250 Startups, $425 Million in revenue, and 880 jobs!
Andy Hamilton, Director of Auckland’s Icehouse
New Zealand is a small isolated country on two islands deep in the South Pacific. New Zealand has a population and economy roughly similar to British Columbia. Australia, its bigger neighbor is 1200 kilometers away. Kiwi’s have therefore always valued self-reliance and resourcefulness. So it was with some amazement that I read of the stunning results achieved by Andy Hamilton and the Icehouse incubator in Auckland. I have had the good fortune to know and work with Andy, visiting the Icehouse as the Director of New Zealand Trade & Enterprise’s Silicon Valley incubator in Redwood City. Andy routinely asked me to stop by when I was in town to deliver a “tough love” talk to the resident companies.
Andy’s results contrast sharply with the results being achieved in other incubators, particularly here in BC. Much is being written and debated here about an incubator glut, massive waste of government money, and most importantly poor quantitative results from incubator companies. For example, when asked how many companies they have helped succeed a local BC accelerator employee could only say: “You really have to define success. I mean for most of these guys our success is just about getting them to realize their ideas are bad.” Really?
Icehouse startups make an impact
250 startups, $425million in revenue and 880 jobs!
These are the highlights of the impact statistics released by Auckland based business growth hub and startup incubator, The Icehouse, this week.
Since starting in 2001, The Icehouse has worked with over 250 startups to help them accelerate their growth. The alumni pool includes some of NZ’s most successful startups such as M-com, PowerbyProxi, eBus as well as many emerging businesses and brands such as DirtyMan, Tomette, LiveLink Connect and Biomatters.
Since 2006, Icehouse startup alumni have generated over $425 million in revenue of which, $302 million has been export income. They have also created over 800 full time equivalent jobs. Over the same period, Icehouse startups have raised over $170million in funding, which includes government grants and seed and angel funding. A staggering $55m of that has come from angel investor network, ICE Angels.
Additionally, Icehouse startup alumni are more than returning the money the government invests in them through The Icehouse. Over the last eight years, they have generated $72 in revenue for every dollar of government funding The Icehouse has received to run its startup programmes. This has more than tripled since 2006 showing the increased contribution startups are having on the NZ economy.
Ken Erskine, Director, Startups The Icehouse & ICE Angels, says these impact statistics are a very positive sign for The Icehouse and its startup alumni as well as NZ startups in general. “It’s exciting to see our startups continue to succeed and contribute to the growth of the NZ economy.”
Erskine believes that the entrepreneurs behind the startups are the key to their success, “In many cases they were just people with ideas when we started working with them. Their drive, skills and passion is what enabled them to turn these ideas into successful businesses that create jobs and add value to our economy.
We are also delighted that we are producing an excellent return for the Government’s investment even without measuring GST, payroll or taxes paid. The original vision of this investment was to create a world-class startup ecosystem and The Icehouse and ICE Angels have been leaders in the development of this.”
A good example of this is Parrot Analytics, a Tech startup that recently graduated from The Icehouse incubator. Having raised over $1million in funding in 2013, lead by ICE Angels and syndicated with Stephen Tindall’s K1W1 and industry partners from the USA, the startup is considered to be one to watch as it moves into international markets. Founder and CEO, Wared Segar, understands very well what level of commitment and drive, as well as support, is required to start a business: “The Icehouse was beyond instrumental in helping Parrot Analytics secure its seed funding round from ICE Angels, which was one of the largest seed rounds raised by any Kiwi startup. The support from the team extended from capital raising advice to hands-on management support, connections and wider introductions to both local and international stakeholders as well as investing themselves. The team was and remains there for us to tap into to help achieve our common goal of building a successful Kiwi technology company.”
Sean Simpson, Board member of The Icehouse and Co-founder of LanzaTech, says that it is important to have committed and skilled entrepreneurs to drive startups. “Every startup has potential, however the transformation from startup to commercial success is never smooth. The drive, enthusiasm, and determination required to overcome obstacles to commercial success is what the entrepreneur brings. Great entrepreneurs are not constrained by the limitations of today, they drive to make success and grow their vision in spite of barriers that stand in the way of others. We have learnt and are focused on helping these entrepreneurs be the best they could possibly be.”
The Icehouse & ICE Angels are looking forward to working with more highly committed entrepreneurs in the future. Erskine says, “We have a number of really promising startups in The Icehouse at the moment. Seven of them are closing rounds with investors right now. And of course our alumni are continuing to grow so we’re expecting more success stories from them as well.”
A key aspect of the startup success has been the funding partnerships which they have created, with ICE Angels and more recently the Global from Day One Seed Fund.
Brian Casey, Chair of ICE Angels commented, “We are delighted to see the progression of The Icehouse in producing promising and fast growing startups. At the ICE Angels we are excited to get alongside fantastic entrepreneurs and their teams, invest in them, help them and be a sounding board for them as they start on their journey into global markets – not only to get a return but to see the benefit to the economy and our country. It is a great time to be a startup entrepreneur.”
For more information about The Icehouse’s Startup Programmes see www.theicehouse.co.nz/startup.
Key Icehouse startup facts
Over the past 8 years The Icehouse has received $5.875m from NZTE, which has been used to fund The Icehouse incubator. Over this period, The Icehouse has helped their startups to:
- raise over $172m in total private sector funding (excluding grants), growing 40% year on year
- create 888 jobs
- realise $425m in aggregated total revenue (growing 32% year on year) of which 71% or $301.51m are export revenues (growing 136% year on year)
For every dollar of government funding The Icehouse receives, the value add to the incubated startups enables them to:
- generate $72 of revenue from the startups. This amount has almost tripled (2.98x) since 2006. Of this, $51 are export revenues, this amount has increased 12.25x since 2006; and
- raise $40 of private sector funding for the startups. This amount has almost tripled (2.89x) since 2006.