Rocket Lab Backer Outset Secures $25M for NZ Deep Tech Ventures
▼ Summary
– Outset Ventures closed its second fund at $41.5 million NZD to support New Zealand startups focused on hard science and engineering breakthroughs, particularly in energy generation and storage.
– The firm believes New Zealand can address downstream energy and infrastructure challenges posed by AI, with startups like OpenStar (nuclear fusion) and EnergyBank (offshore wind storage) leading the way.
– Outset’s 60,000 square-foot Auckland facility provides portfolio companies with critical lab and engineering resources, helping de-risk deep tech ventures in a capital-efficient ecosystem.
– New Zealand’s startup funding rebounded in 2024, reaching a record $350 million, with Outset’s Fund II backed by two-thirds local investors and one-third international high-net-worth individuals.
– Despite global investor interest, New Zealand’s distance and smaller investor base make scaling challenging, but the country’s deep tech track record encourages bold, technical moonshots.
New Zealand’s deep tech sector is gaining momentum with a significant $25 million investment boost, fueling innovative startups tackling global energy and infrastructure challenges. Outset Ventures, the Auckland-based venture firm behind success stories like Rocket Lab and LanzaTech, has successfully closed its second fund at $41.5 million NZD, exceeding its initial target. The firm’s focus remains on supporting hard science and engineering breakthroughs, particularly in energy generation, storage, and infrastructure—areas where New Zealand’s unique strengths could drive global impact.
Angus Blair, a partner at Outset, emphasizes that while the country may not compete directly in AI development, it’s well-positioned to address the energy demands AI is creating. “The biggest constraint for AI growth is securing enough installed energy quickly,” Blair explains. “That’s where we’re directing our efforts.” Startups in Outset’s portfolio are already making strides, developing solutions for cleaner energy production, waste heat recycling, and infrastructure optimization.
One standout is OpenStar, a nuclear fusion startup pioneering levitated dipole reactors. Last November, the company achieved a critical milestone by generating superheated plasma at 540,000 degrees Fahrenheit—a breakthrough accomplished with just $10 million, far less than traditional government-funded fusion projects. Another promising venture, EnergyBank, specializes in long-duration energy storage for offshore wind farms, a solution that could boost profitability by up to 50% while stabilizing power grids, particularly in Europe.
Outset’s approach combines funding with hands-on support through its 60,000-square-foot Auckland facility, providing startups with rare access to labs and engineering equipment. This infrastructure helps mitigate the risks inherent in deep tech ventures, especially in a market where early-stage capital is scarce. While $25 million might seem modest compared to Silicon Valley standards, Blair notes it goes a long way in New Zealand’s capital-efficient ecosystem.
The country’s startup scene has shown resilience, with venture investment rebounding to a record $587.6 million NZD in 2024, a 53% increase from the previous year. Outset’s latest fund reflects this trend, with two-thirds of its capital coming from local investors and the remainder from international high-net-worth individuals drawn to New Zealand’s potential.
Despite challenges like geographic isolation and a limited investor base, Blair believes New Zealand is primed to tackle major global problems through deep tech. “Our biggest venture-backed successes have come from this space,” he says. “Founders and investors here feel empowered to take bold, technical risks—and that’s where breakthroughs happen.” With Outset’s latest fund, the country’s deep tech innovators now have even more firepower to turn ambitious ideas into reality.
(Source: TechCrunch)
