The government has identified support for New Zealand's fledgling venture capital industry as a “next step” towards boosting innovation.Economic Development Minister Gerry Brownlee today announced a $40m underwrite for the New Zealand Venture
The government has identified support for New Zealand’s fledgling venture capital industry as a “next step” towards boosting innovation.
Economic Development Minister Gerry Brownlee today announced a $40m underwrite for the New Zealand Venture Investment Fund (NZVIF)’s programme to encourage more private investment into new venture capital funds.
Since NZVIF was established in 2002, New Zealand governments have committed $160m to its venture capital programme. That $160m is nearly fully committed across six existing and two prospective venture capital funds.
The $40m underwrite will enable NZVIF to invest into a number of new funds based on returns from current investments, up to a total of $200m.
Mr Brownlee said that risk capital was essential to help innovative companies develop and prosper.
“We have a developing venture capital sector but building it further requires continued government backing in order to attract more private capital.”
Between 2003 and 2009, NZVIF invested about $75m through six venture capital fund managers into 48 young New Zealand companies.
Those companies went on to raise a cumulative total of $438m and earn $675m in revenue – including $564m from exports. Combined company revenue grew by 56% in the three years to 2009.
Mr Brownlee said that the government expects to see a return from its venture capital investment.
NZVIF only invests in venture capital funds which have been successful in raising matching capital from private investors. It is able to invest up to $25m per fund.
Examples of companies supported by NZVIF’s venture capital programme can be found here.
