VC fund breaks $10m mark

Venture Capital firm IT Capital has raised more than $7.75 million from financial institutions in New Zealand and Australia, boosting its investment funds to about $10 million

Venture Capital firm IT Capital has raised more than $7.75 million from financial institutions in New Zealand and Australia, boosting its investment funds to about $10 million.

The firm is the region's first publicly listed venture capitalist in business to business e-commerce, says Keith Phillips, IT Capital's managing director.

"This substantial vote of confidence by major financial institutions is a milestone for our company," says Phillips. "For the first time key Australasian investors have demonstrated on mass that business to business e-commerce will deliver substantial long-term returns."

This development is in keeping with the company's expansion plans and its recently developed overall strategy.

Phillips says: "We have been moving very quickly to not only develop our strategy, but to present that case to the institutions and get their support.

"What interests me about IT Capital, as a vehicle to make a lot of things happen in the knowledge economy space, is the network that presented itself. This has been largely through my partner Jeff Dittus, who resides in Philadelphia in a cluster of venture capital organisations."

Dittus has worked with Don Caldwell — who is on IT Capital's advisory board and ran Safeguard Scientific for se-ven years. Caldwell has started a venture fund — Cross Atlantic — through which he identifies technology companies in Ireland and the UK to take to the US. Dittus, in working with Caldwell, identified the same opportunities here.

"Along with that have been entries into Safeguard Scientific, and from that network we've ascertained the trends and defined our own direction," says Phillips.

"We find US venture capital and companies that are in strong long-term trends and match them with local companies and capital, to kickstart the industry here. We also focus on technologies where we would enhance their value through leveraging that network, ie technologies that have been found here and are of interest to already identified partners," he says.

A total of 80% of the company's investments will be in the e-commerce business-to-business space. "That is where the long-term real value and growth is going to be, where you are delivering real cost savings to actual businesses today."

Announcements will soon reveal the company extending its networks into Silicone Valley and Singapore, he says.

Philipps stresses that New Zealand must embrace "e-commerce — the business-to-business side of things — in a big way".

The biggest problem here, he says, "is boards of directors who are non-information age people trying to lead their companies into the information age".

IT Capital provides both early stage funding and management expertise that are not readily available in local markets.

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