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Powerhouse Ventures seeking AUD$20m via ASX listing

Article by Amanda Cropp at - 03 August 2016

The Christchurch-based company, which specialises in intellectual property and technology investments, lodged a prospectus with the Australian Securities Commission on Tuesday.

Powerhouse is offering between nine million and 18.6 million shares at NZ$1.14 per share. The offering is due to open on 17 August with shares expected to begin trading on 28 September.

The aim is to raise at least A$10m and up to A$20m, giving the company a market capitalisation of A$30.8m to A$40.8m.

Powerhouse Ventures chairman Kerry McDonald said the company would enter the Australian market at a time when governments were encouraging university researchers to commercialise their work.

According to the Powerhouse prospectus government investment in Australian and New Zealand university research was over A$10 billion in 2014 and this created opportunities for inventions with considerable commercial potential.

It said universities and research organisations often lacked the resources and capability to identify markets, source capital, and attract interest from entrepreneurs who could take products to market.

The problem was that investors often preferred to see technology that was well developed and wanted proof of its saleability.

Powerhouse could help by providing the management expertise, mentoring and technical support needed to take research results through to full commercialisation.

McDonald said that since 2010 Powerhouse had generated an internal rate of return of about 30 per cent per annum based on investment in 19 companies, and aimed to continue that performance.

"However, to do this and grow the business we need to access more capital," he said.

"We've got a number of additional companies in the pipeline we need to convert to active status and we will be investing in those. We are planning to develop the business in Australia, and we will use some of the funding for that, and for operating expenses."

The Powerhouse portfolio includes Fluent software that detects emotions by tracking micro-expressions, Solar Bright smart road markers, Avalia​ cancer immunotherapy, and electricity turbine maker HydroWorks​.

Powerhouse managing director Stephen Hampson said that apart from the longer term financial benefits for universities through licensing of their intellectual property, they gained in other ways too.

Spin out companies could contract universities to do research for them, which often led to internships and jobs for students involved in the research.