Icehouse Ventures has achieved a $40 million first close for its Growth Fund III, with KiwiSaver provider Generate featuring prominently among early investors. The venture capital firm is targeting a final raise of $150 million by year's end to invest in 20 to 30 early-stage companies over the next decade, focusing on businesses beyond the seed stage and into Series A to D funding rounds.

The development comes as venture capital advocates, including the Start Up Council, have criticized KiwiSaver funds for their limited engagement with the sector. With an election on the horizon, industry observers see this as an opportunity to push for policy changes that would encourage greater KiwiSaver investment in venture capital, potentially providing more domestic capital for New Zealand's growing startup ecosystem.