Start-ups to benefit from funding boost in Budget
A new $300 million fund designed to help fill the "capital gap" for New Zealand companies, and $157 million over four years to support business innovation, were announced in the Government's Budget 2019 today.
Economic Development Minister David Parker says the $300 million fund will utilise a portion of contributions ($240 million) earmarked for the New Zealand Superannuation Fund between 2018 and 2022 and $60 million from the New Zealand Venture Investment Fund's (NZVIF) existing assets.
It will be administered by the Guardians of the Superannuation Fund, and invested by NZVIF through private sector fund managers. After 15 years all funds (including the principal and returns and the $60 million from the NZVIF) will be returned to the Crown to fund superannuation, Parker says.
"New start-ups are well served but mid-sized ones, between about $2 million and $15 million in size, are not well supported," Parker says.
"The world is in the middle of a technological revolution and we need to chase down as many of these commercial opportunities as possible. We also want to increase the amount of technology that gets commercialised and to lift the level of innovation in New Zealand."
Very early stage start-ups will also receive support, with $26 million over four years being allocated in the Budget to "help support, incubate and grow start-ups."
Research, Science and Innovation Minister Megan Woods start-ups develop "unique, world-first, and ground breaking ideas."
"Having sustained support will mean that innovators can more effectively commercialise science and research and turn ideas into products and services that can then be successfully brought to market."
According to a recent global survey on start-ups, the Start-Up Genome Ecosystem Report 2019, New Zealand start-ups are in the "activation phase" of their collective lifecycle. Early-stage funding per start-up is US$279K (average is $284K), and total early stage funding is US$150m (average is $837m).
The $26 million start-up fund announced today is part of a Budget 2019 allocation of $157 million over four years that is earmarked for innovation, "with initiatives to support businesses to become more productive and develop high value low-emissions products."
You can read more about the new funding allocated in Budget 2019 here.
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