Outset Ventures, the Auckland-based venture firm and incubator behind deep tech successes like Rocket Lab and LanzaTech, has announced the close of its second fund, achieving an oversubscribed total of NZ$41.5 million (approximately USD$25 million). The new fund aims to drive cutting-edge innovations in deep technology sectors where founders and investors believe New Zealand offers unique advantages.
Its investment approach prioritizes breakthrough developments in hard science and engineering, spanning industries from aerospace to medical technology, with special emphasis placed on renewable energy generation, storage solutions, and infrastructure resilience. According to Outset partner Angus Blair, New Zealand’s position in global innovation places it ideally to solve real-world problems created by the expansion of artificial intelligence. Blair notes that AI’s proliferation already creates significant stresses on global energy grids and supporting infrastructure, areas uniquely suited to New Zealand’s technical capacity and focus.
“We recognize the biggest constraint for further AI growth is who can deploy reliable energy capacity the fastest,” Blair stated. “This realization has guided us towards intensifying our investments in energy generation and infrastructure solutions.”
Highlighting the fund’s strategic direction are two promising portfolio companies: OpenStar and EnergyBank. OpenStar, a nuclear fusion startup pursuing levitated dipole reactor technology, achieved a major milestone late last year, successfully generating superheated plasma above 540,000 degrees Fahrenheit—a critical step toward viable fusion energy production. Remarkably capital-efficient, the startup reached this landmark moment with only about $10 million invested, contrasting dramatically with traditionally lengthy and costly government-run fusion programs.
EnergyBank, another significant portfolio entrant, is developing long-duration, floating energy-storage platforms intended to pair efficiently with deepwater offshore wind farms. Blair emphasizes that EnergyBank’s technology significantly increases the economic viability and market value of offshore wind power, notably as Europe confronts persistent energy resiliency challenges. These innovative storage systems also support infrastructure critical for data centers and high-capacity grid demands.
With the new fund, Outset Ventures aims to build upon lessons learned from their inaugural fund, which established deep tech as a credible venture sector in New Zealand. Now, the firm sets its sights on actively scaling New Zealand-born technology companies into robust global players. Central to this effort is Outset’s dedicated 60,000-square-foot facility in Auckland, offering portfolio startups access to otherwise difficult-to-find laboratories and specialized engineering equipment.
Although modest by Silicon Valley standards, the fund’s NZ$41.5 million size aligns well with New Zealand’s traditionally capital-efficient startup ecosystem. The nation’s investment community favors technical strength and careful scaling over rapid growth at all costs. After declining somewhat in 2023, early-stage startup investment bounced back impressively in 2024, totaling approximately NZ$587.6 million (USD$350 million). According to Blair, two-thirds of Outset’s second fund comes from domestic institutional and private sources, complemented by high-net-worth international individuals, reflecting New Zealand’s blend of local confidence and global attraction.
The geographic isolation of New Zealand continues to present fundraising hurdles for emerging startups, with global investor networks scarcely accessible during early stages. However, despite such barriers, notable international venture firms—including Bessemer, DCVC, Founders Fund, and Khosla Ventures—have recently shown growing interest in the country’s deep technology potential.
Ultimately, Blair insists, New Zealand’s distance and intimate market size are strengths rather than weaknesses. The country’s deep tech sector consistently punches above its weight on a global stage, generating historically impressive successes that encourage greater confidence among entrepreneurs and investors alike.
“Our most important historic successes have come from hard science-driven ventures,” Blair explains. “It’s why both founders and investors here feel confident taking ambitious leaps—these big, moonshot-style bets—in fields that demand complex, technical innovation.”
