Whereas startup funding globally fell final yr, New Zealand enterprise capital funding was nonetheless on the rise, with NZ$726 million poured into 154 offers in 2022, in keeping with the Expertise Funding Community (TIN).
The Expertise Funding Report, launched in Auckland as a part of Techweek 2023, covers funding Pre-Seed to Sequence C+, monitoring file ranges of funding over the past two years. It was compiled with assist from the ASX, NZ Development Capital Companions (NZGCP) and BNZ, alongside native VC and angel funding corporations.
As international enterprise funding fell between 32-35% in 2022, funding for NZ tech grew by 8.2% final yr, pushed by offshore-led funding, which surpassed NZ$400 million, up from $288m in 2021.
Offshore traders led 26 of the 154 offers at a mean of NZ$15.5m per elevate, accounting for 55% of complete capital raised in 2022.
One other $268m was injected into native tech firms by onshore traders throughout 102 offers, with undisclosed non-public traders contributing an extra $59m throughout the remaining 26 offers.
Deeptech shines
Report creator and TIN’s head of analysis, Alex Dickson, stated the rise of native traders was additionally notable previously yr.
TIN’s Alex Dickson
“Traditionally, entry to capital has been the problem for Kiwi tech firms, however the quantum of funding we at the moment are seeing suggests there has by no means been a extra thrilling time to be a part of the ecosystem,” he stated.
“There’s no scarcity of extremely eligible tech startups in New Zealand, and due to a now vibrant home funding circuit, many can and do discover buy on the early phases. That stated, our funding pool nonetheless stays shallow in comparison with different small, superior economies – the likes of Finland, Eire and Estonia.
“As all the time, Kiwis must work tougher to draw the lengthy arms and deep pockets of overseas traders. 2022 reveals that even a small variety of offshore-backed offers can actually flip the dial for the ecosystem as an entire.”
Dickson stated that whereas software program options proceed to seize the lion’s share of funding, ldeeptech firms secured almost 1 / 4 (22%) of the capital raised, totalling NZ$162m.
“With equally encouraging indicators from healthtech ($71m) and cleantech funding ($27m), there’s an air of sophistication about homegrown innovation at current,” he stated.
“As long as capital continues to fulfill our world-class engineering expertise, and people success tales are exported, there’s no purpose New Zealand can’t compete and win on the chopping fringe of tech.”
Promise for girls in tech
Ladies-led tech raised NZ$3.4 million per deal in 2022, however that’s just a little over half of their male-led counterparts, who averaged $5.2m per deal.
And gender imbalance was equally pronounced with feminine tech founders or cofounders accounting for simply over 1 / 4 (27%) of all capital raises.
However to Aotearoa’s credit score, in terms of established tech, feminine CEOs lead 16 of the nation’s prime 200 exporting corporations by income.
James Pinner, chief funding officer at NZGCP, believes the present financial local weather provides monumental alternative as crises are inclined to end result within the biggest intervals of innovation.
“Now could be the time to create and construct the following era of revolutionary New Zealand applied sciences and the nation has deep sufficient home capital swimming pools to assist this,” he stated.
Nonetheless, Pinner was pragmatic about what lay forward for the funding panorama
“The New Zealand enterprise capital funding area has undoubtedly modified over the previous couple of years,” he stated.
“As we’ve additionally seen globally, the quantity of capital obtainable for funding elevated considerably by means of to 2022 however this seems to have been the height and we’re virtually actually in for a a lot harder few years forward.”
Blair Harrison, head of New Zealand listings at ASX, stated the forecast for Kiwi know-how firms continued to look vibrant, pushed by investor urge for food from Australia, New Zealand and additional afield.
“New Zealand tech firms are effectively revered globally, famend for his or her innovation and extremely expert and integrous administration,” he stated.
“ The pipeline of know-how firms getting ready to record on ASX stays robust and we count on to see New Zealand tech proceed to thrive on ASX over the following few years.”
Digital copies of the 2023 Expertise Funding Report can be found through the TIN web site.