Good foreign investment

Business Insider reports:

Peter Thiel, famous for making billions off Facebook, tells us he’s finally found “utopia” – New Zealand.

Thiel has been investing heavily in the country.

He’s already made two noteworthy venture investments there in the space of a few months. In October 2010, he invested $3 million in online accounting firm Xero, which is based (and publicly traded) in New Zealand. Then he invested $4 million in Pacific Fiber, an ambitious company that is building a fiber-optic cable from Australia to New Zealand to the US and is raising $300-400 million more to do so.

I’m a fan (and share holder) of Xero, and a fan of Pacific Fibre. I want them to suceed. But they need to attract capital to do so, and not enough capital exists in NZ.

 

These investments aren’t just one-offs. Thiel has set up a local venture firm called Valar Ventures. Valar Ventures LP was registered in New Zealand in July 2009, more than a year before Thiel’s first known New Zealand investment, and is managed by Valar Capital Management LLC, based in San Francisco, according to official records. Valar Ventures LP’s offices are at prominent New Zealand law firm Bell Gully, which suggests it doesn’t have full time staff yet. Peter Thiel founded two other companies in New Zealand: Second Star Limited, where he is sole shareholder, and Silverarc Advisors. …

Here’s a thought: maybe Peter Thiel wants to turn New Zealand into the next Silicon Valley. Or maybe even the libertarian utopia of his dreams.

Investing in a huge undersea fiber optic cable is typically a safe, low-return investment, which isn’t the kind of investments Thiel goes after. But bringing high speed internet into New Zealand would be a first step to turning the country into a new Silicon Valley.

The name of Thiel’s firm Valar Ventures comes from J.R.R. Tolkien’s Lord of the Rings universe. Thiel is a huge Tolkien fan and the Lord of the Rings movies were filmed in New Zealand. In Tolkien’s legendarium, the Valar are deities who created the world of Middle-Earth (portrayed by New Zealand in the movies) and then descended on it to help nurture its infancy and development.

Reached about this idea, Thiel said: “New Zealand is already utopia.  But Silicon Valley and New Zealand can learn a lot from each other, and we want to help make that happen.” So Thiel is clearly in it for the long run.

So when Labour and Winston First rail against foreign investment, think about this article and the fact we should be celebrating that someone like Thiel wants to invest in NZ.