The ecosystem of New Zealand startups on the verge of producing more “tall poppies” – TechCrunch
Tough teenage years bring change, growth and challenges
New Zealand, a country of just under 5 million people, has historically gone under the venture capital radar. A geographically isolated country with a “no worries!” A culture and a commodity-based economy, Aotearoa did not stand out with investors in the Asia-Pacific region, especially when they could target larger markets in China and Southeast Asia.
Now, investors see New Zealand as a country with a proven track record of building businesses with global releases in SaaS, healthcare, and advanced technology. Notable companies and releases like Xero, Pushpay, Aroa Biosurgery, Vend, Seequent, Halter, and Rocket Lab have put local startups on the map, but the scene is still immature and will need stable direction before it becomes an ecosystem. globally competitive. That said, the signs are all pointing to technology as New Zealand’s next export industry, as long as everyone keeps pushing in the same direction.
“For a very long time, New Zealand startups were clamoring for capital,” said Imche Fourie, co-founder and CEO of Outset Ventures, a high-tech incubator in Auckland that invests in start-up science and engineering companies and pre-boot. . “It has changed so much in recent years, in part because the government has taken more initiatives to attract international capital. It’s ridiculous how much money is pouring into the country right now.
Despite the pandemic, venture capital and early-stage investments in New Zealand are reaching record levels. In 2020, venture capital investments totaled NZD $ 127.2 million (US $ 86 million), compared to NZD $ 112.2 million (US $ 76 million) in 2019, due to a near -double transactions, from 46 in 2019 to 92 in 2020. According to Crunchbase, funds raised by New Zealand startups increased by 30%, from around $ 1 billion to $ 1.3 billion, from Q1 2020 to Q4 2021. Additionally, in 2020, investors provided more follow-up capital than ever before at 56%, or NZD $ 109 million ($ 79 million), which shows a commitment to supporting startups until their exit, according to a PwC analysis.
New Zealand investors say most of the money comes from international venture capital firms (mostly US or Australian) or the government. Last March, the New Zealand government launched the Elevate NZ Venture Fund, a NZD $ 300 million (US $ 203 million) fund of funds program that invests in venture capital firms aimed at bridging the gap. Series A and B equity capital for high growth New Zealand technology companies. .
I don’t think it’s reasonable to expect the next Microsoft to be headquartered in New Zealand. But the next Microsoft could have offices here, and it could still be founded by Kiwi. Rocketlab CEO Peter Beck
The new capital signals a change both in the country’s economy and in the mindset about diversifying its exports and boosting GDP at a time when the cost of living is quickly becoming unsustainable for many Kiwis. .
House prices in New Zealand are among the most unaffordable among OECD countries, and an active supermarket duopoly has made Kiwis spend the fourth highest number per capita on groceries in the world. Not to mention the banking and electricity oligopolies that run the country. All in all, you have a society prepared for wealth inequality.
For a country with limited resources that depend on trade, developing thriving technology exports may not just be a good idea – it may be a necessity for survival.
“We have long had a strategic focus in New Zealand to move away from exports of commodities like wood, wool, powdered milk and attract more value for what we export,” Phoebe Harrop, Partner at Blackbird Ventures, a New Zealand and Australian company. based on VC, TechCrunch said. “Tech startups are the pinnacle of this strategy. And that’s something we should be good at because we have a really good education system and we have this unusual cultural dynamic of people going out and spending time abroad in Silicon Valley, London, Amsterdam, Berlin. , gaining world class experience, and then generally wanting to come home and do something here.