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Punakaiki Fund invests in NZ Artesian Water

New Investment: NZ Artesian Water

We’ve seen plenty of headlines recently about offshore companies bottling our water and making fortunes. So when I met Nelson-based Kiwis Andrew Strang and Wayne Herring through a Better by Capital engagement, I was eager to see how their New Zealand Artesian Water business (NZAW) was progressing. The answer was “very well”, and that they were actively looking for funds to grow.

We are very impressed by their supply strategy – working closely with the Tasman District Council – their product and their plant, as well as their plans for expansion. Their premium alkaline water, E’Stel, comes in elegantly designed bottles and also in boxes, and is mainly sold into China, although NZAW has supply contracts across the world. They have also developed a new blended-water product for China aimed at mothers using infant formula. For now their primary challenge appears to be scaling the business to deliver on sales demand. Investors living in or visiting the South Island can help with that demand – E’Stel is available at selected retailers there.

The brothers-in-law have a background in West Coast mining, and Andrew also has a background in the high end fashion and jewellery business and a lot of experience in Asia. Their unusual combination of experiences, combining New Zealand’s natural resources with fashion sense, trading in Asia and grit started to pay off from when the Prime Minister opened their plant in March 2015, and since then the company has grown quickly.

Andrew and Wayne know how to get things done, and their story will continue to attract attention as their business grows. We are delighted to be able to join them on their journey.

The investment
Punakaiki Fund has invested in a 11.8% shareholding in NZAW, and has options to bring the shareholding up to 20%. I’ll be joining the board of directors (as I will also do for Linewize).

But is this hi-tech?
We set up Punakaiki Fund to invest in all sorts of high-growth companies, but in particular those in technology, internet and that are design-led. We increasingly believe that quality high-growth companies combine most or all of these elements, and NZAW certainly uses design and technology to gain an advantage. Their bottles, for example are square-based and round topped, but with a curve and thickness that means they not only look good on the shelves, but they also stack higher in shipping containers and are reusable. Their infant water is a designed product – building on MIT research to deliver the optimum product for babies. Most of all though we see that their growth prospects are very strong, and that our funds will help them a lot on their journey.