4th March, 2022
New Zealand’s startup statistics reveal the health of the ecosystem, with key metrics trending upwards, demonstrating growth and maturation on par with major players around the world.
When most people hear about New Zealand, the first thing that comes to mind is quality wine, scenic holidays, or the Lord of the Rings – but what many people are not aware of is that New Zealand is the home of an up-and-coming tech ecosystem, with some of world’s greatest startups originating from its shores.
Being a young, small country placed far away from the business ecosystems outside of Oceania, many of the country’s achievements in the tech world are nothing short of remarkable, with some key statistics to back them up.
To start with, it is important to highlight that Aotearoa is a global leader in two key business metrics, making the country an attractive place to launch a startup.
Firstly, New Zealand was recently crowned as the world’s easiest place to conduct business, closely followed by Singapore and Hong Kong.
READ: Startup accelerators in Australia and New Zealand
The Kiwi business ecosystem has also been ranked number one in the world for business transparency – a metric that highlights the lack of corruption that exists in the country overall.
While the Sydney and Melbourne startup ecosystems may be the more well-known leaders of all the Oceania startup ecosystems from a dollar value perspective, a report released by Startup Genome 2021 showed that New Zealand comfortably sat in third place – ahead of the Brisbane, Perth, and Adelaide ecosystems.
Moreover, data released by Tracxn in January 2022 had the count of tech startups in Auckland at 1,634.
In fact, Startup Genome’s report also showed that the entire Oceana startup ecosystem was worth $30 billion, 90 percent of which being concentrated across startups in Sydney, Melbourne, and New Zealand.
Startups can only thrive in environments where access to capital is plenty, and with some major VC investors targeting Kiwi startups, New Zealand has been placed well to see a continued surge in startup success.
It isn’t only VC firms that are interested in Kiwi startups. According to a report released by PwC, the first half of 2021 saw 66 recorded deals and nearly $60m invested by early-stage investors – which was a 60 percent increase in deal volume and an 80 percent increase in dollars invested compared to the same period in 2020.
When considering the activities of both early-stage investors and VCs, it becomes clear that New Zealand is on par with some of the most advanced startup ecosystems in the world.
Perhaps most importantly, statistics have shown that much of the capital that was raised by the Aotearoa startup ecosystem was ‘follow-through’ capital, referring to additional cash injections being made by the same investors into the same startups – demonstrating belief and consistency in the funds being raised.
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Looking at the New Zealand startup ecosystem’s performance from a vertical standpoint, investors appear to be gravitating towards specific industries.
The same report mentioned earlier provided some additional insight into the market share of deal flow across some key industries, highlighting that startups operating in ‘software services’ vertical attracted 44 percent of the total deal flow in the first half of 2021, followed closely by the deep-tech vertical (including pharmaceuticals, biotech, hardware, aerospace, and industrials) receiving 42 percent.
READ: NZ’s first accelerator for women-led startups launches
An interesting statistic highlighted by the report was the gaming vertical, including the development of virtual and augmented reality tools, had been on the rise in New Zealand since the start of the pandemic, highlighting the major potential that lies within that industry as it continues to mature.
New Zealand startups have also been attracting attention for their work on a global scale, with 2021 also seeing the sale of a number of major Kiwi tech startups to overseas competitors.
Seequent, a software company targeting geo-professionals with various solutions across the mining, engineering, and hydrocarbon verticals, was sold to a US-based company for more than $1 billion early in 2021.
And on the very same day, NZ cloud-based point of sale software startup Vend also announced its $455m sale to a Canadian business listed on the NYSE.
According to Vaughan Fergusson, Vend’s founder, the sale of his company was a vote of confidence for the entire NZ tech ecosystem, showing a growing interest shared by the international market in Kiwi startups.
The increase in investment and deal flow, volume of startups, and successful offshore acquisitions, New Zealand’s startup ecosystem appears poised to experience continued growth across the key startup metrics, turning it into a world class technology hub.
With the current stats showing a maturing startup ecosystem, it’s certainly an exciting time to be a Kiwi startup founder.