Social Code – Convertible Note

Punakaiki Fund has invested into Social Code, a Wellington and San Francisco based start-up that helps patients prevent and manage chronic disease by connecting them with their doctor, other medical professionals, family and peers. The investment is an interim one, and in the form of a vanilla convertible note (debt that will convert into equity at the next round). We made the investment as Social Code needed secure finance as they work out a revised deal with Punakaiki Fund and another set of investors for their current equity raising round.

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December 2014 Capital Raising Results

Our December 2014 capital raising round raised $1.140 million from 34 new investors. We issued 91,200 Shares+Option at $12.50 each, with the option being to purchase 1 Share for $14 before September 30th, 2015.

The original 57 investors (Including LWCM and Chris) own 302,600 shares, and have options to purchase an additional 152,500 shares at $12 each before June 30th, 2015.

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Vibe Communications

Punakaiki Fund this week reinvested in Vibe Communications, bringing the fund’s shareholding to 24%. The remainder of the shares are owned by the executive-founders, CEO and key staff.

Vibe had a fantastic year in 2014, growing their network, launching new products and delivering for customers. We expect even more activity and growth in 2015.

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November 2014 Options Round Results

We successfully closed our November 2014 options round with 98.4% of the options redeemed at $10 per share, for a total of $1.5 million. While 80% of the options were taken up by their holders, and the remainder were traded within shareholders, at a price of $1 per option.

We were very pleased to see the confidence expressed by shareholders.

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Our final investment of our initial funds is for just under 5% of Timely.

Timely provides appointment booking services to beauty salons, hairdressers, spas, consultants and personal trainers. There is a little overlap with InfluxHQ, but Timely currently focusses on one client per appointment, and InfluxHQ on gym classes. Each company has consented to our investment in the other.

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Punakaiki Fund has acquired 18.33% of InfluxHQ, a company that provided software for Crossfit Gym owner-operators to run their gyms. Crossfit is a very fast-growing fitness exercise philosophy and sport that produces amazing results with a very wide range of activities using basic equipment. The gyms are typically small, and have several classes a day of up to 15 people per class. The content of the classes changes from class to class and day to day, and members select which classes they want to go to, and pay with a monthly subscription plan. It’s a demanding environment for gym management software, so InfluxHQ is learning very rapidly how to serve not just Crossfit but bigger gyms too.

Influx has been in development for a year and a half, and is founded is Scott Mayo and his wife, Dania Mayo. Scott brings many years of experience from developing software for Les Mills International – the world’s leading provider of gym programs. I suspect that very few people know this space as well as he does.

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Vibe Communications

Punakaiki Fund has acquired a 20% stake in Vibe Communications.

Vibe Communications (Vibe) is an Auckland based ISP (Internet Service Provider) that provides wholesale and corporate telecommunication services to businesses in New Zealand. They have a strong technical reputation, and use their networking and procurement deal skills to provide high quality service to serve other ISPs and ICT service providers. They are most comparable to an early version of Australia’s Vocus, which is now listed on the ASX.

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We have placed our first investment with Mindscape, for a little over 5% of the company. We have been tracking Mindscape and their new product for a while, and were very happy that we were able to re-open an investment window that had been closed, becoming the largest investor in Mindscape’s capital raising round.

Mindscape was co-founded by John-Daniel (JD) Trask and Jeremy Boyd in 2007, and Lance had previously co-invested with JD, who is Mindscape’s CEO, in Valuecruncher back in 2007. That particular investment didn’t work out, although we all learned a lot in the process and much more since then.

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Punakaiki Fund Private Capital Raising Results

We are very happy to announce that we have raised $1,525,000 for Punakaiki Fund, from 55 private investors. Many thanks for your support.

We were unable to complete our public offer in 2013, and paid the $3.3 million that was committed back to those investors. This private offer was only made available to those previous investors who were also eligible under the old Securities Act, and had a minimum investment of $20,000. Unfortunately the eligibility and minimum amount requirements meant than most of the 360 or so investors from the pubic offer were unable to participate, but we remain very grateful for their previous support, which we will remember for future offers to the public.

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