Change at the top as NZ’s largest high-tech exporters named

The Technology Investment Network's ranking of our largest high-tech exporters, by revenue, for the 2017 financial year

TIN200 high-tech companies 2017 highlights

• Exports: $7.35 billion (+8.5%)
• Total revenue: $10.00 billion (+7.9%)
• Employees: 43,000 (+11% or 4352 new jobs)

Datacom, owned by NBR Rich Lister John Holdsworth, knocks F&P Appliances from its perch in the latest TIN100 list of our largest high-tech exporters.

Technology Investment Network principal Greg Shanahan says it’s the first time in 13 years that F&P Appliances has not occupied the top slot.

The TIN boss says another standout this year is Queenstown-based Magic Memories, which has built a global business taking photographs at tourist attractions. Over the past year, it has built its revenue 137% to $154 million through its acquisition of US theme park market leader Sharp Shooters. The purchase price was not disclosed but, with 2000 staff, Sharp Shooters was a substantial operation. Magic Memories backers include Pioneer Capital (whose 20% stake makes it the largest shareholder), its chief executive John Wikstrom (who earlier described his growth strategy to NBR as “R&D by M&A”), Milford Asset Management and Craig Elliot, the US tech industry figure who has property investments around Queenstown and Wanaka.

Pushpay received the inaugural “TIN Rocket” award for the biggest jump in rank as it jumped 63 places to number 45. The mobile payment company, which has been particularly active in the US faith sector, recently reported its annualised committed monthly revenue (ACMR) had nearly doubled to $US67.5 million. Chief executive Chris Heaslip says it’s on track for cashflow breakeven by the end of 2018.

TIN's fastest growing high-tech exporters of 2017, by revenue increase

Boom year
Overall, it was a boom year for TIN200 companies (the TIN200 being the NZTE and Callaghan Innovation-backed project’s wider list).

Total high-tech exports rose 8.5% to $7.35 billion, meaning high tech now accounts for roughly 10% of New Zealand's exports. To put that in context dairy exports were $13.6 billion last year; tourism generated $11.8 billion from offshore, sheep and beef $7.4 billion, forestry $4.88 billion and wine $1.66 billion.

A jump in exports to the rebounding US economy accounted for about half of TIN200 growth, Mr Shanahan says, although Australia remains New Zealand's largest market. Europe also features strongly. High-tech exports to Asia lag, in part because software companies find it harder to crack non-Engish speaking countries.

This year, TIN introduced a new list of Maori high-tech companies, defined by a Maori founder, chief executive or substantial iwi investment. It was topped by Waikato Milking Systems, with $93 million revenue. 

Total TIN200 revenue rose 7.9% to top $US10 billion for the first time.

And the number of staff employed by TIN200 companies worldwide increased by 4352 or 11% to more than 43,000.

Without those sort of numbers, the impact of any changes to the high-tech sector are now being felt through the entire economy, Mr Shanahan says.

TIN100's list of the emerging companies with the largest revenue increases. Sometimes big revenue increases go hand in hand with broader success, as with Syft. But the publicly-listed GeoOp and Pacific Edge have struggled recently.

More profits going offshore
The only wrinkle is that the number of TIN200 companies that are foreign-owned continues to increase. Last year it was 31. For the 2016/2017 financial year, with fruit sorting company Compac sold to Norway’s Tomra for $70 million, it rises to 32.

Rocket Lab founder Peter Beck was guest speaker at the TIN announcement last night in Auckland.

His company, with its $US1 billion private equity valuation is undoubtedly a success story for New Zealand – it has created 200 high-value jobs, most of them in Auckland, and created a whole new local industry – these days it is registered in the US, and US heavyweights like Lockheed Martin and Khosla Ventures feature on its share register (along with the likes of founder Peter Beck and Sir Stephen Tindall’s K1W1).

So what makes a “New Zealand” company?

“TIN200 companies have to originate in New Zealand; they’re in ICT, high-tech manufacturing or biotechnology; they have at least 10% of their revenue sourced from outside New Zealand and they still maintain a strong presence in the country,” Mr Shanahan says.

“So, if companies are bought and they move their core operations offshore and they no longer have a significant presence here, they’re no longer in the report. But we still include companies that are majority foreign-owned.”

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