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MacManus: Mind the tech sector’s funding gap

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  2018 TIN Report by the Technology Investment Network; Photo supplied 2018 TIN Report by the Technology Investment Network; Photo supplied

Just one in ten of New Zealand's top tech companies have received external investment to power more growth. Columnist Richard MacManus finds a glaring gap between angel investment and venture capital.

The 2018 TIN Report was released recently by the Technology Investment Network, and it confirmed the continued growth of New Zealand’s technology sector. Total revenue for the top 200 technology companies (the TIN200) was $11.1 billion, an increase of 11 percent over the past year. Most of that revenue – nearly $8 billion – was in exports, with North America and Australia the biggest markets.

I attended the Wellington launch of the TIN Report last week, where a big topic of discussion was how NZ tech companies can scale up. The report highlighted that tech companies in the $2 million to $10m annual revenue range tend to have “negative profitability” as they attempt to scale up. These mid-level companies also find it difficult to attract talent, due to what the report calls “a highly constrained labour market” here in New Zealand.

These issues, claimed the report, highlight “the importance of New Zealand’s VC and angel markets to cover the profitability gap in companies’ early stages.” Read the full article >