UP: The 2015 TIN100 Report has good news for the NZ tech sector

UP: The 2015 TIN100 Report has good news for the NZ tech sector
The New Zealand technology sector has had a record year according to the 2015 TIN100 Report, released by the Technology Investment Network on Wednesday night.

The report, which charts the performance of the New Zealand technology sector over the last financial year by analysing the performance of the top 200 (by revenue) New Zealand-founded technology companies, says that the sector is up 7% ($609 million) to combined revenues of nearly $9 billion, with a 7.5% growth in exports, up to $6.5 billion.

In 2014-15 financial year, the TIN100 companies (the top 100 companies by revenue) increased their combined revenue by 7.5% to $8.2 billion. TIN100 export revenues increased by 7.5% to $6 billion. The next 100 companies ranked by revenue (referred to as the ‘TIN100+’) grew by 5.6% to $754 million with exports of $492 million, up 8.2%.

Image: Graphic c/o Technology Investment Network

The report shows strong growth in New Zealand’s top ICT, biotech and high tech manufacturing companies across all major export markets, across all technology sectors, and from companies based in all regions across New Zealand.

"We see this as a watershed year,” says Greg Shanahan, managing director of Technology Investment Network (TIN). “Things are shifting up a gear.”

He says that a devalued New Zealand dollar and growth in the US economy have allowed New Zealand tech companies to compete on a global level without forgoing revenue and growth by shrinking profit margins to compete internationally.

“There's a saying, 'In a rising tide, not everything that floats is a boat,' but I think the evidence of the companies growing across markets shows that there's something fundamental happening with a growing cluster of high performance companies," he says.

He also thinks that now they’ve had adequate time to recover, the global financial crisis (GFC) has strengthened the industry as whole. "The companies that survived the GFC had to be very smart,” he says. “So there’s been an attrition process that culled out the under-performers and the survivors are very strong."

Image: Greg Shanahan

The highest category of growth is in financial services technology, which was the eighth biggest category in revenue, but first in both dollar value growth and percentage growth. The 11 financial services companies in the report grew their revenue by a collective $129 million, up 58%. “Everyone knows about Xero,” he says, “but six of the top 20 growth companies were in that category, so it's not Xero alone."

The 2015 report is TIN’s eleventh since it began researching and publishing the annual reports in 2005. Shanahan sees the report as resource for a variety of stakeholders including investors, government agencies and service providers such as law and accounting firms; and a guide for tech companies themselves who use the report to get an overview of their industry, see the metrics of what success in the sector look like, and the business models of those achieving success.

“The objective is to create transparency in the technology sector so the report becomes a tool to foster the sector's growth," Shanahan says. "It's not a competition, it's a piece of quantitative market research."

"New Zealand has a unique advantage by being faster and more nimble and less laden down with legacy. So we've got the opportunity to create a dynamic small community of high performing companies, and if you create transparency around what's working, who's working, then that'll hopefully act as a catalyst to accelerate the process."