Outset Ventures Fuels New Zealand's Deep Tech with $25M Fund

New Zealand’s ambition to become a global leader in deep tech just received a significant boost. Outset Ventures, an Auckland-based venture firm known for spinning out unicorns like Rocket Lab and LanzaTech, has successfully closed its second fund at an oversubscribed NZD 41.5 million (approximately $25 million USD). This fund is dedicated to supporting startups focused on hard science and engineering breakthroughs, particularly in energy generation and storage.

Outset Ventures believes New Zealand is uniquely positioned to lead in these areas, especially as AI growth increasingly strains energy and infrastructure systems. Angus Blair, a partner at Outset, highlights that the biggest constraint on AI expansion is the availability of installed energy, which has driven the firm’s focus on energy innovation.

Among the standout startups in Outset’s portfolio is OpenStar, a nuclear fusion company developing levitated dipole reactors. OpenStar achieved a milestone by creating superheated plasma at around 540,000 degrees Fahrenheit, a critical step toward practical fusion energy. Remarkably, this progress was made with about $10 million in funding, a fraction of the cost and time compared to traditional government-led fusion projects.

Another key player is EnergyBank, which is developing long-duration energy storage solutions tailored for floating offshore wind farms, especially in deeper waters like those in the North Sea. This technology not only enhances the profitability of wind assets by about 50% but also supports grid resiliency and powers data centers, addressing critical infrastructure challenges in Europe and beyond.

Outset’s approach includes providing startups with access to a 60,000 square-foot facility in Auckland, equipped with labs and engineering tools that are otherwise scarce in New Zealand. This vertical integration helps de-risk deep tech ventures in a country where early-stage capital and technical resources are limited.

While $25 million may seem modest compared to Silicon Valley standards, it is well-suited to New Zealand’s capital-efficient startup ecosystem. The country’s venture investment rebounded strongly in 2024, reaching a record $350 million NZD, signaling growing confidence in local innovation despite global economic uncertainties.

Outset’s investor base is a mix of local institutions and international high-net-worth individuals, many of whom have relocated to New Zealand. Despite challenges posed by geographic distance and a smaller local investor pool, the firm is committed to scaling Kiwi startups with global ambitions, particularly in deep tech domains where New Zealand has historically excelled.

In summary, Outset Ventures is positioning New Zealand as a launchpad for ambitious deep tech startups that address critical global challenges in energy and infrastructure. By combining capital, technical resources, and a focus on capital efficiency, the firm is enabling moonshot innovations that could reshape industries worldwide.