Big players dominate our fintech scene but fast-growing start-ups are plentiful
Fintech is one of the fastest-growing areas of New Zealand's tech scene and generated $1.8 billion in revenue last year.
That's according to the inaugural Technology Investment Network report on the local fintech market, which was based on a survey of the 19 fintech companies that feature in the TIN200 list and 84 early-stage fintech companies based here.
Xero is the behemoth that dominates our fintech scene, with revenue of $849 million last year. Xero and PushPay, both listed companies, together account for over 60% of the sector's revenue. But Invenco and Xplor are also comfortably generating over $100 million in annual revenue and a cluster of innovative fintech players are coming up quickly behind them.
Despite and to a certain extent because of the global uncertainty caused by the pandemic, fintech boomed last year, with revenue up $359 million or 25%. Fintech is a significant export earner, with around $1.5 billion generated in revenue offshore. Australia, North America and New Zealand are our fintech companies' three big markets.
Source: Technology Investment Network
"The continuing growth of cloud-based financial management and payment systems, accelerated by the Covid pandemic, will only serve to strengthen the importance of the New Zealand fintech sector as more tech companies and investors seek opportunities," said Greg Shanahan, TIN's managing director.
Fintech companies are outstripped the TIN companies when it comes to export revenue growth (26% vs 14%), but also in the number of people they are employing. Our fintech companies added 950 people last year in a constrained talent market, an increase of 14%, compared to the TIN200 average of 6%.
Shanahan said major changes in financial regulations globally had proven to be a good business opportunity for innovative Kiwi fintech start-ups.
"The constant flow and high cost of implementing global financial regulations have provided a robust revenue stream for the sector, as well as the potential for further exciting innovation and entrepreneurship," he said.
Auckland-based First AML, a regulatory technology platform that outsources the provision of anti-money laundering customer due diligence services, had revenue of nearly $16 million last year.
Digital economy and communications minister David Clark writes in the report's introduction that he wants to widen consumer choices while maintaining a secure regulatory environment in the fintech space.
"A particular focus for me in this area is establishing a consumer data right, which will empower consumers to unlock the potential of their data, and help the Fintech sector to thrive," wrote Clark, who also holds the commerce and consumer affairs portfolios.
You can download the TIN Network New Zealand Fintech Insights Report here.
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