Wellington tech companies benefit from record levels of early-stage investment
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Wellington’s early-stage tech companies are reaping the benefits of the record amount of angel and crowdfunding investment flowing into the tech sector, according to analysis from Technology Investment Network (TIN).
The third annual Investor’s Guide to the New Zealand Technology Sector, published in May by TIN and the Ministry of Business, Innovation and Employment (MBIE), showed record levels of early-stage investment with combined funding from New Zealand-based angel investors and domestic crowdfunding increasing by 35% to $112 million; the first time the figure has topped $100 million (NZVIF and Snowball Effect 2018).
Angel and crowdfunding investment into the tech sector has risen at an annual growth rate of 18% over the past four years.
The rising investment in the New Zealand technology sector is a reflection of its strong performance globally.
The nation’s 200 largest technology “exporters”, the ‘TIN 200’, grew by total revenues of 8% to more than $10 billion for the first time last year.
Wellington TIN companies grew revenues by nearly 11% last year, creating more than 750 new jobs for the tech sector.
According to the New Zealand Venture Investment Fund (NZVIF) figures, Wellington companies received a total of NZ$10.34 million in angel investment in 2017.
The vast majority of these early-stage companies were technology firms that have the potential to be TIN200 ranked in the future.
Wellington received 12% of the total $86.99 million national angel investment funding in 2017, making it the second largest region to receive angel investment behind Auckland.
The annual dollar amount of angel funding received by the Wellington region grew by 476% from 2006 to 2017, at a compound annual growth rate of 17%.
Wellington is not just the headquarters to large, iconic TIN companies such as Datacom, Xero and Weta Digital but also to a new generation of early stage technology companies that are following in their footsteps.
Over the past two years, several Wellington-based companies have each been the recipients of angel funding in excess of NZ$1million, including Regen, Montoux, Conscious Consumers and Signal Corporation.
The recently-published Investor’s Guide also showed escalating foreign investor interest in New Zealand companies, fueled by the strong pipeline of fast-growing tech companies.
The past five years have seen a marked increase in the number of offshore investments being made in NZ tech companies, particularly from the US.
Of the 62 TIN-tracked international investors recorded from March 2013-April 2018, 56% were based in North America.
Wellington-headquartered technology companies in receipt of significant US investment in the past five years include Xero and 8i.