Investment with sunny prospects
A New Zealand skincare company is poised for offshore growth, but hitting the barrier so many local small businesses face - the search for expansion capital.
Skin Alive was launched in 2006 by Grant Lawrie to develop new specialised sun protection skincare products, designed and manufactured here for the intense ultraviolet rays sun-loving Kiwis have to deal with.
Skin Alive's products target the requirements of specific individual outdoor activities, such as golfing, surfing and skiing and, with sales hitting $250,000, the business has become a fulltime occupation for Lawrie.
But perhaps more exciting, by late 2011 Skin Alive had appointed distributors in Europe and the United States with first sales following in both markets while also steadily increasing in New Zealand.
But to capitalise on the growth potential, Skin Alive is hunting for $1 million of new capital. And that isn't easy in New Zealand.
Lawrie said that is partly because of the industry and markets the company is in, which are unfamiliar to many potential Kiwi investors.
Originally the company was searching for two tranches of $500,000, but taking advice from funding partner John Paine of TBK Capital, a single $1m tranche is now the target to "fast track" the company's growth potential.
It does appear Skin Alive has its ducks in a row. Not only are there distributors ready to rumble, it has also achieved Australia/New Zealand Standard, International Protocol Standard (European Colipa Standard) and the US Food and Drug Administration protocol standard and registration.
Lawrie said any investor is likely to be what he calls an "active partner" rather than a passive investor and one who would take a significant shareholding in the business.
And that's where TBK comes in.
Paine said TBK is filling a niche to help connect companies such as Skin Alive with investors. The demise of the finance company sector has also reduced options for small, high growth businesses, he said.
Skin Alive is fairly typical of that kind of business, funded by its founders but not capable of lending at scale from banks without presenting three years of qualified accounts.
However, TBK is 50 per cent owned by business sales company Tabak which has a database of qualified buyers. And there is the opportunity for Skin Alive which is also the kind of company TBK takes an interest in - one that is gaining traction quickly, Paine said.
"We're not really looking for people who want to put $10,000 in," he said.
It may also be telling that Skin Alive is attracting attention from potential investors in Australia, a market that is much more sophisticated than New Zealand, he said.
Skin Alive's products include different specialised sunscreen products (Surferskin, Snowskin, Golferskin) all formally rated SPF 30+ and manufactured locally under licence. Each is supplied in a range of containers, including a hands-free stick unique to Skin Alive products.
New products "Activeskin" and "Kidsskin" are under development. Skin Alive's products contain aloe vera and UMF18+ manuka honey.
The New Zealand Ministry of Science and Innovation has also given Skin Alive a $60,000 R&D grant to develop a marine environmentally friendly sunscreen which would be sold through supermarkets and pharmacy chains.
According to Skin Alive, more than 150 players on the US PGA tour use Golferskin. while Travis Rice, one of the world's greatest snowboarders also uses it.
Sunday Star Times