Snowball Effect is a marketplace that simplifies access to a range of alternative investment opportunities, bringing together investors and promising companies seeking funding. Our target market is the growth sector – typically businesses with several million dollars in revenue, and seeking anywhere from $1m—$10m in capital to fund growth.
For the size of it’s the economy, the New Zealand startup ecosystem has delivered a high number of highly successful global companies in recent years such as Xero (ASX listed ~$6b market cap), Pushpay (NZX listed $916m market cap), A2 Milk (dual listed $9.3b market cap), Ice Breaker (sold for $288m), and PowerbyProxi (sold for over $100m). However, because of its scale, the New Zealand public capital markets remain shallow and underdeveloped compared to other OECD markets. For example, in 2017, New Zealand's stock market capitalisation to GDP ratio was 46%1, versus Australia at 114%2. This has resulted in New Zealand having a disproportionate amount of private companies versus those publically available on the NZX for investment. Over 97% of New Zealand businesses are deemed SMEs, generating just over 25% of economic growth3. However, access to growth capital for these companies and investment opportunities in these types of companies for investors has been lacking, particularly at the earlier company stages.
Australian investment now makes up over 50% of the Private Equity Funds operating in New Zealand, with the local angel and growth-stage sectors also receiving increased interest and investment from Australian investment groups. In early 2019, we have already seen Australian Funds lead rounds into Kiwi companies Kami & FaceMe. We believe there are similarly solid opportunities in the portion of the market that Snowball Effect targets. From the next, quality food & beverage play, to exciting next-gen clean transportation and innovative enterprise software, Snowball Effect has provided great private investment opportunities that could benefit from additional Australian capital and expertise to help them grow in international markets.
For Aussie investors, it is an untapped pool of potential deal flow, offered in a simple and business-friendly legal and regulatory environment, with a focus on investor protections, independent governance and quality offer information all key parts of Snowball’s vetting process.
Snowball Effect wants to provide eligible Australian investors with an easy way of discovering New Zealand private companies seeking investment from high-net-worth individuals, venture capital funds, and family offices all without a 4-hour flight.
1 Reserve Bank of New Zealand, “A primer on New Zealand markets” – Link
2 theglobaleconomy.com – Australia: Stock market capitalization, percent of GDP - Link
3 MBIE Small Business Development Group Report 2016 - Link
