Over the last several years, there has been a growing trend in New Zealand to increase academic and research funding by universities themselves taking on venture capital to help develop new commercialization paths for their staff and students.
Commercialization is the process whereby universities encourage their ongoing research programs to take root and blossom into successful startups. These startups have typically developed cutting-edge technologies, as universities possess a major competitive advantage by having some of the best talent pools in the world when it comes to creating the latest scientific research.
The New Zealand Government has long-understood the value of commercialization and created the University Entrepreneurship fund to further enhance the role of local higher-ed in this area. Between 2016 to 2019, the NZ government is pumping NZ$35 million into universities to attract world-leading researchers with entrepreneurial backgrounds. The fund is expected to help bring in 15–20 renowned researchers and their teams to New Zealand.
A notable example of the success around this program is Professor Olaf Diegel. Dr. Diegel is an industry leader in 3D printing technology, and he will now head the UoA’s new Creative Design and Additive Manufacturing Laboratory. Whilst at the university, Dr. Diegel will use his extensive knowledge in AM (Addition Manufacturing), to help develop commercial goods.
The University Entrepreneurship fund is now available on top of the government’s Pre-Seed Accelerator Fund, which invests NZ$8.3 million per year in New Zealand high-tech start-ups. The fund is available to all public research organizations in New Zealand.
However, this is not just a public funding-based program. In 2017, along with eight of the top Australian universities, the University of Auckland signed a ground-breaking agreement with IP Group plc (LSE: IPO). This agreement provides NZ$215 million over 10 years to the nine universities, to create companies involved in disruptive technologies.
“The business model we are using is similar to the model that we have used successfully in the UK and the US, which provides business-building expertise, capital, networks, recruitment and business support,” said Alan Aubrey, CEO of IP Group.. “We believe the model is ideally suited to the Australian and New Zealand markets and represents a significant commercial opportunity for all those involved.”
History suggests that New Zealand does indeed have significant commercial opportunities for startups. Out of the country’s top universities, there have been multiple successful ventures over several decades.
Soul Machines was founded out of the UoA’s Bioengineering Institute by two-time Oscar® winner Dr. Mark Sagar. Soul Machines builds incredibly lifelike and emotionally-responsive artificial humans and it has attracted investments from companies such as Mercedes Benz’s Daimler Financial Services, Horizons Ventures and ICONIQ Capital.
The University of Canterbury’s School of Engineering has successfully spun-out Invert Robotics. Invert manufactures robots that inspect mission-critical assets for cracking or damage and now works for six of the top eight global dairy companies.
The UoA’s engineering department also founded PowerbyProxi, using the school’s extensive research on wireless charging. PowerbyProxi attracted multiple investors such as Samsung® and in 2017 was acquired by Apple® for over NZ$100 million.
With increasing support from the government and overseas investors, along with universities around New Zealand, budding entrepreneurs and academics alike are discovering the incentives of commercializing their studies. Through their efforts, we fully expect to see even more exciting new technologies and businesses coming out of the NZ venture space. No more academic black sheep, only talented researchers now able to access the same VC funds as their business world counterparts to make their dreams a reality.