Waikato gains $40 million venture fund


Waikato tech entrepreneurs have a significant new fund to pitch to, with the arrival of venture fund founder Rob Vickery in the region.

A “maelstrom of stimulation” brought Vickery to the Waikato when he decided to leave the fast lane of Los Angeles for New Zealand.

Vickery set up $40 million venture capital fund Hillfarrance, headquartered in Hamilton, a year ago.

Named after his home village in Somerset, UK, it is currently funding four startups after Vickery returned to New Zealand in September from a six-month stint in Los Angeles.

Waikato partly appealed because some of his biggest investors are based in Raglan, Vickery says, and that became the destination for one of the first trips he took.

“I drove through the region, I thought bloody hell, this is beautiful,” he says. “It reminds me a lot of where I come from – the West Country of England which at a cursory glance looks pretty similar. If you strip out the native bush, you’re there. There is a very strong kind of bond that I have with that.”

He appointed Hamilton’s Tompkins Wake as his law firm, and “started to build this organic connection with the region”.

With Hamilton-based Company-X an early investor, Vickery met Labour Government MP Jamie Strange to learn more about the political landscape, and says he began to see how important tech was to people in the region.

From his time in Los Angeles, with higher learning institutes including Caltech, USC and UCLA, he knew the value of having access to bright young people “doing really cool things”, and could see Waikato University playing the same role through its graduates.

Vickery also noted the corporates operating in the area, like Fonterra and Tetrapak, injecting talent into the region.

“There’s a whole bunch of things happening,” he says. “It’s that perfect maelstrom of stimulation.” 

And finally, he says, there are no real venture capital funds in the region. “Auckland is dominated by lots of them. And they’re all kind of squabbling over the same old stuff. And I figured, well, why would I be amongst everybody else?”

Having come from “the most competitive market in the world for startups”, Vickery lauds New Zealand for the ability to test and trial new technology more easily than elsewhere in the world, with a market of 5 million people and plenty of open space.

And the pandemic may be having an impact. “I’m seeing a lot of founders coming to present to me who have just returned from being overseas for 10 years, really bright, unique individuals who’ve lived in 10 years in San Francisco and now are thinking, I’m going to come and do it here instead.”

Further differences between the two markets are reflected in the presentations he sees from founders. Sometimes, he says, there’s not a lot of tangibility in what a US founder will present. “There’s nothing wrong with that. That’s fine. And in fact, Americans are wildly investable because they have the courage to go out there and do anything they want, right?

“Kiwi founders often come to the table with something that works already. And that makes my job a lot easier, a lot more enjoyable.”

The “dream”, he says, is to build a billion dollar business in New Zealand that stays in New Zealand and raises from New Zealand.

When it comes to points of difference with other funds in New Zealand, Vickery says his is the only fund outside England, and the second in the world, to share 20 percent of profits with founders.

That can happen when a Hillfarrance portfolio company “exits” by selling to a corporate – such exits can bring a multi-million dollar return, 20 percent of which goes to Hillfarrance. At that point, Hillfarrance will redistribute 20 percent of its take to the founders it invests in. It is, Vickery says, about whānau – about the idea of families sharing. “That means that all of our portfolio companies, the founders of those startups, are all actually invested into each other,” he says. “And that makes collaboration just so natural and exciting.”

Vickery is keen to invest in Māori businesses, which includes two of the first four in the Hillfarrance portfolio – Kwotimation and social enterprise Konei.

He is also a partner at Kōkiri, an accelerator programme at Te Whare Wānanga o Aotearoa.

“I feel like I can’t be a New Zealand fund if I don’t serve its indigenous people. That’s just common
sense to me.”

He also says Māori are a community of entrepreneurs with endless potential who are often overlooked by existing sources of capital.

“I challenge anybody to show me a nation of people that can tell a compelling and thoughtful story better than the Māori nation.”

Vickery, having earlier built a venture capital firm in the US, is bringing a network of relationships, and investors not only come from New Zealand but include entrepreneurs worldwide.

“Company-X has come in as one of our investors, which we’re extremely grateful for. And for me, getting Kiwi New Zealand investors is the ultimate sign of market validation,” he says.

“But beyond that, one thing I like to do with all our investors is activate them for our portfolio. So the coolest thing about Company-X is that they can help me and our portfolio company founders with building better products, writing cleaner code, being more audacious in the product that they build.”

That will see Kwotimation using Company-X to build an augmented reality tool, bringing the company to market quicker. Company-X cofounder Jeremy Hughes says the Hillfarrance involvement will help boost their support for startups.  “Getting in at this early stage with these companies gets us the ability to set them off on a really good foundation right from the start.”

He also makes the point that the fund offers more than just money, with a community of Waikato businesses involved to support startups, covering everything from coding to legal support and marketing.

“I think it’s brilliant that he’s brought together this whole community to help founders right from
the start.”


About Author