New Zealand has created a new unicorn - a privately-owned startup company worth more than $1 billion - each year for the past five years, including Rocket Lab, Xero and Pushpay. Photo / supplied
New Zealand has created a new unicorn - a privately-owned startup company worth more than $1 billion - each year for the past five years, including Rocket Lab, Xero and Pushpay. Photo / supplied
COMMENT
When the Reserve Bank held the official cash rate last week at its record low of 1 per cent, there was plenty of commentary about whether there has ever been a better time to borrow money.
I can't speak for homeowners, but I do believe that there has never been a better time to launch your own tech start-up in New Zealand, especially if you want capital investment to make that business grow and grow.
That's not just because investors around the world are looking for great businesses to support; it's also because New Zealand's reputation as a country that develops high-quality tech companies has never been stronger.
At New Zealand Trade & Enterprise (NZTE), we're fortunate to work with more than 1200 tech companies, particularly my team, which is charged with helping Kiwi businesses prepare for investment, and then matching those businesses with the right investor, whether that is in New Zealand or from overseas.
We have 50 investment professionals based here and around the world, and over the past four years they have helped New Zealand tech companies attract investment that will deliver more than $1.9 billion of economic benefit to our country.
Our tech sector is now the country's third largest export sector, earning more than $12 billion in revenue last financial year, according the latest TIN200 report.
Incredibly, New Zealand has also created a new unicorn – a privately-owned startup company worth more than $1 billion – each year for the past five years, including the likes of Rocket Lab, Xero and Pushpay.
And we continue to see more and more great companies begin on this path: 40 per cent of the tech companies we work with most closely are growing by more than 40 per cent each year. All those we have taken on board in the past two years are growing at more than 100 per cent.
These are companies such as Dotterel, which is reducing the noise pollution from drones. With our support, they have had two rounds of capital investment, worth more than $1.6 million.
Or AskNicely, a really clever software platform to capture customer feedback. They've received nearly $7m in capital from investors like Blackbird Ventures, an Australian venture capital fund that has now opened an office in New Zealand.
It's not just the interest of venture capital funds that tells us how successful our tech entrepreneurs are becoming. When you see the likes of Apple acquiring and expanding PowerbyProxi, Microsoft acquiring GreenButton, or Booking.com investing in Serko, then you know that this is recognition that New Zealand is producing great technology, and great tech businesses.
What has changed to produce this kind of momentum? It's all about an ecosystem – a business community that supports and inspires each other, with back-up from professional specialists and government agencies such as NZTE.
We believe a successful ecosystem is driven by four Cs. First, "culture". New Zealand has a long-standing culture of innovation, from Bill Gallagher and the first electric fence to Peter Jackson and Richard Taylor and their transformation of movie-making through Weta Digital.
Remember we were the first country in the world to pilot Eftpos. It means it's very easy to create a start-up here.
Second, our "capability" is increasing. We're starting to see multiple founders now on to theirsecond start-up, or those who have successfully sold their business become mentors for new companies, people like Serge van Dam and Scott Houston.
Next, "connectivity". NZTE is at the forefront of connectivity to the rest of the world, and our international offices are seeing more of our tech companies being thoughtful about which markets they target, and then coming through with greater regularity, building those networks and connections.
Finally, "capital", which is the investment to help grow your business. Because those first Cs are so strong, we're now seeing more capital flowing into our tech sector.
What it all means is that you can grow a global business in technology from New Zealand. That doesn't mean that it's easy to secure investment, though, even with the Government's welcome announcement of a new $300m boost for start-ups, available through the New Zealand Venture Investment Fund (NZVIF).
We find the companies that are successful in growing offshore are well prepared, they have the basic disciplines of business right, they're thinking two to three capital rounds ahead, and they're realistic about the costs, resources and time required.
NZTE aims to support businesses with that preparation. We have a website devoted to investment, we're developing an online learning platform so businesspeople can understand what it takes to be successful, and we have a database of approximately 2300 investors that we're connected to.
Dylan Lawrence. Photo / supplied
So, as we close out this decade and look to the 2020s, I have no doubt that, as a sector in New Zealand, tech will continue to grow and develop.
It is exciting for New Zealand, and a great opportunity for any young person who's ever dreamed of creating a startup and taking on the world. Now is your time.
