Village News – April 2023
Welcome to the second edition of the 2023 Hillfarrance Village News! A lot has happened since the last one, from rebranding our website using Octana, to our annual Village Summit and our latest investment in Naut!
Keep reading for more👇
What we've been up to
A few months ago, we began the arduous journey of reimagining our brand and what it means for current and future stakeholders. We wanted to create a living, breathing brand that brought together the Hillfarrance veritable Imaginarium of creativity and entrepreneurship with our relentless focus as a fund. Most importantly, we wanted to create a graphic that offers something new every time you see it.
Here’s to the explorers hiking the frontiers of machine learning.
Here’s to the architects building the bridge between the next-generation media and gaming worlds.
Here’s to the champions of our planet-building solutions to combat the climate crisis.
Here’s to the misfits, the dreamers and the folks who are too big for their britches.
Thank you so much to Mélanie and the team at Floating Rock Studio for creating our awesome animation. Without further ado, we are also proud to reveal the new Hillfarrance Venture Capital and the launch of our website, which has been created using the incredible Octana platform - www.hillfarrance.com
Last week, we held the inaugural Hillfarrance Venture Capital Village Summit at Fort Takapuna in Devonport. We brought together our LPs, founders and key service partners in a room for one day to learn more about each other and network.
With Michael Philpott masterfully handling the MC’ing and our team and portfolio company founders providing the content, we explored the notion of “Living Three Years in the Future”. Delving deep into our focus as a Fund, we covered the following:
An update on from me on Hillfarrance Fund I, how we have hit top quartile IRR performance and our plans for the future.
Due to the Chatham House rules of the Village Summit, we won’t be sharing the content in a public setting, but here is a brief sizzle reel of what we think was the best event we have ever hosted in our careers! Thank you so much to Marleen Goedhart and Jaime Beetson at Icon Conference and Event Management for their support in organising the Summit. We couldn’t have done it without you and look forward to upping the ante in 2024! Thank you to Phil Taylor and the rest of the Tompkins Wake team for your support of this event over the last few years.
The Hillfarrance Village having dinner before GDC week
In late March 2023, Alex headed over to San Francisco with IGC, Floating Rock Studio & Space Rock Games for the Annual Game Developers Conference (GDC)! This monumental conference is one of the globe's largest gaming-related conferences, with tens of thousands in attendance. Our mission there was simple; to connect with gaming publishers, gaming investors, gaming studios and industry leaders to build meaningful relationships and business development opportunities.
The conference was a huge success for the Hillfarrance Village!
Portfolio company updates
The go-to electric propulsion system for boats
New Zealand has a rich maritime history and culture. Braving some of the most treacherous seas known to humans, the people of this country have saltwater running through their veins. In fact, in the case of the race to create leading, next-generation sustainable boats, we would patriotically state that we should bloody well win it.
It is with this braggadocio in mind that we are excited to welcome Naut to the Hillfarrance Venture Capital Village. Naut is building a next-generation electric marine propulsion system to retrofit existing craft or power entirely new ones. With the global plethora of electric boat companies raising over the last few years, why did we partner with this Whangarei-based powerhouse? Quite simply: 🛥️ The founding team and employees have decades of experience building and scaling electro-technology, including designing and developing NZ’s first electric ferry. In short, we know how to scale hardware profitably. ⚓️ We have already completed a project to study the feasibility of an electric, sustainable version of one of Aotearoa NZ’s most iconic tourist attractions and have more prospective projects lined up. 🐠 A product road map that democratises electric propulsion systems and lowers the barriers to entry for boat owners. We might even convert some previous non-boaties into electric boat owners. With years of experience investing and scaling software-enabled hardware, our team is excited to charge Naut’s cells and get stuck in.
You can read more about our investment below:Read here
The Best Low Code Frontend for Headless Content
Octana is making some awesome progress with product development and leveraging its relationship with Contentful, one of the worlds leading Headless Content Management System providers.
