Powerhouse Ventures Ltd (ASX:PVL) discusses its early stage investments and growth in its portfolio


by Carolyn Herbert

Transcription of Finance News Network Interview with Powerhouse Ventures Limited (ASX:PVL) Chief Operating Officer, Colin Dawson

Carolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from Powerhouse Ventures Limited (ASX:PVL) is Chief Operating Officer, Colin Dawson. Colin, welcome to FNN.

Colin Dawson: Thanks Carolyn.

Carolyn Herbert: Can you start by giving us an introduction to Powerhouse Ventures?

Colin Dawson: Yes we provide early stage funding for innovations that come out of typically universities, could be other research institutes. And typically they’ll have very strong intellectual property, which is ultimately going to be very valuable to industry. So you can view us as a bridge of funding and expertise that will shape up that opportunity, to make it more ready for industrial use or marketplace use.

Carolyn Herbert: Now to your investment portfolio. What is the spread of investments?

Colin Dawson: It’s a broad spread. We have medical and healthcare, we have ICT digital, we have agritech environmental and cleantech engineering. So we try to maintain a pretty even spread over time. We have different stages of pre-seed, seed and post-seed investments. All in a reasonably early stage, but some of them graduating on towards revenue and being ready for industrial purposes.

Carolyn Herbert: So what stage are they at?

Colin Dawson: We have 12 investments at the moment and pre-seed stage. We have three in what we call seed, little bit more advanced and we have another seven that are post-seed. So in that seven, they’re developing revenue and customers and bigger resources, management teams and so.

Carolyn Herbert: How has the portfolio performed over the past 12 months?

Colin Dawson: It’s been great. We’ve had a 35 per cent return year-on-year. That’s quite a stretch and that’s something that we hope to maintain, into the future.

Carolyn Herbert: Now to deal flow. How do you compete for deals and what does the process generally involve?

Colin Dawson: We don’t usually view it as competing. We view it as the relationships and the awareness of the great research that’s going on in Australia and New Zealand. And over time, we get a deep understanding of that. We develop relationships with the university commercialisation officers and the researchers themselves. And once we do that and have some projects with those organisations, trust develops and we get to identify even better and better processes. And probably do it more efficiently over time, as we go back with those groups and do more deals.

Carolyn Herbert: How much do you typically invest in any one start-up?

Colin Dawson: Typically it’d be between $0.5 million and $1 million at this stage. We have a target zone of ownership of about 25 to 35 per cent. So we don’t wish to dominate that company ownership. It’s very important to us that the research organisation has a decent stake in that venture, so that as they create impact through their research through that start-up company, they also get a benefit. And that will encourage them over time to go back to the well, and do more and more deals like this. So we need to have something in it for everyone, in that eco-system.

Carolyn Herbert: Finally Colin. Where would you like to see the company 12 months from now?

Colin Dawson: We think we’ve got a great model. We’d like to continue growing our portfolio. At the moment we’ve got 22 companies in our portfolio, we’d like to see that grow to 30. And naturally as we do that, these companies are hungry for further capital for growth and development. So we’ll be raising capital to support both new deals and the existing portfolio, so we can scale our model quite successfully. In fact, we amortize our costs and are more effective than ever before, as we grow the portfolio to a bigger number.

Carolyn Herbert: Colin Dawson, thanks for the introduction to Powerhouse Ventures.

Colin Dawson: My pleasure Carolyn.



Carolyn Herbert

Finance News Network
Carolyn joined FNN in August 2015 as the Head of News and also presented the Market at Midday and the Market Wrap. With more than five years of broadcast journalism experience, Carolyn has worked as a finance anchor on the Sky News Business channel and as an anchor and reporter for ABC News. She is also a qualified corporate lawyer specialising in IPOs, takeovers and mergers and acquisitions.