Angel investors provide record funding in 1H 2010

Angel investors provide record funding for young companies during first half of 2010

By Peter Kerr

Sept. 20 (BusinessDesk) – New Zealand angel investors, punting on young companies springboarding to high growth, have put a record $31 million into 35 deals during the first half of 2010.

Cumulatively $160 million has been invested by angel investors, typically high net worth individuals, since 2006 when Young Company Finance begun its index.

“Angel investors are making new investments but also supporting existing investee companies as they grow,” said New Zealand Venture Investment Fund chief executive, Franceska Banga. “As more companies are invested into, more companies are receiving follow-on investments, providing a snowball effect.”

She said there is now a considerable pipeline of young technology companies looking to grow following consistent and significant growth in the angel investment sector in the past few years.

“As these promising young angel-backed companies develop, they need new sources of growth capital,” Banga said. “The challenge for New Zealand’s capital markets is to improve the availability of growth capital to keep building these companies.”

Of the $31.6m invested by angels in the first half of the year, $13.4m was into first round investments and $18.2m comprised follow-on investments.

In terms of the stage of investment, $3.9m was seed investment, $20.5m was at the start-up stage, $4.8m at the early expansion level, and $2.5m at the expansion stage.

Deal flow for the year was maintained at the high level of last year. In 2009, 64 deals were completed. So far in 2010, 35 deals have been completed.

Since 2006, by region, 49 percent has been invested in Auckland, 17 percent in Wellington, 11 percent in Christchurch, 8 percent in Dunedin, 7 percent in Palmerston North, and 4 percent in Hamilton.

Software and services received 27 percent of the amount invested, followed by pharmaceuticals/life sciences technology (26%), hardware and equipment (13%), and food and beverage (11%).

(BusinessDesk)

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