The New Zealand government is to provide $NZ100 million in additional investment capital to the state-backed Elevate venture capital fund-of-funds.
The allocation will be included in the National Party’s 2025 Budget next week. The funding will be part of a series of initiatives to back high-growth technology companies with strong export potential.
Finance Minister Nicola Willis announced the allocation in a 13 May pre-Budget speech focused on government measures to boost economic growth through lifting productivity, exports, and encouraging direct foreign investment.
“The short-term goal is to increase start-up funding,” she said. “The long-term goal is to help build a self-sustaining venture capital market in New Zealand in which returns from previous investments fund future investments.”
Willis said $NZ61 million of the funding would come from this year’s contribution to sovereign wealth fund the New Zealand Super Fund, which oversees Elevate, with the remaining $NZ39 million coming from a direct contribution.
She said the Elevate fund, which is managed by government-funded New Zealand Growth Capital Partners, had backed successful companies including Dawn Aerospace, a developer of reusable space planes and satellite propulsion systems, and Halter which produces monitoring and control devices for cattle.
New Zealand Private Capital chief executive Colin McKinnon said: “The new budget for the Elevate Venture Fund will be welcome news for the eaerly-stage funds. The venture sector has shown good growth with the support of Elevate but sustained self-funding is still ahead of us.”
The Elevate team welcomed the funding saying: “Government’s allocation in what are tight fiscal times is a strong endorsement of Elevate’s success in supporting New Zealand’s economic development.
“To date, Elevate has committed $NZ221m across nine funds, attracting $NZ536 million of private capital alongside it. This has gone to investments into 135 growth-oriented start-up companies across New Zealand including Auror, Partly, Foundry Lab, Tracksuit and Mint Innovation. In the past 12 months it has seen capital returned from its underlying funds including Movac, Pacific Channel, and Nuance Connected Capital following meaningful exits, notably of Tradify and Quantifi Photonics.
We’re looking forward to putting this capital to good use backing New Zealanders who are solving big problems, building great businesses and taking on the world.”
The Elevate Fund was launched in March 2020 with $NZ300 million of government funding aimed at helping to fill the Series A and B capital gap experienced by high-growth New Zealand companies.
Image: New Zealand finance minister Nicola Willis. Credit RNZ, Samuel Rillstone.