Democratising venture capital: Matū first to IPO on new Catalist platform

Venture capital firm Matū says it is offering retail investors a unique opportunity to buy into the rapidly growing “deep tech” sector – or R&D-heavy companies pioneering new technology.

Its newly-incorporated subsidiary Matū Iramoe is looking to raise $1 million through the new Catalist platform, which offers capital raising options for small-to-medium businesses looking to raise up to $20 million a year.

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The raise is the first IPO on Catalist, founded by Colin Magee – a former conduct supervisor with the Financial Markets Authority.

“We have set the minimum investment really low – $1000 -to make it as accessible as we can,” Matu partner Dr Andrew Chen tells the Herald (if Chen’s name sounds familiar, you might have seen him in his other major role as a University of Auckland research fellow, comment on the Government’s Covid-19 contact tracing efforts – or on the technology front, lack of).

Matū, formed in 2018, has invested in 12 startups through its Matū Karihi fund, including Ligar, which is developing cannabis purification technology, among other “bio-active molecule” initiatives; Mekonos, which is working on cell and gene therapies; and PowerOn, which wants to give robots a sense of touch.

It says its 12 portfolio companies have filed 44 patents, created over 110 new jobs, secured more than $12m in non-dilutive grants, and raised $82 million in new investment capital.

“These companies are addressing some of society’s biggest issues, from the detection and treatment of chronic diseases and improving surgical outcomes, to testing for pathogens attacking Aotearoa New Zealand’s ecosystem,” says Matū Iramoe director Ken Erskine, a veteran of NZ’s tech investment scene.

After the IPO closes on Catalist, Iramoe will then acquire approximately 10 per cent of the units on issue in the underlying Matū Karihi fund, in newly issued units, Chen told the Herald. The post-money valuation of Matū Karihi would be approximately $10m.

So far the raise has not quite caught fire. As of November 23, the Iramoe IPO, which opened on November 15, had $684,231 remaining. Its closing date is November 29.

Magee told the Herald earlier this week, “We’ve had 57 people investing into a venture capital fund that wouldn’t have previously been accessible to them.Some have invested just the minimum $1000 amount and others have invested significantly more.”

The Matū Iramoe IPO is the first since the FMA issued Catalist its licence to run a stock exchange in June. What else is in the pipeline?

“We’re still working with other SMEs to get the next IPO to the market, but we can’t give a timeframe yet – the timing will be based on whatever works best for the individual companies,” Magee said.

But the founder can confirm one upcoming piece of business: Matū Iramoe’s initial offer will be followed by another chance to buy into the fund in March next year after its quarterly revaluation of its portfolio companies.

“Matū Investors will also have regular opportunities to sell their investment in periodic auctions on a licensed stock exchange if they need to, which again is a first for New Zealand venture capital,” Magee said.

A democratised approach to venture capital is not new. Icehouse Ventures and Punakaiki Fund both offer low entry point options as what used to be an arena for relatively high net worth investors broadens its appeal during an era that has also bought us fractional ownership platforms like Sharesies and crowd-funded equity.

But with Matū Iramoe, investors will be able to use Catalist as a platform to trade shares in the venture capital firm (which for the initial offer are $1 each, with a minimum purchase of 1000 and a maximum of 200,000).

It won’t be continuous trading like the NZX, however, but a series of periodic auctions, which could be weekly or monthly – a move that will help concentrate trading activity in what is, to begin with, a very small market.

Catalist also offers a private market service for investors looking to raise money from wholesale investors (it is currently hosting Edmund Hillary Brands’ $2m offer for 21 per cent of the company and a $3m round for Tropical Dairy Group) and a registry service for tracking and management of a portfolio.

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