Investor Activity in NZ Tech Sector Continues to Intensify
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Investor Activity in New Zealand Tech Sector Continues to Intensify
TIN100 and MBIE launch second annual “Investor’s Guide to the New Zealand Technology Sector”
Auckland, May 9, 2017 – Investment in New Zealand’s technology companies continues to rise, with record amounts of funding coming from offshore investors, according to the second annual Investor’s Guide to the New Zealand Technology Sector published jointly by the Ministry of Business, Innovation and Employment (MBIE) and the Technology Investment Network (TIN).
The guide, which showcases New Zealand’s diverse range of high growth technology companies,
innovation capabilities and supportive business environment, presents a strong case for investment in New Zealand’s technology sector.
Findings show that either venture capital or publicly funded investment is a major driver of growth for more than 50% of New Zealand’s fastest growing tech companies, as defined by the guide. In addition, an increasing number of New Zealand companies are pursuing offshore investment early on. Last financial year to March 2017, early stage tech companies received more than $173 million in foreign investment, up from $51 million the previous year. This compares to $69 million* received from New Zealand-based angel investors, and an additional $7 million* from domestic crowdfunding which is enabling smaller investors to join the fray. Venture capital investment in New Zealand tech companies also continues to rise steadily, reaching $92 million* in 2016. In the 2016 calendar year a record total of $1B in capital was raised by funds for New Zealand private equity and venture capital investment.
The guide shows that the tech sector continues to show strong and sustained growth each year, earning significant international revenue. Revenue from New Zealand’s top 200 tech companies grew 12% last year, with nearly $7 billion generated in offshore revenues. Growth was evident across every region and sector.
“This year’s guide shows that funding is a critical part of the acceleration in sector revenue growth,” said TIN managing director Greg Shanahan. “Record amounts of money are being raised locally by firms to invest in this space and record amounts of investment are coming from offshore into select companies.
“Early stage investments from offshore investors are typically larger than are commonly seen in New Zealand. As the source of this money broadens, particularly with growing Asian investment, we can expect the trend to continue,” added Mr Shanahan.
The pool of high-profile investors is expanding rapidly, with an increasing number of existing investors now actively seeking more opportunities to invest in New Zealand-founded technology firms. Impressed by the innovation and growth potential on offer in New Zealand, many are making multiple investments.
“The thing we really like is that as a small and remote country, New Zealand companies
almost from conception think globally, and are structured to achieve that objective,” said Simon Feiglin, managing partner of the Riverside Company, a global private equity firm.
Copies of The Investor’s Guide to the New Zealand Technology Sector are free and are available in digital format on the TIN100 website (www.tin100.com), where hard copies may also be
requested. The report can also be accessed on the MBIE website (www.mbie.govt.nz).
*2016 Calendar Year
The guide, developed by TIN in association with MBIE, draws largely on public and private company data from the annual TIN100 Report (www.tin100.com) for the top 200 New Zealand technology firms (as determined by revenue). This data has been collected and aggregated by TIN over the past twelve years.
Inclusion in the TIN top 200 requires technology firms to:
1. Originate in New Zealand; 2. Retain a meaningful presence in New Zealand; 3. Operate in the High-tech Manufacturing, ICT or Biotech sectors; 4. Have developed their own technology-based intellectual property; and, 5. Generate at least 10% of their revenues offshore.
“Fastest growing” tech companies are those from within a pool of companies with a three-year compound annual growth rate over 20%.
About Technology Investment Network
Technology Investment Network (TIN) is a private company established in 1999 to facilitate the growth of the technology export sector in New Zealand. The company’s goal is to contribute to the New Zealand economy by supporting the growth of, large, sustainable, New Zealand based, global technology businesses. For more information visit: www.tinetwork.com
About the TIN100 Report
The TIN100 Report is produced by Technology Investment Network with sponsorship from NZTE (New Zealand Trade and Enterprise), Callaghan Innovation, EY and Spark. The TIN100 Report is a critical reference for benchmarking the performance of New Zealand’s 200 largest globally focused technology companies. The size of the tech industry has grown significantly since 2005 and in recognition of this, TIN collated information on more than 450 companies in 2016.