The latest Young Company Finance Index, produced by Venture Capital Association and the Angel Association was released last week showing investment of over $50 million for two consecutive years.
New Zealand Venture Investment Fund chief executive Franceska Banga said the enthusiasm behind software investment is said to have powered the record high.
“The driver of this over the past few years has been the rise and rise of investment in software companies with $26.2m last year and $27.9m in 2013 – around a half of the annual investment. Historically, software companies have attracted about a third of the annual angel group investment.
“This is likely due to the demonstrator effect of companies such as Xero, Orion Health and Jade, along with global trends towards all things digital.
Image: New Zealand Venture Investment Fund chief executive Franceska Banga
Angel investing is on the rise with growing numbers of private individuals contributing their business expertise and money to help small start-ups and this is apparent in New Zealand.
Banga says that in 2014 there was a higher level of ‘new’ investors compared with just ‘follow-on’ investment – $21.3m of new investment compared with 2013’s $10.3m.
NZ Angel Association chair Marcel van den Assum said the number of angel investors joining networks and funds continues to grow.
“We estimate the number of angel investors involved in networks has grown from around 370 to 730 in the past two years,” he said.
He says the growing number of investors contributing to the sector allows individuals to spread their capital across wider portfolios with wider interest and support for innovation and entrepreneurs throughout.
“Angels are riding – and also part of creating – the investment wave”.
Cumulatively, $353.5 million has now been invested into young companies by angel groups since the Index began measuring activity in 2006, when $21.4 millions was invested across 30 deals.