New Zealand’s Icehouse Startups Achieve Impressive Results

 

250 Startups, $425 Million in revenue, and 880 jobs!

 

 Andy Hamilton, Director of Auckland’s Icehouse

New Zealand is a small isolated country on two islands deep in the South Pacific.  New Zealand has a population and economy roughly similar to British Columbia.  Australia, its bigger neighbor is 1200 kilometers away. Kiwi’s have therefore always valued self-reliance and resourcefulness.  So it was with some amazement that I read of the stunning results achieved by Andy Hamilton and the Icehouse incubator in Auckland.  I have had the good fortune to know and work with Andy, visiting the Icehouse as the Director of New Zealand Trade & Enterprise’s Silicon Valley incubator in Redwood City.  Andy routinely asked me to stop by when I was in town to deliver a “tough love” talk to the resident companies. 

Andy’s results contrast sharply with the results being achieved in other incubators, particularly here in BC. Much is being written and debated here about an incubator glut, massive waste of government money, and most importantly poor quantitative results from incubator companies.  For example, when asked how many companies they have helped succeed a local BC accelerator employee could only say: “You really have to define success. I mean for most of these guys our success is just about getting them to realize their ideas are bad.”  Really?

Icehouse startups make an impact

Read more: The Icehouse, Auckland, New Zealand

By The Icehouse

250 startups, $425million in revenue and 880 jobs!

These are the highlights of the impact statistics released by Auckland based business growth hub and startup incubator, The Icehouse, this week.

Since starting in 2001, The Icehouse has worked with over 250 startups to help them accelerate their growth. The alumni pool includes some of NZ’s most successful startups such as M-com, PowerbyProxi, eBus as well as many emerging businesses and brands such as DirtyMan, Tomette, LiveLink Connect and Biomatters.

Since 2006, Icehouse startup alumni have generated over $425 million in revenue of which, $302 million has been export income. They have also created over 800 full time equivalent jobs. Over the same period, Icehouse startups have raised over $170million in funding, which includes government grants and seed and angel funding. A staggering $55m of that has come from angel investor network, ICE Angels.

Additionally, Icehouse startup alumni are more than returning the money the government invests in them through The Icehouse. Over the last eight years, they have generated $72 in revenue for every dollar of government funding The Icehouse has received to run its startup programmes. This has more than tripled since 2006 showing the increased contribution startups are having on the NZ economy.

Ken Erskine, Director, Startups The Icehouse & ICE Angels, says these impact statistics are a very positive sign for The Icehouse and its startup alumni as well as NZ startups in general. “It’s exciting to see our startups continue to succeed and contribute to the growth of the NZ economy.”

Erskine believes that the entrepreneurs behind the startups are the key to their success, “In many cases they were just people with ideas when we started working with them. Their drive, skills and passion is what enabled them to turn these ideas into successful businesses that create jobs and add value to our economy.

We are also delighted that we are producing an excellent return for the Government’s investment even without measuring GST, payroll or taxes paid. The original vision of this investment was to create a world-class startup ecosystem and The Icehouse and ICE Angels have been leaders in the development of this.”

A good example of this is Parrot Analytics, a Tech startup that recently graduated from The Icehouse incubator. Having raised over $1million in funding in 2013, lead by ICE Angels and syndicated with Stephen Tindall’s K1W1 and industry partners from the USA, the startup is considered to be one to watch as it moves into international markets. Founder and CEO, Wared Segar, understands very well what level of commitment and drive, as well as support, is required to start a business: “The Icehouse was beyond instrumental in helping Parrot Analytics secure its seed funding round from ICE Angels, which was one of the largest seed rounds raised by any Kiwi startup. The support from the team extended from capital raising advice to hands-on management support, connections and wider introductions to both local and international stakeholders as well as investing themselves. The team was and remains there for us to tap into to help achieve our common goal of building a successful Kiwi technology company.”

Sean Simpson, Board member of The Icehouse and Co-founder of LanzaTech, says that it is important to have committed and skilled entrepreneurs to drive startups. “Every startup has potential, however the transformation from startup to commercial success is never smooth. The drive, enthusiasm, and determination required to overcome obstacles to commercial success is what the entrepreneur brings. Great entrepreneurs are not constrained by the limitations of today, they drive to make success and grow their vision in spite of barriers that stand in the way of others. We have learnt and are focused on helping these entrepreneurs be the best they could possibly be.”

The Icehouse & ICE Angels are looking forward to working with more highly committed entrepreneurs in the future. Erskine says, “We have a number of really promising startups in The Icehouse at the moment. Seven of them are closing rounds with investors right now. And of course our alumni are continuing to grow so we’re expecting more success stories from them as well.”

A key aspect of the startup success has been the funding partnerships which they have created, with ICE Angels and more recently the Global from Day One Seed Fund.

Brian Casey, Chair of ICE Angels commented, “We are delighted to see the progression of The Icehouse in producing promising and fast growing startups. At the ICE Angels we are excited to get alongside fantastic entrepreneurs and their teams, invest in them, help them and be a sounding board for them as they start on their journey into global markets – not only to get a return but to see the benefit to the economy and our country. It is a great time to be a startup entrepreneur.”

