New Zealand’s startup ecosystem is ready to grow more ‘tall poppies’ – TechCrunch

The awkward teenage years bring change, growth, and challenges

New Zealand, a country just under 5 million people, have historically operated under the radar of venture capitalism. A geographically isolated country with “no worries!” A culture and economy based on raw materials, Aotearoa has not yet stood out to investors in the Asia-Pacific region, especially as they may be targeting larger markets in China and East Asia. South Asia.

Investors now see New Zealand as a country with a track record of building companies with global exits in SaaS, healthcare and deep tech. Notable companies and exits such as Xero, Pushpay, Aroa Biosurgery, Vend, Regularly, Wire and Rocket Lab has put local startups on the map, but the scene is still immature and will need steady direction before it becomes a globally competitive ecosystem. That said, all indications are that technology will be New Zealand’s next export, as long as everyone continues to push in the same direction.

“For a while,” said Imche Fourie, co-founder and CEO of Outset Ventures, an Auckland-based deep-tech incubator that invests in seed and pre-seed science and engineering companies. For a very long time, startups in New Zealand raised capital. . “That has changed so much over the past few years in part because the government is taking more initiatives to attract international capital. It’s ridiculous how much money is flooding into the country at the moment. ”

Despite the pandemic, venture and early-stage investment in New Zealand is hitting record highs. In 2020, VC investments totaled NZD 127.2 million (US$86 million), up from NZD 112.2 (US$76 million) in 2019, as the number of transactions nearly doubled from 46 in 2019 to 92 in 2020. According to Crunchbase, the amount Funding raised by New Zealand startups grew by 30%, from around $1 billion to $1.3 billion, from Q1 2020 to Q4 2021. Additionally, in 2020. investment has provided more follow-up capital than ever at 56%, or NZD 109 million (US$79 million), showing a dedication to supporting startups across the country to exit out, according to a PwC . analysis.

New Zealand investors say most of the money comes from international VCs (mainly the US or Australia) or the government. Last March, the New Zealand government kicked off Raise the Venture Capital Fund NZ, a NZD300 million ($203 million) fund program to invest in VC firms to fill the Series A and B capital gap for New Zealand’s high-growth tech companies.

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The new funding signals a shift both in the country’s economy and mindset around diversifying exports and boosting GDP at a time when the cost of living is rapidly becoming unsustainable for many. Kiwis.

House prices in New Zealand are among the hardest to pay for between OECD countries, and a The supermarket is operating exclusively shows that Kiwis spend the fourth most per capita on groceries in the world. Not to mention the banking and electricity dictatorships that run the country. To sum it up, you’ve got a society ready for inequality between rich and poor.

For a resource-constrained country dependent on trade, developing prosperous technology exports may not just be a good idea – it may be essential to survival.

“We have long had a strategic focus in New Zealand of moving away from exporting goods like timber, wool and powdered milk and attracting more value to what we export,” said Phoebe Harrop, a partner partner at Blackbird Ventures, the New Zealand and Australian VC-based facility, told TechCrunch. “Tech startups are the pinnacle of that strategy. And that’s what we should be good at because we have a really good education system and we have an unusual cultural dynamic of people going out and spending time abroad in Silicon Valley, London, Amsterdam, Berlin, get a world-class experience, and then often want to come home and do something here. ”

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