the companies in its portfolio.