Co-founder & CEO, Anna, will be heading to Denver and San Francisco soon so give us a nudge if you know anyone there that you think she should meet!
One platform to connect the vertical world
Product Market Fit (PMF) is defined as being in a good market with a product that satisfies that market (Marc Andreessen quoted). Scannable is certainly getting into that camp, with its products being out on full display from customers all across the globe and on social media.
Above, you'll see one of Scannable's customers, White Dragon Access, using Scannable's NFC tags on their safety equipment. On the right, we can see the reach of Scannable with their products being used in both NZ and in Ukraine for work at height safety.
Connecting the world's parts
Partly co-founders Levi Fawcett and Nathan Taylor (南胜杰) were interviewed by EO STUDIO, where they shared Partly’s story and the lessons learnt along the way. From countless challenges, setbacks and pivots, they discuss it all. It's an honour to be featured by EO among amazing companies like Snowflake, Notion, Deel & Allbirds. Thank you for giving Partly the opportunity to share their story with the world!
The future of insights now.
We are thrilled to announce Doug Guion has joined the Yabble team as Chief Growth Officer as Yabble looks to continue its pursuit of creating and delivering the future of insights now to our customers. Read what Doug and Yabble CEO Kathryn Topp have to say about what this means for Yabble here.
Bringing Gameplay Collectables to Life
We hope Craig and Constant don't mind the effusive praise, but we wanted to share this image showing how the initial In Game Collectables AI platform has advanced since their pre-seed closed four months ago. The figure in the middle is our first-ever IGC prototype using a basic 3D printer. The figure on the left is our latest version using our new beast of a printer (mouth drop), but it is the early build on the right that is blowing our minds. This little character is entirely created using our generative AI platform, Houdini360, working off a simple 360 video capture of the character in-game with our AI, filling in the gaps. Mind-blowing, world-first work, IGC. The future of toys is here. Thank you to Gustav and Outerdawn for letting us work with their character from Grimguard Tactics. Pick it up on the Apple AppStore here.
Thank you to Callaghan Innovation for their support in making our prototypes come to life.
Next-generation VFX & Animation
Here’s one for the innovators, storytellers and trailblazers of the New Zealand startup sector. 😊 We are proud to be honorary Floaties and part of the Floating Rock Waka. That's why we have led their latest seed round to propel FLoating Rock to new heights and become the leading VFX & Animation studio globally. Thanks, as always, to Phil Taylor, Ben Skelton and Joseph Bracewell at Tompkins Wake for executing the investment for us.Click here to read more
Deep Cooperative Gaming
It’s crazy that just over two years ago, we met Zsombor, Kieran Dunn, Vanessa and Varun at our Startup Capital Roadshow in Hamilton. They pitched us their idea for Criminals Within, and we initially turned it down 🤦♂️. We came to our senses a short while later and jumped in head first. Fast forward to today, and we have just released our trailer and vertical slice to fanfare from the world’s media and publishers. We hit the internet last month and have been featured on global platforms such as IGN Entertainment and GDC MIX.
You can check out our awesome trailer above, which was an extraordinary Hillfarrance Village collaboration between Floating Rock Studio and Space Rock Games. The NZ game development industry is on 🔥 right now.
Prehistoric action-adventure game
Exceptional work recognised by an exceptional platform. Our talented team of artists, animators, developers and resident palaeontologists at Hashbane Interactive have created what is likely the most accurate depiction ever of one of the Triassic era’s apex predators, the Coelophysis. Thanks to 80.lv for the in-depth feature on the magic coming to the fans and future players of our game, Instinction. Don’t forget to add Instinction to your Steam wishlist hereRead more about their Coelophysis model here
Portfolio company career opportunities
We have been messing around with machine learning for almost two decades and investing in it for half of that time. The advances made in the last three years since the launch of OpenAI and other MLaaS platforms have been immeasurable, and we expect that to continue and accelerate in the months and years to come. We decided to drop down a few thoughts on how the investment landscape has and will change for startups pursuing machine learning business models, using the Blue Ocean strategy as a guide. There are certainly still opportunities, but those who focus on the problem they are solving and the uniqueness of the training data will emerge victorious.
