A report from PwC New Zealand and the Angel Association of New Zealand shows IT startups scoring 72 percent of overseas investment in New Zealand startups since 2006.
Software and services scored 48 percent of the total, and technology hardware and equipment 23 percent, well ahead of third placed sector food and beverages with 8 percent of the total.
The report said the proportion of offshore funding in local startups had grown from zero in 2006 to 23 percent in 2018.
Dylan Lawrence, GM investment at New Zealand Trade & Enterprise, said 21 percent of overseas funding came from Australia and six percent from each of East Asia and North America.
PWC partner Anand Reddy said the success of IT startups in securing overseas funding “puts New Zealand on the world stage as a great place to find investment opportunities in innovative startups.”
He said the report, the Young Company Index, presented in the latest edition of PWC’s Startup magazine, showed 23 percent of startups received offshore funding in 2018 with an average round size of $4 million, compared to an average round size of $573k for those without offshore funding.
The chair of the Angel Association of New Zealand, John O’Hara, said early stage companies were on track to receive well over $100 million in new funding in 2019.
Rob Vickery, partner and cofounder of Hillfarrance Venture Capital, said it was very encouraging to see hardware and software companies dominating overseas funding.
“This tells me that New Zealand’s specialism in enterprise and software-enabled hardware will remain a focus going forward,” he said.
“In relation to the average funding amount chart, it is great to see a sharp incline over the last 18 months in the amount raised, per round. This could be showing that New Zealand startups are generating increased enterprise value in their businesses and needing capital for expansion either within their vertical or into international markets.”