Tech investment update – Blue skies on the other side of Covid-19
The November 2020 edition of Startup Investment magazine has been released, with promising signs for New Zealand technology investment on the other side of Covid-19.
Unsurprisingly, investment in technology start-ups has taken a hit since Covid-19. The results aren’t as grim as one might think though, a review from PwC and the Angel Association New Zealand finds.
Key takeaways of the Startup Investment magazine include:
- Investment in start-ups since Covid-19 has held up with the deep tech and Software as a Service (SaaS) sectors. Young Company Finance data finds that total investment in deep tech and SaaS has remained fairly stable, with $33.6m invested through to 30 June 2020 – just a 5% reduction compared to last year.
- Deep tech received 25% of total start-up investment during the first half of 2020.
- Investment into deep tech (science-based tech) and SaaS accounts for more than two thirds (42.5%) of total investment by sector.
Drilling down on the role and contribution of New Zealand’s deep tech, here are the key business insights:
Aroa Biosurgery Limited, Phil McCaw, Director –Deep tech can be a difficult pursuit, requiring persistent effort and investment cycles, but there’s great reward on the other side.
Cure Kids Ventures, Caroline Quay, Chief Investment Officer – Deep tech is a long game needing a vibrant, supportive ecosystem. Engagement between investors, government, universities and research institutes helps. Partnerships are enabling deep tech innovations to be developed in months, in contrast to previous matter of years
WNT Ventures, Carl Jones, Managing Partner – Unprecedented excellence is being established compared to 20 years ago, in areas such as industrial waste amelioration, space tech and metal casting. Investment in deep tech is in line with the global trend of impact-investing.
Main Sequence Ventures, Gabrielle Munzer, Senior Associate – Covid-19 has sped up future plans for remote on boarding, linked to the need for food and agriculture deep tech.
Kea Aerospace, Mark Rocket, CEO – New Zealand’s uniquely regulation-free and innovation heavy environment is advantageous, especially with deep tech’s forging of space travel, as shown by leaders such as Rocket Lab, Argo Navis, and Dawn Aerospace.
The Startup Investment report continues with an overview of what deep tech investors consider in their investment decisions. Deep tech has a highly impactful competitive edge across high-value markets.
The strong scientific basis underpinning deep tech, and the IP it generates, is important, in alignment with long-term sector trends of societal, environmental and economic impacts, for example healthcare, sustainability and life sciences. Deep tech is often harder to commercialise than other sectors and has long development lead times, with difficult regulatory barriers to overcome.
Anand Reddy, Partner at PWC comments in the report, “The global pandemic is continuing to have a profound impact on businesses by driving the need to embrace technology, innovate and do things differently.”
Each industrial revolution is powered by the deep tech of its time. Now, using capabilities of computing, the internet and robotics, we are revolutionising the digitisation of manufacturing.