Serious Dollars for VC Fund
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NEW ZEALAND -- TMT Ventures, offering cash for new growth businesses in the technology, media and telecommunications sectors in Australasia has commitment for $85 million in venture capital.
Telecom initiated TMT Ventures last year and has since introduced venture capital and technology sector investors including Lucent and Marconi, fund manager AXA, utilities company Rotorua Energy Trust and entrepreneur Stephen Tindall, founder of the Warehouse.
Auckland based Direct Capital and Advent International, a global venture capital giant, jointly manage TMT Ventures. Its executive chairman Ross George says discussions continue with other prospective investors as part of the ongoing programme to raise over $130 million.
Mr George says TMT Ventures has access to many promising new business proposals. "In New Zealand, we are now looking at four specific proposals representing a combined investment of $10 million."
TMT Ventures recently invested $4 million alongside major US venture capitalists in Redfern Integrated Optics, which designs and manufactures high-end optical equipment for communications networks. The total raised in that round was $28 million.
Redfern Integrated Optics is an Australian based manufacturer specialising in the fabrication of silicon based optical waveguide structures for communications devices.
"This is a company that has a rare ability to completely change the cost-structure of optical systems and therefore the underlying price of bandwidth," says Greg Smitherman, a partner in Advent International's Palo Alto, California, office.
Mr George says TMT Ventures expects to make further investments on both sides of the Tasman over the next three months.
Telecom invested $40 million to launch TMT Ventures, a new trans-Tasman seed venture capital fund specialising in telecommunications, media and technology companies. It expects to invest $150 million over the next four years. Investments are expected to range from $500,000 to $10 million with up to $50 million per year committed.
Telecom's general manager of business development, John Bell says TMT Ventures can draw on a large pool of well-informed international venture capitalists who provide a combination of money, business links and partnership opportunities with other American and European investors.
"We have become a catalyst for like-minded corporates and individuals to fund new ventures, some of which will become future leaders in technology, media and telecommunications.
Advent International, with offices in 16 countries has more than $ US 4.5 billion under management and invests in early stage venture capital and private equity opportunities in the and since 1984 has invested in over 500 companies. Redfern Integrated Optics is its latest investment
New Zealand-based Direct Capital Private Equity has made 24 investments totalling $ NZ 140 million, including over $ NZ 60 million in the technology sector. It also manages Carter Holt Harvey Venture capital, a corporate fund that investing in new ventures linked to Carter Holt Harvey's core businesses.