Angel funding drops 12% in first half, follow-on investment still favoured
New Zealand's angel networks and funds scaled back their investments to $20.2 million in the first half of the year and follow-on funding continues to take the bulk of the investment.
Reporting on the activity of its members tracked by the NZ Venture Investment Fund, Angel Association chair Marcel van den Assum said the money was invested in 29 deals and the split between new deals and follow-on funding was one third to two thirds. That was down 12 percent from the $22.9 million invested in the same period a year earlier, however van den Assum said typically there is a substantial uplift in activity in the second half of the year.
Funding reached a record $69 million in 2016, with software and services taking the bulk of the money. Van den Assum noted annual investment exceeded $50 million for the last four years and grown at an average $5 million a year. Reserve Bank figures show New Zealand households had $117.9 billion invested in unlisted Kiwi companies as at June 30, unchanged from a year earlier.
"The level of deal flow being generated by accelerators such as Wellington's Lightning Lab, the Manawatu's Sprout and Auckland's Flux together with the establishment of new networks this year such as Zino Ventures, Angel Investors Marlborough and Hawkes Bay Angels bodes well for another record year of investment," said van den Assum.
The Angel Association will hold its 10th-anniversary summit this week on Waiheke Island. Ten years ago there were just four angel networks with about 100 members. Today there are a dozen networks operating from Dunedin to Auckland with more than 700 angels contributing capital, connections and expertise to about 100 ventures a year, it said.