Drawing on his science education, tech career, an extensive US network, and long-time connection with New Zealand, Dr Mark Bregman of Quidnet Ventures campions science-based Kiwi startups demonstrating a “terroir” of innovation.
Established in Auckland in 2021, and operating also out of San Francisco and New York City, Quidnet Ventures offers operational guidance – along with seed-stage and Series A funding – to Kiwi entrepreneurs who are ready to take innovations in science-based deep tech to the global market.
Quidnet’s founder and general partner, Dr Mark Bregman, leads a team of advisors with collective executive work experience in Europe, China, Japan and India, as well as New Zealand. Bregman explains how his personal journey – from tech executive in his US homeland to corporate venture professional and hobbyist winemaker in his adoptive New Zealand – has given him the mind-set and expertise to help startups navigate early growth stages and make crucial connections, particularly with the US.
The science of innovation
Bregman’s interest in science-based tech was piqued in the 1980s during a post-doctoral fellowship in neutrino physics at IBM Research. Rubbing shoulders with visionaries such as Benoit Mandelbrot (the inventor of fractals) and Robert Dennard (the inventor of the single transistor DRAM), Bregman saw the “interesting and challenging areas people were working in that people cared about”. At the end of his post-doc, he decided to stay at IBM, moving into the microelectronics research division.
The connection between academic research and commercially viable deep tech became a theme throughout his corporate career, as he studied and led innovation inside established corporates, such as IBM, and within the startup ecosystem.
Visiting New Zealand regularly for IBM meetings with clients such as BNZ and Telecom, Bregman forged strong links with the country, in part through his interests in yachting and viticulture (he bought into a vineyard in the 1990s). “I became more plugged into the tech startup ecosystem here,” he explains. “Back then, it was in its formative days, but it was clearly growing rapidly.”
He also saw how limited capital there was in the seed and Series A venture range, “so Kiwi companies had to look offshore to grow.”
Marrying big corporate knowhow with fast-growth startups and funding
After leaving IBM, Bregman worked at various enterprise software companies and start-ups – including VERITAS Software, Symantec and NetApp – before joining Vista Equity Partners in 2019. At Vista, he helped portfolio companies leverage innovation in the early fast-growth stage. He also led corporate venture programmes at Symantec, Neustar and NetApp, and co-founded an AI/ML startup, helping the publishing industry match readers to content.
His ongoing connections with New Zealand eventually attracted him to pursue residency, and Quidnet Ventures was born from his fascination with place-based innovation and the exciting stage of the technology sector here. “There’s that maturing and vibrancy of the entrepreneurial technology ecosystem happening right now, which can lead to a real impact on jobs and economic growth.”
New Zealand’s “terroir” of innovation
For Bregman, one of the key attractions of Kiwi innovation has been that famous No. 8 wire thinking. He uses the viticulture term “terroir”, defined as the blend of factors – the soil, climate, terrain and human input – that shape the unique qualities of a wine.
As he sees it, New Zealand’s geographic isolation has bred a terroir of ingenuity and invention. And, with such a small home market, “Kiwis have had to think globally from day one. Many are motivated by making an impact first, money second. And this leads to better ideas – defensible ideas.”
He believes New Zealand punches above its weight in certain tech sectors. “The overarching goal in launching the fund is to accelerate the growth of a vibrant entrepreneurial technology ecosystem.” He lists Quidnet’s areas of special interest: deep-tech companies in New Zealand that operate in agtech, AI/ML and medtech, all of which are based in scientific, defensible intellectual capital. “We look to the ones where we can provide the leverage and specialist knowledge, and create the most traction in the US.”
Investment strategy
Two criteria in particular guide Quidnet’s investment strategy. “First, I ask, how does this company benefit from being in New Zealand? Second, do they work with science-based deep tech? Ideas need to be defensible and not easily copied, and this is the area in which I’m best positioned to help.”
That help comes in the form of operational guidance, as much as funding. Bregman is keen to avoid the general situation in the US, where, he says, too much money floods in too early on from financial investors who offer little advice on how to use the cash.
