Media Release :: Record growth for NZ startups as conscious investment trend emerges
“Emerging companies in this sector promise to transform New Zealand’s economy by increasing labour efficiency, reducing inequality, and driving sustainable economic activity, and we look forward to seeing more ambitious startups become global successes.”
The latest Young Company Finance deal data confirms that 2021 delivered record growth for the number of deals completed and the amount of capital invested in New Zealand startups, with a 63% increase from 2020 in total funds invested.
The deal data, insights and commentary are included in the Startup Investment report, published today by PwC NZ, the Angel Association of NZ and NZ Growth Capital Partners (NZGCP).
Early stage investors provided $257.5m of funding for NZ startups with $88.6m of new capital and $168.9m of follow on capital.
Lisa Douglas, PwC Private Business Advisor and Director, notes that, of the $257.5m funding, $146m (41%) was invested in deep tech startups that are solving problems presented by climate change, sustainability and health inequality.
“This shows the continued focus from investors in deep tech and represents a shift away from software and services, which received 38% of total early stage investment in 2021 (down from 61% in 2020).”
Lisa says that New Zealand has a reputation for efficiency and innovation, and has strong potential to be a leader in climate tech. This requires a focused and well-funded startup ecosystem.
“A mature and resilient ecosystem will also help weather the ongoing effects of the pandemic and political instability that have been creating uncertain conditions in the first few months of 2022,” she says.
Suse Reynolds, Chair of the Angel Association, agrees and adds that while the record level of investment is good news for startups and their investors, unprecedented growth isn’t sustainable in the long term.
“ That’s why we need to keep our eyes on the long-term prize: a sustainable, value-generating ecosystem. It’s inspiring to see venture investment in Aotearoa backing founders to build startups that aim to solve the problems and pain so many people have been suffering – addressing health and social equity challenges and helping tourism to rebound”
Jacques Richer, Associate Investment Director NZGCP, says both investors and founders are seeking purposeful impact in addition to commercial returns, with an increasing focus on solving societal problems such as healthcare, climate change, and food and water security.
“Uncertain economic conditions, political instability, and the reverberations of the pandemic will continue to impact global market confidence, which will flow through to the early stage investment ecosystem in 2022 and beyond. However, the ecosystem has matured significantly, and our hope is that it’s better able to withstand turbulent conditions and continue this growth trajectory.
Notes to editors:
- The full Autumn Startup Investment 2022 report, including Young Company Finance deal data, can be found here
- A classification of NZGCP Young Company Finance deal data can be found here
For media queries please contact:
PwC New Zealand
Mobile: +64 (0)27 2295971 or email: [email protected]
Suse Reynolds, AANZ Chair
Mobile: +64 (0)21 490 974 or email: [email protected]
NZGCP media contact
Mobile: +64 (0) 21 976 119
PwC is dedicated to helping startups with great ideas make their way in the world. We provide support through tailored financial reporting, tax advisory and compliance, structuring, strategic advisory services as well as networking opportunities. We collaborate with others in the local ecosystem including NZTE, Angel Association New Zealand, KiwiNet, and other New Zealand VC funds. Alongside publishing StartUp Investment NZ, we are sponsors of the NZ Hi Tech Awards.
AANZ exists to support the creation of New Zealand born, world changing businesses delivering exponential financial, social and economic returns through mutual support, connectivity and collaboration. AANZ is working to increase the quantity, quality and success of angel investments in New Zealand and in doing so create a greater pool of capital for innovative start-up companies. It was established in 2008 to bring together New Zealand angels and early-stage funds. AANZ currently has nearly 50 members representing over 900 individual angels associated with New Zealand’s key angel networks and funds. Since 2006 over $1bn has been invested in 1500 deals. AANZ works with NZ Growth Capital Partners, PwC New Zealand and a number of public and private sector partners. For more, please visit: www.angelassociation.co.nz
New Zealand Growth Capital Partners (NZGCP) was established by the New Zealand Government in 2002 to build a vibrant early-stage technology investment market in New Zealand. We aim to achieve our vision by supporting Kiwi tech companies, innovators and investors to become world class. Alongside operating our Elevate and Aspire funds which are designed to stimulate private investment into this space through a fund of funds and co-investment model, we also have a market development mandate that includes sponsorship and support of programmes, events and other initiatives to benefit the ecosystem.