NZ cleantech start-ups to take on the world

Friday 6 Aug 2021

New Zealand’s clean tech innovators are struggling to compete with their foreign counterparts because they are not able to attract the same level of investment, report from Callaghan Innovation says. As a result, many do not survive long enough to attract crucial late-stage funding to take their products to market.

The Callaghan Innovation report, New Zealand Climate Tech for the World, says research shows companies working at solving pressing environmental problems are under-financed compared to other small advanced economies. This translated to six times less investment than Finland, 55 times less than Sweden, 22 times less than Israel, 18 times less than Denmark and 12 times less than Ireland.

Kiwi clean tech businesses were also not surviving long enough to access the late-stage financing necessary to grow, or were not perceived by investors to have sufficient potential to grow. A cross-government partnership has been formed to turn that around and make New Zealand into a centre of global clean tech excellence.

A key recommendation of the report was to increase collaboration among government organisations to increase investment in clean tech. Another working with multinational corporations to help grow businesses. New Zealand’s lack of multinationals contributed to fewer funding opportunities.

Callaghan Innovation clean tech spokesman James Muir said new technologies would help the country reach its carbon targets and would help to build a high value export sector, while also creating jobs. To do this, more investment was needed to commercialise some of the technology coming through. The partnership would develop a five-year roadmap to attract investment, strengthen local and global networks, scoping new initiatives and develop clusters of clean tech businesses.

Turning innovative technologies into a commercial proposition was not easy, Muir said. “The report reveals that innovators are raising 95 per cent less investment than other comparable small advanced economies.”

This despite a recent review of the country’s clean tech businesses showing there were up to 300 businesses working on technologies, applications, alternatives to plastic, new energy sources and industrial waste processing.

Futurity Bioventures chief technology officer, Gaetano Dedual said the company was founded three years ago with seed capital from Callahan and Trust Tairāwhiti. “That has got us to the point now where we have a strong proposition,” Dedual said.

The startup was in the middle of a second capital raising to fund an 18-month large-scale market validation project, with the hope of de-risking the technology enough to attract finance for full commercialisation. The company takes low-value forestry offcuts and turns them into high-value replacements for petrochemicals that are used in everyday products, such as polyurethane.

“We recognised that there was a huge opportunity in New Zealand to add value to our forestry resource through the production of bio-based chemicals and materials from pine wood. “That really came from a realisation that the world is transitioning away from oil to lower impact sources of chemicals. The wood feedstock is a great way to unlock these chemicals and they don’t get a lot of recognition,” he said.

While Futurity had been well-supported to date, it lacked the funding to scale up the technology. Eventually, the plan was to build a NZ$150m biorefinery in Gisborne. Futurity was looking for investors who supported its goals. The idea was to keep as much of any future profit in New Zealand.

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Source: Stuff

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