New Zealand Early-Stage Investment: a Record Year

New Zealand Early-Stage Investment: a Record Year

The New Zealand Venture Investment Fund (NZVIF) has released their latest figures on early-stage investment in New Zealand, highlighting a flourishing industry. 2015 saw a record year in terms of investment volume and international interest in Kiwi companies.

At $61.2 million, 2015 saw the highest level of investment in early-stage companies on record. Up from $56.4 million the year earlier, New Zealand is now demonstrating a strong base of angel investors and venture funds. Last year’s level of investment is three times the amount in 2006, clearly illustrating the significant growth the industry has seen.

International interest on the rise

A highly encouraging sign is the increased level of foreign investment in New Zealand enterprises. Four companies raised a total of $7.2 million from overseas venture capital firms and a further three companies secured $7 million from overseas angel networks. Equity crowdfunding is also playing a part, attracting significant investment from across ‘the ditch’.

“…New Zealand is increasingly on the radar for international investors looking for opportunities.  Offshore investment brings capital and access to networks and markets, and widens the shareholder base for companies.”

- Chris Twiss, Director, NZVIF

Internationally investors are savvy and discerning, this level of international interest demonstrates the reputable and coveted position New Zealand companies enjoy. Offshore investment provides our market with extra liquidity and expertise, and brings breadth to our investor base.

“The market for capital is global and these results illustrate that New Zealand companies are internationally competitive.”

- Marcel van den Assum, Chair, NZ Angel Association

Equity crowdfunding's role

Equity crowdfunding’s arrival in 2014 has been welcomed by companies and investors alike, and has been responsible for significant levels of investment in the industry. In 2015, four companies raised $3.1 million in funding through equity crowdfunding platforms, from New Zealand and abroad.

The two years with the highest levels of early-stage investment over the last decade, directly correspond to period where equity crowdfunding’s been in existence in New Zealand. As the fintech market matures and equity crowdfunding becomes more mainstream, we believe this area will begin to dominate angel investment and venture capitalism.

Where was it invested?

Of the $61.2 million worth of investment in 2015, 60% went to the software and services sector. This figure was lower over the period of 2006 to 2015, with software companies receiving only 39% of total early-stage investment. 2015’s increase illustrates New Zealand’s increasingly active and growing technology industry.

The next largest sectors were pharmaceuticals, technology hardware and equipment, and food and beverage. Unsurprisingly, Auckland dominated the investment landscape, scooping up 54% of the total funds; Christchurch and Wellington received 11% each.

What is NZVIF?

The NZVIF was a government initiative, established in 2002 to encourage early-stage investment in New Zealand. The $300 million under management are invested through venture capital funds and angel investors.

That’s it from us, stay tuned for further updates on developments and trends in the industry.

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