Angel investment at record levels

Angel investment at record levels

Angel investing has hit a record level in New Zealand.

The NZ Venture Investment Fund (NZVIF) says $61.2 million was invested last year by angel investor groups. The money was invested in 94 start-up companies.

The average deal size was $464,000, which was lower than the average investment of $490,000 in 2014. But the total funding of $61 million was nine percent up on the $56.4 million invested in 2014.

NZ Angel Association chair Marcel van den Assum says more than two thirds of the investment last year was "follow-on" investment.

He says the data does not capture much of the investment that is going on by individuals outside of the formal angel investor networks.

There has also been growing interest in New Zealand companies from offshore investors, with seven companies raising a combined $14 million from overseas investors.

NZVIF investment director Chriss Twiss says: "That indicates New Zealand is increasingly on the radar for international investors looking for opportunities. Offshore investment brings capital and access to networks and markets, and widens the shareholder base for companies."

Over the past decade $414 million has been invested by the angel networks.

Software and services companies received the largest share of the funding, receiving 39 percent of the seed capital. Money was also invested in pharmaceuticals/life sciences (15 percent), technology hardware and equipment (11 percent) and food and beverage (8 percent).

But there are challenges.

"Significantly more capital is needed to ensure that more New Zealand companies can become internationally competitive companies of scale," Mr Twiss says.

He says there is also a lot more work to do to broaden the investor base, particularly outside the main centres.

Over the past decade 54 percent of the money invested by the New Zealand angel networks came from Auckland. Christchurch and Wellington provided 11 percent of the funding each. Dunedin accounted for six percent. Palmerston North and Hamilton each provided five percent of the money and Tauranga three percent.