“We are hands-on, providing operational advice to give founders a clear road map as they launch in the US. We have advisors in deep tech, growth, sales and marketing, and through our networks we can introduce founders to the support they need.”
The process of getting to know a potential investee can take a long time – several years, in some instances. Bregman pitches this as an advantage to investees. “We take the time to help with connections and introductions, and a stateside perspective. With our deep knowledge of US norms, we can ensure the cap table is clean and attractive for US investors. We can introduce investees to legal and IP experts, distribution channel specialists, venture capital funds, and more. But first we determine where a company is at, and its priorities, before giving advice.”
A science-based deep tech portfolio
Quidnet has made 10 investments in its first year and is on track to support more than 30 companies from its first fund. Among these are:
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Litmaps, which has built a research platform that is revolutionising the use of peer-reviewed and patent literatures for scientists, engineers and other experts,
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Winely, which develops real-time fermentation analysis that, via the IoT, gives greater control to vintners,
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Arcanum, a feature-as-a-service platform offering enterprise AI solutions: products and platforms for machine learning, machine vision and neuro-linguistic programming, and
Another is PowerON, which aims to turn robotics from ‘clunky and dangerous’, in the words of CTO Dr Katherine Wilson, to soft multifunctional robots “that can interact with us and help us in daily life.” Potential applications include prosthetic limbs, lifelike medical models, and assistants for patients.
Launched in 2019, and based in Auckland and Dresden (a European centre for robotics), PowerON is a spinoff from the Biomimetics Lab at the Auckland Bioengineering Institute. It had early support and funding from Callaghan Innovation R&D (with assistance from Auckland Unlimited). In September 2021, PowerON closed an oversubscribed $3.1 million capital raise which included funding and support from Quidnet Ventures.
“We were anticipating going overseas for early-stage investments,” says CTO Katie Wilson, “but were pleasantly surprised by the increasing number of venture funds operating in New Zealand supporting deep tech start-ups. We successfully raised pre-seed and seed funding from within New Zealand, with support from multiple groups including Quidnet Ventures. We are very encouraged by the confidence that the New Zealand investment community has shown in our team and vision for the technology.”
Working within the Kiwi tech ecosystem
Bregman is an Investor Fellow at the Edmund Hillary Fellowship. Working remotely from the US until borders reopen, he is helping New Zealand investees build links with the US (including Kiwi expats there); Quidnet has assisted with physical trips to San Francisco, as well as the AANZ/EHF virtual visit in 2021.
His Edmund Hillary Fellowship also enables Bregman to pursue his goal of fostering nationwide tech excellence. “I’m of the opinion that Kiwi tech entrepreneurs should find ways to collaborate, get together, and build the fabric and network around innovation – rather than competing with each other – for collective success internationally.”
Bregman mentors founders at the innovation spaces Te Ōhaka (Christchurch) and CreativeHQ (Wellington), and is on the Digital Technologies Investment committee for Return on Science – New Zealand’s national research commercialisation programme, which often meets at the University of Auckland’s UniServices.
Matching the right investors for long-term relationships
Quidnet strategically selects offshore limited partners, and all LPs typically have some link to New Zealand to help foster a connection with investees. These relationships are important for investors during the competitive second round of funding, as it gives them priority access based on existing relationships with founders and startups.
“The advantage for investors (and investees) is that New Zealand companies are not overvalued like they are in the US. In the early stages, a lower valuation benefits everyone and fuels innovation; when founders maintain a significant shareholding, the drive and incentive to succeed are even stronger.
“I believe the combination of ambitious Kiwi entrepreneurs – the creative, resourceful, pioneering mentality of being far away, yet well-connected – and their global mindset is creating an innovation nation,” concludes Bregman, “making New Zealand a really compelling place to be investing into right now.”
Find out more
Contact Investment Specialist Joe Rouse to learn more about venture capital investment opportunities in Auckland, New Zealand.
Source: https://www.aucklandnz.com/