For more information about The Icehouse’s Startup Programmes see www.theicehouse.co.nz/startup.

Key Icehouse startup facts

Over the past 8 years The Icehouse has received $5.875m from NZTE, which has been used to fund The Icehouse incubator. Over this period, The Icehouse has helped their startups to:

• raise over $172m in total private sector funding (excluding grants), growing 40% year on year
• create 888 jobs
• realise $425m in aggregated total revenue (growing 32% year on year) of which 71% or $301.51m are export revenues (growing 136% year on year)

For every dollar of government funding The Icehouse receives, the value add to the incubated startups enables them to:

• generate $72 of revenue from the startups. This amount has almost tripled (2.98x) since 2006. Of this, $51 are export revenues, this amount has increased 12.25x since 2006; and
• raise $40 of private sector funding for the startups. This amount has almost tripled (2.89x) since 2006.

e@UBC spins ideas of researchers and students into the real-world

READ MORE: e@UBC spins ideas of researchers and students into real-world.

Konrad Walus’s business sounds almost too futuristic — three-dimensional printing of human tissues for use in research or therapeutics.

Since last fall, however, Walus and his partners have run Aspect Biosystems Ltd. through the Entrepreneurship at UBC program, taking an idea from their research labs to incorporation, formation of a viable business plan and on to discussions with a potential first customer.

“Aspect Biosystems could not have started in a garage,” Walus said. The scientists behind it needed the testing equipment and imaging machines that go along with the infrastructure of a major research university like the University of B.C.

And, with a new focus on innovation, UBC has a strong interest in spinning the ideas of its researchers and students (Walus is an associate professor in UBC’s electrical and engineering department) out into real-world applications.

This is where Entrepreneurship at UBC, which uses the hip acronym e@UBC, comes in.

e@UBC and $550-million worth of ideas

“The whole goal is to get all of this knowledge, both with individuals and with science, out to build great companies in B.C. and out to change the world,” said Andy Talbot, e@UBC’s executive director.

UBC revamped and relaunched the two-year-old program in September, capitalizing on a $200,000 injection from the B.C. Innovation Council that is being used to support e@UBC’s mentorship program.

The process starts with a meeting where the student or researcher with the idea and staff at e@UBC figure out what they need.

Talbot said if the proponent just needs a bit of one-one-one coaching to help with an idea, e@UBC will match them with a mentor. If the idea is still “just for fun,” their staff might direct them to one of the regular workshops or “start-up weekend” events that the program regularly hosts.

“If they have an idea that’s useful for an accelerator program, we put them into an accelerator program” and on the path to creating a new company, Talbot said.

And with some $550 million worth of research going on at UBC in a given year, Talbot said, the university has a lot of raw material to work with to form new companies.

“Our goal is that there is another Google, there is another Apple out there and they’re coming from the scientists and technology (at UBC),” he added.

Enter the accelerator

Talbot said 100 ideas — brought in by individuals or groups — have entered the e@UBC process since it re-launch in September, and so far 10 have made it through the accelerator, a sort of entrepreneurial boot-camp, to incorporate as a new company. Aspect Biosystems is one of them.

“It’s an eight-week program where we try to get people from an idea to a validated business model,” he said.

Primarily, that means getting researchers out of their labs and into the market to meet as many potential customers as possible.

Validation of a business plan determines that “yes, someone cares about (the idea) and would buy it. Then we can form a company from that,” Talbot said.

Walus credits the accelerator with steering Aspect away from the wrong direction and putting them on a more viable path.

“When we thought about commercializing, we thought about making a (3D) printing system, adding a whole bunch of features to it and hoping someone would buy it,” Walus said. “The program changed our thinking about it.”

Aspect Biosystems’ process is to engineer biological tissues that mimic human cellular structures, and print them out using 3D printing technology.

In going to potential buyers to ask them what they wanted, Walus said they “worked from the customer back to the technology,” rather than the other way around. “That’s been extremely valuable.”

Beyond boot camp

After completing the boot camp, Walus said, Aspect’s founders have continued using mentoring from Talbot to nurture their business.

Once a business is off the ground, UBC’s Industry Liaison Office can step in to help if it needs to acquire intellectual property rights, or e@UBC can find them space and support services.

The organization even has benefactors who can invest seed funding, $150,000 to $200,000, which a new business can leverage to earn grant funding or to attract other angel investors.

The reality

Walus said the initial application for Aspect’s technology will be in drug discovery, creating computer-programmed human tissues that are better models for testing new therapeutics than traditional early testing methods.

“It’s quite possible, stemming from this, there will be whole classes of new therapeutics,” he added, noting that they are in late-stage discussions with their first customer, a big pharmaceutical firm.

Down the road, Walus said, the goal is to create tissues that could be used as patches in wound healing. Eventually, the technology could be used to print organs for transplant, but Walus said there are a lot of challenges between now and then.

“It’s a 15-20 year vision before we’d have, let’s say, ‘off the shelf organs,’” he said.

Read more: http://www.vancouversun.com/business/technology/Entrepreneurship+spins+ideas+researchers+students/9490766/story.html#ixzz2t3naIs1F