Punakaiki reboots as private fund with four investments

Punakaiki Fund has rebooted as a private fund, and made investments in four local tech companies.

The fund is managed by Lance Wiggs Capital Management (66.67% owned by Mr Wiggs, the balance by Chris Humphreys).

Last year, Messrs Wiggs and Humphrey's founded Punakaiki with the aim of making long term investments in early-stage companies. They tried and failed to raise $20 million to $50 million in accordance with the FMA's public offering rules.

The new "streamlined" Punakaiki raised capital from private investors earlier this year. South Canterbury Finance alumnus Sandy Maier, a director of the fund last year, is now out of the picture.

Vibe Communications
The fund said Friday it had taken a 20% stake in Vibe Communications, a small telecommnications company that specialises in the wholesale and corporate market (if the name sounds familiar, the otherwise low-profile Vibe was recently in NBR's pages over a dispute with Xero).

Terms of the Vibe deal were not disclosed, and neither party would comment on the telco's profit/loss or revenue numbers.

Vibe co-owner Barry Murphy tells NBR the company sells bandwidth to a number of ISPs. It has around 40 wholesale customers, which account for around 60% of its business.

Mr Wiggs will join Mr Murphy and Davey Goode on Vibe's board.

Vibe’s network has additional points of presence in both Australia and the USA. It purchases capacity off Southern Cross Cable Networks making them one of five major NZ transit providers.

Mr Goode, who is also Vibe's CTO and sales director, says, “We first met Lance and Chris when they were with Pacific Fibre.  They are amongst the few business people who really understand our business. We are moving fast and it’s great to have their experience and investment to ensure we continue to keep a solid balance sheet and financial discipline as we grow.”

Vibe Communications grew over 70% in the last year, after 100% growth the year before.

Mr Wiggs believes the company has many years of high growth ahead .

“Vibe has a great market niche delivering tailored solutions to corporates and other ISPs.  They are over-delivering with the quality of their product," he says.

“Davey, Barry and lead architect Callum Barr are all technically very strong, with Vibe employing more engineers than support staff to retain the quality of their products and service.” [UPDATE: in November, Vibe announced it was launching an alternative internet peering exchange in Auckland].

Mindscape
Punakaiki has also taken a 5% stake in Mindscape, which makes tools for software developers (Mindscape's $1.4 million funding round also included entrepreneur and commentor Ben Kepes and Woodward Partners co-founder Nick Lewis, and departing Trade Me exec Mike "MOD" O'Donnell).

Asked what attracted him to Mindscape, Wiggs cites its "Solid leadership and team, history of delivering highly regarded developer tools, and now a breakout success with Raygun.io" (a tool that helps software developers test their product).

InfluxHQ
And a third inivestment has seen the fund take 18% of InfluxHQ, described as  "a beautiful app for running CrossFit gyms." 

"This is a much earlier stage but addressing a fast growing market, and Scott Mayo, the founder, was developing software for Les Mills International — leading it at the end — for about 10 years, so really knows the space," Mr Wiggs tells NBR.

Timely
This morning a fourth investment was announced: Punakaiki has joined David and Nicki Wilson in a $1.3 million funding round for booking software-as-a-service startup Timely. They join Vend chairman and Southgate Labs founder Rowan Simpson, the first investor. The Wilson Family and Mr Simpson were early investors in software-as-a-service companies Xero and Vend (a point-of-sale-software company now worth north of $100 million). Mr Wiggs is also a Vend investor.

Timely CEO Ryan Baker says the funding will enable Timely to employ more staff and grow its sales and marketing, support, and technical teams. The company currently employs ten people in New Zealand and two in the UK.

What's next?
"We have appetite to make a lot more investments, but are out of funds for now," Mr Wiggs says.

"The four companies [we've invested in so far] are all high growth, long term investments and we've been delighted with the progress we've already seen over the last few months.

"We are contemplating using either private or public approaches to raising money in the future, but erring towards the first for now." 

ckeall@nbr.co.nz

Follow @ChrisKeall