Icehouse Ventures’ annual Showcase has become New Zealand’s most important night for startups. It’s also a strange, enjoyable piece of quasi-pop culture in its own right.
This is not your typical Spark Arena crowd. Suits, tables, median age around 50, catering by Inca’s Nic Watt and wine from Man O’ War and Peregrine which typically retails at $40 and up. Speakers address the room between a pair of Lexus luxury cars and the big screens broadcast arcane frontier science terminology, or infographics showing TAMs (total addressable market, a crucial term for early stage company investors) in the tens or hundreds of billions.
Yet at the same time, there is much that is familiar. There’s a stage running the width of the room, lighting rigs making those pitching gleam, speaker stacks booming with inoffensive contemporary pop songs. There are headliners (Rocket Lab’s Peter Beck and his heir apparent, OpenStar’s Ratu Mataira) who bask in the moment, while for those further down the bill the occasion is freighted with equal parts opportunity and risk. It’s livestreamed for watch parties around the country. Most of all there’s the heady atmosphere familiar with any live show, where reputations are made and lost according to the performance on the night.
Welcome to Icehouse Ventures’ annual showcase, an event from the investment firm which plays like extremely public speed dating, aiming to introduce a 900-strong crowd full of potential investors to 11 early stage New Zealand companies. All the theatre is designed to help create an atmosphere of scarcity, energy and extreme FOMO. The air is thick with tension conjured by entrepreneurs and their staff, who sit at tables alongside the money which could change their lives.
The Shark Tank-ish aspects of it are counterbalanced by frequent appeals to the NZ Inc dream. Beck made an opening speech heavy on autobiography. Parts were trite – he repeated the well-worn line about New Zealand’s entrepreneurs not thinking big enough. Mostly it landed though, as when he showed pictures of him as an Invercargill teen with a jetpack on rollerblades. The point was that he was encouraged to try semi-deranged projects growing up. “What New Zealand needs is dozens of Rocket Labs,” says Beck, which requires a culture that embraces them.
Tonight is part of a whole infrastructure – much of it state-funded, some of dubious value – which aims to create more Xeros, more PushPays, more Rocket Labs. The thesis is that New Zealand’s economy is not a lot more than a housing market, a farming sector and some mature corporations, but to thrive in the modern world it needs to match entrepreneurs with big ideas to investors willing to back them. That’s the why for this annual event, and a conviction so deeply felt by some as to border on religion.
Showcase is put on by Icehouse Ventures, which in turn traces its origins to Ice Angels in 2003 – an eternity in startup years. Ice Angels was a network concerned, as the name implies, with “angel investing”, which is often the first money any aspiring entrepreneur raises. Icehouse Ventures was the network growing up, raising money to fund more advanced businesses, progressing to the point where it has around $380m invested through both its funds and investments it has facilitated. This makes it one of the largest players in the local VC scene. It’s also certainly one of the most visible and public, putting on events like tonight’s which function as marketing for both the firms it works with and the company itself.
Silicon Valley South
It is very easy to make fun of this group, and startup culture more broadly. It has many of the trappings of tech exceptionalism and founder worship skewered so adroitly in HBO’s Silicon Valley. More broadly, society has grown suspicious of young people making outlandish claims, after the very public failings of WeWork and Theranos.
While that’s the international backdrop, New Zealand has its own scene and dynamic. It would be disingenuous to simply caricature it as being made up of credulous investors, boosterish hangers-on and founders allergic to critique. Because some really do make extraordinary businesses happen. As Beck proudly points out, the Mahia peninsula was the fourth-most frequent rocket launch location in the world in 2022, trailing only the US, China and Russia. More companies like Rocket Lab really could have a profound impact on this country.
One of the companies Beck cited was OpenStar, whose founder Mataira followed him onto the stage. He was bespectacled, with skinny jeans and an unstructured blazer, and perhaps the most impressive speaker of the night – likely because he wasn’t really pitching at all. It felt telling that he alone did not ask for any investment – OpenStar appears to have raised all the capital it needs for the time being. He’s trying to solve one of the hardest problems in science – “we’re building a fusion reactor, which is basically the same thing as trying to tame the sun,” he said, with Maui on screen beside him. If he can pull it off, he might end up as famous as Ernest Rutherford, who he referenced from the stage.
In some respects it made Mataira’s appearance a victory lap, an example of what happens and how it looks when everything is really working with a startup. Yet that’s extremely atypical. Most have at least enough doubt to match their dreams, and are almost always looking for investor’s cash.
Hence for all who follow Mataira, the night is about telling their story in such a compelling way that the audience is willing to place big bets on what are inevitably longshots. Those cheques are based partly on the story being told, and evidence laid out, but this format also relies on the charisma of the founders. That’s what makes the event so queasily compelling – that combination of hope and dread which underlies every pitch.
