The 2023 Global Startup Ecosystem Report (GSER) was released at The Next Web Conference in Amsterdam by Startup Genome and Global Entrepreneurship Network (GEN). It shows seven Asia-Pacific ecosystems in the top 30 ranking – with New Zealand making it to the Top 20 for the first time.
New Zealand shot up in the Emerging Ecosystem rankings from previously 31-40 range to #20. It experienced a 29% increase in exits over US$50 million (from seven to nine) and saw the birth of a new unicorn, cleantech Lodestone Energy, valued at $1.3 billion. The GSER includes a section dedicated to New Zealand, “How a Diverse Range of Tech Startups Is Flourishing in New Zealand”.
An annual initiative of Startup Genome and GEN, the GSER is powered by the world’s most comprehensive and quality-controlled dataset on startup ecosystems. Available online from https://startupgenome.com/report/gser2023 the report is informed by data on 3.5 million startups across 290+ global ecosystems.
The Oceania region, mostly featuring New Zealand and Australia, experienced a 152% increase in Series B+ deal amounts, 81% increase in Series B+ deal count, and 60.7% increase in early-stage funding amounts over the period 2018-2022. This is the highest growth of any global region for this period.
Commenting on New Zealand’s role in Oceania’s overall performance, the GSER praised “a culture that emphasises a holistic approach to success that truly incorporates social and environmental good — reflecting honoured Māori principles.”
One GSER excerpt focused on New Zealand trend and contributing factors:
Startup ecosystems can’t succeed without adequate funding. Fortunately, New Zealand has experienced a significant increase in this area in recent years. Between 2020 and H1 2022, the amount of early-stage funding raised by Kiwi startups almost doubled compared to the previous 36-month period.
Part of this funding increase was led by an infusion of capital from overseas investors looking to get a foothold in this emerging ecosystem. In late 2019, Blackbird, Australia’s largest VC firm, introduced an early-stage New Zealand fund which has about $44 million under management as of year-end 2022. Other VCs took a more targeted approach. Finistere Ventures, a Silicon Valley VC, launched a NZ$40 million ($25 million) fund focused on Agtech & New Food startups in partnership with New Zealand Growth Capital Partners (NZGCP).
New Zealand VCs were also able to take advantage of this sudden global investor interest. For example, Icehouse, one of the earliest Kiwi VCs, launched its Sustainable Tech Fund in June 2021 in partnership with SDG Impact Japan.
The New Zealand government also stepped up its commitment to domestic startups. In March 2020, NZGCP launched its Elevate fund-of-funds with NZ$300 million ($186 million) from the New Zealand government, committing NZ$196 million ($121 million) so far into eight Kiwi VCs. Cumulatively, this recent mix of overseas investment and private-public domestic support should help close Series A and B funding gaps that had previously constrained startups.
Katherine Blaney, Managing Director of Global Entrepreneurship Network New Zealand (GEN NZ) said that it was pleasing to see the combined efforts of the New Zealand innovation community being recognised.
“We’re excited to see Aotearoa’s entrepreneurship ecosystem grow and to see that we are showing up in a positive way in some of the measures – certainly from a capital perspective. It’s also powerful to see that 26% of Kiwi founders are female, up from 16% since the 2017 survey,” said Blaney.
Blaney added that there is still plenty of work to be done to harness the full potential of New Zealand’s startup community, something that GEN NZ will continue to work towards. GEN NZ led the creation of a manifesto of policy recommendations for government to assist New Zealand startups in 2020 and will present an updated manifesto in August, prior to the NZ general election.
“We are lucky to be part of such a collaborative and supportive ecosystem and we’ll keep working to improve the conditions for entrepreneurs in Aotearoa,” she said.
The GSER 2023 ranks the top 30 as well as 10 runner-up global ecosystems and includes a top 100 ranking of emerging ecosystems. It also highlights startup communities from a regional perspective, separately ranking ecosystems in Africa, Asia Pacific, Europe, Latin America, MENA, North America, and Oceania.