Read of the month
Market Annealing is the effort a company expends to make itself and a market pliable enough for early go-to-market. It applies when the company has a better idea than the market for what the market needs and so has to work hard to overcome the inherent shape of the market. And it can take years of struggling for relatively modest progress.
The article discusses how market annealing, or the process of finding product-market fit, can be a slow and difficult process. It emphasizes the importance of focusing on customers and their needs, as well as being willing to adapt and iterate based on feedback. The authors also suggests that startups should aim to create products that are "remarkable" and differentiated from competitors, rather than simply being "good enough."Read the full article here
Listen of the month
The "My First Million" Podcast hosted by Sam Paar & Shaan Puri, is a podcast about exploring business opportunities based on trends the hosts identify in the world. Every episode, they brainstorm new opportunities and sometimes have well-known (or low-key) business figures on as guests.
The one above is with Dharmesh, the Co-founder of HubSpot, where they brainstorm new ChatGPT business ideas.
Startup News & Trends
AngelList recently published its Q1 2023 report on the state of early-stage venture in The U.S. Here were the highlights:
While positive activity (i.e., markups) on the AngelList platform reached its highest levels since 2Q22, investment activity declined to the lowest rate ever observed in our dataset.
Average valuations declined at most funding stages, while median valuations actually increased for later-stage deals.
A majority of investment activity on AngelList focused around early-stage deals, even though the observed positive activity came from later-stage deals.
8.1% of investment activity in 1Q23 involved startups in the AI / ML space, the largest share ever observed in our dataset for the sector.
Read the full report here.
This year, we may see more startups acquiring other startups.
This article by Crunchbase touches on acquisition data of venture-backed startups acquiring other startups over the 2022 and 2023 periods. Although the acquisition volume of Q1 2023 is lower than Q1 2022, there may be a case for this to overtake the volume of 2022 due to lower valuation multiples all around.
According to Pitchbook, 23 VC firms, including giants like Tiger Global, have committed to a net-zero investment portfolio by 2050, meaning all startups they invest in should aim to reduce overall carbon emissions. Most of the firms who have signed this commitment are Climate-focused VCs. However, there has been criticism that early-stage ventures do not have the privilege to focus on net-zero at such a fragile stage of their lifecycle, and that survival is paramount.
Gartner recently published an article about Generative AI and gave examples of industry-specific use cases that may proliferate in the short and long term. These were:
Generative AI in drug design
Generative AI in material science
Generative AI in chip design
Generative AI in synthetic data
Generative design of parts
Gartner also expects:
By 2025, 30% of outbound marketing messages from large organizations will be synthetically generated, up from less than 2% in 2022.
By 2030, a major blockbuster film will be released with 90% of the film generated by AI (from text to video), from 0% of such in 2022.
Notable start-up exits
Culver City, California
Mobile-first Video Gaming Company
Savvy Gaming Group
Robotics for Spine treatments
Collingwood, Victoria, Australia
Global Seed Funding
Synthetic data company
Led by Investible
San Francisco, California
Closed loop payments platform
Led by Bain Capital
Cell therapy biotechnology company
Led by General Catalyst
Manufacturers of nutritional protein
Led by Early Bird VC
Electric Propulsion System for Boats
$1.5 million Seed round
Led by Hillfarrance
$1.5 million Seed round
Led by The Values Trust
AI Engine for eye health diagnosis
$13 million Series A
Led by National Vision Inc.
Manufacturing startup for the hydrogen industry
$2.5 million Seed round
Led by WNT Ventures
Building something awesome? Let's get in touch.