As we entered the venue an hour earlier, the crowd walked through a gauntlet which functioned as a kind of hall of fame for Showcase. There are stars in this scene, including James Hurman, whose company Tracksuit was a breakout of the class of 2022. He was there wearing a white butcher’s jacket with the logo of a new startup which aims to follow in its footsteps. The entrance chute was lined with posters from each of the 13 years it’s been running, typographically laid out like a music festival, with headliners on top and support acts further down. Names like Ethique, Sharesies and Halter have become part of our startup lore. Others sputter along or have outright failed. They’re in much smaller print on the posters.
The names also functioned as a history of trends in tech, with the rise and fall of major trends like VR, machine learning and crypto palpable through the years. Tech’s current obsession, generative AI, was more present as a bolt-on than core technology – almost half the founders made mention of it in their presentations, though none seemed to have it as an initial impetus. That wave will likely come next year.
The year of deep tech
Instead, if there was a through-line in Showcase 2023, it was deep tech – companies founded on advances in hard science research. As many as half of the businesses nestled under that umbrella, with most focussed on decarbonising huge industries.
Neocrete aims to deploy an evolved concrete to reduce global carbon emissions by 1% within a decade. Miruku says it can create dairy proteins from plants: “Why don’t you cut out the cow?” Mushroom Material believes it can replace much of the world’s packaging with a type of fungi, and in so doing replace 30% of the world’s landfill and 90% of marine debris. Still, every year research creates innumerable discoveries which show promise but can never scale. It’s up to the investors to figure out who can actually commercialise their academic papers.
Beyond science, a bundle of companies seem to be broadly in the space of “taking something which already exists and making it better, cheaper or more accessible”. Excellent promises to make your staff more engaged and productive. Ideally aims to make testing concepts cheaper and faster. NextWork wants to make job retraining more exciting than it sounds.
How much you believe in their ability to pull this off frequently comes down to the charisma of the founder. They need to train for moments like this like athletes. “There was a time in my life where that would have scared the shit out of me,” Mataira tells me after his time on stage. “Now I’ve figured out how to find it energising.”
Sometimes the pitch beats the concept. NextWork’s Amber Joseph aimed for the whole job training industry while seeming fixated on the relatively narrow field of cloud computing. Yet Joseph is so bright and compelling that it was easy to overlook that gap. Partly that’s rational – a compelling leader can have a gravity which convinces investors, staff and customers that the ideas they’re selling are as inevitable as the weather. Yet many more startups fail than succeed, a subtext which every investor tests the pitches against.
A diffident pitch can have an outsize impact. Some startups on the night boasted of outstanding successes, but offered a large chunk of their company for a suspiciously low valuation. Others felt bogged down in the weeds of their industry, unable to bring a lay audience with them. One was so halting that an investor I spoke with wondered whether their business would make it to the end of the year.
A very big clique
For all the scale of the room, and the sense of this being a good – maybe the best available – window into the future of New Zealand business, there was also a very in-group atmosphere. This was most evident in a ceremony late in the piece to award something (it wasn’t quite clear what) to Icehouse Ventures staffer Jack McQuire, who started as an intern and is now a partner. The moment had the air of an intimate workplace award, just with hundreds of people watching on, somewhat bemusedly (it was still a cute scene).
For some that clubbiness is a microcosm of the whole New Zealand tech and investment scene, where local and central government agencies like Callaghan Innovation, NZTE and Auckland Unlimited fund and interact with incubators, co-working spaces and mentorship programmes and investment funds. At its worst it can resemble what investor Rowan Simpson calls “startup derivatives”, a kind of pantomime of industry, where everyone knows each other and no one is really playing with their own money.
Yet that honours board of success is a powerful counterargument. It’s undeniable that the New Zealand startup scene’s winners – Xero, Trade Me, PushPay, Rocketlab and more – represent the most dynamic part of this country’s business sector. Icehouse Ventures CEO Robbie Paul typifies the almost evangelical feel of the true believers. He made an engaging speech, acknowledging that of those who had pitched from this stage in years gone by, 22 of those firms are no longer operating. That money might be gone, but not his confidence.
“While it is risky to try and change the world, it needs to be done,” said Paul. “Kiwis have always been innovators, now the family tree of New Zealand innovation is growing faster all the time.” Ultimately, he proved persuasive. While the startup scene remains too thin-skinned and high on its own supply, it is also in motion like no other part of New Zealand.
For proof, look at the demography. Of those who spoke from the stage, most were under 40, around half were women, and the most feted founder is proudly Māori. When set against a still foot-dragging performance from corporate New Zealand, the startup space appears to meaningfully respond to signals far more swiftly. So tonight, for all its excess, impressed with its ambition and fundamentally progressive nature. It also was an unconventional entertainment which keeps its tables full year after year. Exactly as a big Spark arena show should.