Angel investment hits new record with $60m invested in NZ in 2015

New figures from the latest Young Company Finance Index, published by the New Zealand Venture Investment Fund (NZIF), says that angel networks and funds invested $61.2 million into 94 Kiwi companies across 132 deals in 2015, compared with just $56.4 million across 119 deals in 2014 – a 9% year-on-year increase and new record for the New Zealand investment sector.

Chris Twiss, NZIV investment director, says New Zealand now has a “strong core of investors involved in angel networks and funds” which are driving the continued growth of investment into start-ups.

“The last year was noteworthy not just for the high level of investment – hitting over $60 million for the first time – but also that we are now seeing angel-backed companies successfully raising capital from overseas investors - including venture capital firms, angel groups and equity crowdfunding", he says. 

Twiss says that that indicates that New Zealand is increasingly on the radar of international investors looking for opportunities. 

“Offshore investment brings capital and access to networks and markets,” he says, “and widens the shareholder base for companies.”

Though the numbers are heartening, Twiss says that still more investment is needed for New Zealand to remain competitive on the world stage.

“While the activity is at healthy levels, significantly more capital is needed to ensure that more New Zealand companies can become internationally competitive companies of scale. There is also a lot more to do to develop and broaden the investor base in New Zealand, particularly outside the main centres.”

2015 saw $39.4 million investment into the software and services sector, which was a significant increase on the $26.2 million invested into software companies in 2014, and comprised over 60 percent of all angel fund investment over 2015.

Those figures are destined to improve further with last week’s announcement of a new $10m fund - dubbed ‘Tahua’ - which will invest in 25 leading kiwi start-ups over the next three years.

The fund is the work of The Icehouse and ICE Angels and will invest up to $1m per start-up, with the fund already backing its first three. 

One of those start-ups is Nyriad, a computing software company that leverages GPU processors, replacing traditional CPUs, to rapidly compress and stream data. 

Matthew Simmons, CEO of Nyriad, says that the investment and connections offered by the investment will have a profound impact on the company with the Tuhua fund adding "another tier of high networking individuals with a vested interest in [the] company”. 

Tuhua was established in November 2015 with seven cornerstone investors: Ross Peat; Japan’s internet pioneer, Tim Williams; former PWC London Senior Corporate Finance Partner, Richard Burns; software entrepreneur, Dennis Row; The Icehouse CEO, Andy Hamilton; ICE Angels CEO, Robbie Paul, and has now has received investment from a network of kiwi business people including more than 50 ICE Angels’ members. 

For more details from the NZIV report click here