The company that NZ start-ups keep
New Zealand start-ups are in the "activation phase" of their collective life-cycle, with the strongest showing in the Agtech & New Food, and Life Sciences sectors. That's according to the Start-Up Genome Ecosystem Report 2019, which gathers independent research from over 300 organisations globally, including the Ministry of Business, Innovation and Employment in New Zealand.
In its one-page snapshot on New Zealand, it cites the reasons to move a start-up to this country as being the ease of doing business (shortest time to start a business, and ranked first in the world for corruption transparency) and the 15% tax credit for businesses investing in R&D. According to the report, early-stage funding per start-up is US$279K (average is $284K), and total early stage funding is US$150m (average is $837m).
As the report notes, New Zealand is the largest dairy exporter in the world, so it's probably no surprise we are strong in Agtech. There have been 40 Agtech start-ups founded since 2013, representing 20% of seed activity by deal value. Meanwhile, the local Life Sciences sector has been boosted by a new $7.1 million biomedical research technology hub being built at the Malaghan Institute at Victoria University. And while these might be the go-ahead sectors, it is a Xero (fintech), and Grinding Gear Games (gaming) that get star billing in the sector summary.
The commentary around the international start-up scene and the assertions made in the report make for interesting reading. It seems the idea of the all-knowing founder is out, and the collective mindset is in, with collaboration the hot new idea in tech. "It's all about community: while one needed to open a laptop to join the tech revolution, to join the Global Startup Revolution, one needs an ecosystem!"
If you were hoping that the next Silicon Valley would be closer to home, then you're out of luck, because it is not going happen - anywhere. "We think there will be no "next Silicon Valley." Instead, there will be 30 "next" hubs, distributed around the world, reaching critical mass driven by either regional (e.g., Singapore in Southeast Asia) or Sub-Sector leadership (e.g., San Diego in Life Sciences)," the report claims.
For what it's worth, the top five start-up ecosystems in the world are Silicon Valley, New York City, London, Beijing, and Boston (in that order). (Boston?).
Building a successful business might be every entrepreneur's goal but, according to the report, only one in 12 succeed in doing so. And those who do make it will battle to ensure they don't come to end of the Start-Up lifecycle too soon. There are apparently seven stages in this lifecycle - Discovery, Validation, Efficiency, Scale, Sustain, Maintain and Decline.
Finally, for those of you keen to give it a go, you could do worse than begin your start-up in one of the hottest sectors, which according to the report are: Advanced Manufacturing & Robotics, Blockchain, Agtech & New Food, and AI, Big Data, & Analytics.
You can read the full report here.
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