Ukrainian in New Zealand raises millions and reveals two new investments

New venture capital operator NZVC has raised $17 million for its first fund and revealed two new investments.

Co-founder Mark Pavlyukovskyy says NZVC backed KiwiFibre – a Christchurch startup launching its harakeke (flax)
composite as a radio-transparent and vibration-damping alternative to fiberglass and carbon fiber.

The fund also recently invested in Curve Biosciences, which is developing technology to screen for liver cancer and other high-risk cancers through low-cost blood tests.

Curve is based in California, but Pavlyukovskyy says a trial is underway in New Zealand with a focus on Maori and Pasifika populations, which have a higher than average incidence of type 2 diabetes, fatty liver disease and other risk factors for liver cancer. .

Over the past few months, NZVC has also invested in a range of local startups, including Wellington Seachange electric ferry tech startup Pyper Vision – a Christchurch start-up that is developing a spray that can quickly absorb moisture from the air, clearing fog from an airport runway in as little as 10 minutes – EasyCrypto, Auckland-based sublease startup EasyRent, drone tech-turned-audio-specialist Dotterel and Upstock hospitality online ordering.

Pavlyukovskyy revealed NZVC’s two new investments as his firm prepares for a portfolio day in Wellington with an in-person appearance by one of the fund’s US partners and investors, the former chief operating officer and chief financial officer of Disney and the current head of Spotify, Tom Staggs, as well as the United States. -Glen Anderson-based partners NZVC, who led Google’s machine learning group for a decade, and Ajay Gupta, a former head of equity trading at Merrill Lynch,

When the Herald last caught up with Pavlyukovskyy, he was based in Queenstown after arriving in New Zealand on the brink of the pandemic on an Edmund Hillary scholarship.

While some of his program peers decided to return to their home countries, Pavlyukovskyy decided that New Zealand was “probably the best place to stay at the moment”.

Now he plans to stay long term and has applied for permanent residency. He now lives in Wellington, where he recently moved after a four month stay in Nelson. His plan is to stay in New Zealand and continue to move around the country, in line with his post-pandemic thinking that San Francisco’s venture capital hub and neighboring Silicon Valley are now more of a mindset. than a geographical location.

Pavlyukovskyy was born in Ukraine, but moved with his family to the United States when he was 9 years old.

After studying molecular biology at Princeton, he traveled to Ghana in 2010 on a health scholarship, where he developed a game to help teach children about malaria.

He then became a PhD student at the University of Oxford, studying in vivo cancer imaging and machine learning. At the same time, he founded Piper, a startup that created an educational toy – based on a Raspberry Pi computer, where a child’s real-life modifications to a hardware kit turned into a game of Minecraft.

In 2013 he left Oxford to focus on Piper. He moved to San Francisco and raised $15 million for his startup from backers including VC veterans including Anderson and Gupta, who now also back NZVC.

Like all Ukrainian expats, Pavlyukovskyy is watching the war closely. He gets constant updates from his best friend.

He tells the Herald that they played war games when they were kids.

When Russia invaded, his friend signed up. “He found himself in a special operations team and took part in the recent liberation of the Kharkov region,” Pavlyukovskyy said.

“It’s terrible what’s going on there. I hope it ends soon, for the good of people on both sides.”

Threats – and opportunities – in The Big Chill

A “big chill” has swept the venture capital scene recently, with a number of venture capital firms slashing company valuations, bringing them in line with the (falling) valuations of their listed peers as recession fears grow up.

At the same time, rising interest rates draw investors’ money elsewhere.

Pavlyukovskyy says NZVC had completed most of its climb before the headwinds emerged, however.

“A bear market: the best time to invest,” says Pavlyukovskyy.

There’s the obvious upside for any VC: if you have the money, you can now buy a bigger share of a startup at a lower valuation.

But more broadly, the Ukrainian sees a downturn as a testing ground. During a boom, it’s easier for anyone to look good. In times of recession, talent shines.

“The best companies are built during bear markets, and resilient founders perform best in chaos,” he says.

He unrolls a list of tech companies founded in a trough, from Microsoft during the oil shocks and stagflation of the late 1970s to the rise of Google and Facebook during the post-2000 “tech sinking” to the Airbnb launched in 2008, just like the GFC hit.

A refuge of stability

Pavlyukovskyy also sees an advantage for New Zealand in the current global chaos.

He cites the example of Skype co-founder and NZVC investor Jaan Tallin (who will be part of the lineup for Portfolio Day in the capital.

“Jaan is based in Estonia, which has the highest rate of unicorns per capita. He understands that stable, rules-based government and access to larger markets are essential for innovation ecosystems and he think New Zealand has all the right ingredients.”

NZVC’s investor base also includes Boulder, Colorado-based Foundry Group’s Brad Feld and Ryan McIntyre. Pavlyukovskyy says they see New Zealand as a regional market like Boulder that will see founders settling here for the lifestyle and building global businesses from our shores.

“It’s a great time to be in New Zealand and some great businesses are going to emerge during this time,” he says.

Global technology hub potential

Saggs, a Disney alum and Spotify executive – who is usually based in Los Angeles but was in Wellington this week to headline NZVC’s Portfolio Day – already had a feel for the lay of the land before he put the money in. the new fund.

The American was named head of Weta Digital in December 2020 until the company founded by Sir Peter Jackson sold its tech division to US firm Unity Software in November 2021 in a $2.3 billion deal of dollars.

“New Zealand is a hotbed of entrepreneurial activity and the founders of Kiwi are hungry for mentorship from globally minded investors to [help] their bigger, faster businesses,” Saggs told the Herald.

“NZVC provides the one-stop bridge to Silicon Valley and has real operators managing the fund who sympathize with the founders, help them with additional fundraising, operational support, hiring and sales.

“We are delighted with how New Zealand has opened its arms to embrace our fund and we are working with other members of the ecosystem to make New Zealand a global technology hub.”