Joint centre for clean-tech innovation planned in China

Christchurch-based venture capital company, Milestone Capital, is negotiating a joint facility for clean technology innovation in China.

Milestone principal and co-founder of institutional investment management firm, Infiniti Capital, Kenji Steven told NBR the Chengdu government was keen to work with New Zealand to bring clean technology to China, although he was sketchy on the details.

The Chengdu-based Rutherford Innovation Centre may be Milestone principal and Aquaflow Bionomic Corporation founder Nick Gerritsen’s saving grace, after the company - the first in the world to produce bio-fuels from wild, harvested algae - has struggled to raise capital in New Zealand.

Milestone established the Rutherford Innovation Fund in September, with a portfolio of clean-tech companies including Aquaflow, Carbonscape, Celsias, Intercap and VortexDNA.

Milestone Capital advisory board member and author of business book, The Way of the Dragon, Gavin Crombie, is headquartered in Chengdu and Mr Steven said China was a particularly important market for New Zealand’s clean-tech industry because of its free-trade agreement.

“They are very keen to work with New Zealand and there’s opportunity there to do so much more.”

Mr Steven said China was a huge growth market that preferred more cutting edge rather than established technologies. “They have a lot of growth, a lot of people and a lot of pollution.”

He said a company like Aquaflow had clear advantages in China, as it required less capital and provided a more low-cost, natural solution compared with artificially produced bio fuel.

While he said New Zealand investors for the Rutherford fund were emerging, key markets for capital raising were the United States (New York), Europe, Asia Pacific and the Middle East, which was keen to diversify from oil and into the Asia Pacific.

“New Zealanders are just not good at backing themselves.

“We’re talking to a lot of our investors offshore and people see New Zealand as being a really great opportunity. We haven’t had a lot of banking problems, we have a free-trade deal with China and we’re getting some of our companies into China.”

He said Milestone was talking to a number of other clean-tech companies besides those already onboard, which were proven, had clear profitability but needed assistance to go international. “We’d like to be able to see some real results and an ability to commercialise [before we commit].”

The fund was different from other private equity companies, which were typically slow to move, Mr Steven claimed. “What you’ll see from us is quite a different way of doing things – asking, what are the mega trends, what’s driving these clear fundamental changes."

He said the investment structure would allow the fund to move quickly, in response to the market.