Flux Demo Day 2018 at Motat Aviation Display Hall (Photo: Supplied)

Into the dragon’s den with New Zealand’s million-dollar investments

Hundreds of New Zealand’s wealthiest investors gathered for the 2018 Flux Demo Day last week for a night of wining, dining, and million-dollar business investments. Jihee Junn went along to watch this year’s plucky startups pitch it out.

“The first rule of investing is: don’t leave the table when the food’s being served!” a jolly looking man at my table exclaimed. We were halfway through the night’s events when platters of braised beef, roast potatoes and Akaroa salmon were brought out to the room’s 400 or so investors. As we dug into our family-style meals, passing along giant plates of food from left to right, I asked some of my fellow diners – all older, wealthier, and a lot more male than me – for their thoughts on the startups that had pitched so far. On the whole, their responses were akin to a placid shrug.

“They were okay,” said one man, who told me his day job was working at a private investment firm. Those sitting next to him nodded in agreement. “I’m not really here to invest tonight, but if I was, there probably hasn’t been anything yet to make me want to get out my wallet.”

Clearly, this was a tough crowd to please, and doing their best to impress these moneyed-up investors were nine Kiwi startups for this year’s Flux Demo Day. Held at MOTAT’s Aviation Display Hall alongside an impressive collection of vintage fighter jets and war planes, Demo Day was a chance for some of the country’s most promising early-stage ventures (companies that have a viable product but aren’t completely ready to go to market) to pitch and raise cash to grow their businesses. This year, Demo Day featured three companies from the Flux Accelerator – a six-month programme run by the Icehouse which invested $100,000 into each startup – and six companies from the wider startup ecosystem. 

Many of the night’s attendees were from the Icehouse’s existing community of investors, like ICE Angels – a leading network of angel investors whose members devote an average of $40,000 into startups per person, per year. Angel investors are different from venture capitalists as they’re usually an individual using their own money rather than a group or business sourcing funds from elsewhere. They’re also more likely to risk investing in brand new firms, compared to VC’s who prefer to invest further down a business’ line. At Demo Day, which was geared towards angel investors, most startups were asking for anywhere between $1 million and $2 million in investment which, one attendee noted, was “really not that much”.

Down the runway during cocktail hour… (Photo: Jihee Junn)

Before the pitches got underway, there was the usual half-hour of polite networking and milling about. The powerful and wealthy chatted over glasses of champagne while groups of Chinese businessmen snapped photos of World War I bombers. Former Green MP Barry Coates was there, as was former National MP Steven Joyce.

Interspersed between the display of vintage planes and politicians was a stall set up for each startup, their founders all busily gesticulating in an attempt to convince potential investors. Some were more stripped back with just a screen and business cards, like smartphone app Thinkladder which wants to make cognitive behavioural therapy accessible from everyone’s pockets (“We’re not trying to replace face-to-face, but be a gateway to therapy instead,” founder Mark Gatt qualified in his pitch later on). Others were a bit louder and more playful, like market insights company Yabble – the only fully female team of the night – with its bright pink signage and cocktail shots.

As the main event prepared to start, we were ushered down the runway towards our tables where the first pitches were set to begin. Barnaby Marshall, managing partner of the Flux Accelerator and co-founder of the sometimes controversial men’s fashion brand I Love Ugly, opened the night by highlighting the three C’s: capital, capability, and connection. “You, the investors out there in the audience, have all three,” he said. “The challenge for you is to make some bets on the future tonight.”

The three C’s of angel investing, apparently (Photo: Jihee Junn)

Hustling for some of these bets were nine plucky startups who each had just 10 minutes of stage time to plead their case. Their pitches were slick, confident, and TED Talk-esque, with many of the teams fronted by startup veterans. Rocos, one of the three Flux Accelerator teams, kicked off the proceedings with co-founder and former CTO of Plexure, David Inggs, explaining how his cloud operating system could make robots (for example, autonomous vacuum cleaners) controllable at scale. Cove and Montoux followed soon after, who both had ambitions to revolutionise the outdated insurance industry in their own unique ways.

FreightFish, which wants to provide a more rapid, cost-efficient way of moving goods over water, was possibly one of the more ambitious ideas to emerge from the night. Not only did it want to create a whole new system for shipping goods, but it also wanted to actually build the ships to cater for the system as well (‘hydrofoiling freighters’ they call them). “Tesla-esque,” one investor noted afterwards. Not surprisingly, FreightFish is led by the co-founder of Halter, an equally ambitious tech company that creates “Cowgirithm” collars for remote control farming.

FreightFish’s ‘hydrofoiling freighters’ (Photo: Supplied)

Once all nine startups had finished their pitches, ICE Angels CEO Robbie Paul jumped up on stage for the final event where he asked the audience to “make some noise and clink some glasses” for the best pitch of the night. While drunkenness and jeering made up a good part of last year’s Demo Day according to one investor, this year seemed to have brought in a tamer, more reserved crowd as each startup was met with just slightly varying degrees of polite clapping. In the end, self-employment management platform Hnry was declared the winner, which may or may not have had something to do with the fact it was the last to present.

But before you knew it, the night was over. With hardly a moment to spare between each pitch (there wasn’t a musical interlude that lasted longer than five seconds), Demo Day 2018 was done before 9pm. Some stuck around to network and visit more stalls, while others headed straight for the exits, keeping their cards (and wallets) close to their chests. After all, in the hard and fast world of investing, time is money and there’s only so much of it.


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