PAUL MCBETH: Venturing further than we realise

Paul McBeth is the editor of The Bottom Line and Curious News, and previously worked at BusinessDesk for 15 years.

The curse of being a relatively young country is that New Zealand is always in a hurry.

When the results don’t immediately emerge, there’s a propensity for wannabe strong leaders to toss out seemingly failed decisions of the past, simply because they didn’t have the patience for the evidence to emerge.

Probably not a bad moment to reflect on the wisdom of the old Mainland cheese ad that good things take time.

Take a recent joint report by government venture fund manager NZ Growth Capital Partners and venture capital intelligence platform Dealroom.co showing the nation’s tech ecosystem is worth $152 billion, compared to just $4 billion 10 years ago.

Venture capital has fuelled an explosion of wide-eyed startups, with more than 400 attracting smart money players and accounting for $133 billion of that enterprise value. Admittedly, a lot of that is tied up in two of the more staggering success stories that New Zealand’s produced in the past decade or so: space pioneer Rocket Lab and financial services backend developer FNZ.

It’s easy to get swept up by the big numbers held in the billion-dollar unicorns, like Xero, Seequent, and Halter, but one of the hidden values of building those burgeoning sectors is the spinoffs.

We are young, we run green

If you hark back to the late-2000s and early-2010s when Wellington was still riding high – and your correspondent was firmly ensconced in the capital – the likes of Trade Me, Xero and Weta Digital were throwing off entrepreneurial sorts like nobody’s business, and Wellywood was developing something of a Silicon Welly feel to it.

Building those communities is vital in getting the lifeblood flowing. Bail up a founder for 15 minutes and the conversation will invariably move to the generosity of their peers in spitballing and sharing ideas in what can be a lonely existence while they stare into the void of the unknown, adamant that they can shape a small portion of it.

And as Chris Lee & Partners chair James Lee recently opined, stock exchanges are simply a scoreboard of how economies are tracking. Silicon Valley didn’t thrive because it had the Nasdaq, rather the Nasdaq surged because Silicon Valley transformed into a self-generating money magnet.

GD1 co-managing partner Vignesh Kumar reckons that domestic entrepreneurial flair is bearing fruit, pointing to rapid growth of New Zealand’s aerospace sector – anchored by Rocket Lab – or the marine engineering talent that’s been the bedrock to the on-water success of the likes of Team New Zealand or the more recent electric hydrofoiling vessels that Vessev is creating.

As Kumar says, it takes time to build a buoyant tech community that can sustain a vibrant venture capital sector to match those smart ideas with the money and global connections to get one plus one to equal three.

That might be cold comfort for those of us who want to see our leaders doing something. Given it’s been 15 years since the late Paul Callaghan’s challenge to foster a growing cohort of entrepreneurs to help lift the nation’s economic fortunes, we could probably do with fewer Chicken Littles crying that the sky is falling.

Go back to the top 10 tech companies from the TIN 100 report that Callaghan showcased back in 2011, and you’ll see Fisher & Paykel Appliances, Datacom, F&P Healthcare, engineering firm NDA, Tait Electronics, air conditioning maker Temperzone, Gallagher Group, Douglas Pharmaceuticals, Rakon and kitchen equipment maker Moffat.

In 2025, that cohort was topped by Xero, followed by the two F&P companies, Datacom, Rocket Lab, Tait, Wētā FX, Gallagher, payments firm Windcave and Pushpay.

We are strange in our worlds

As Callaghan said back in 2011, New Zealand excels in the weird and wacky niches to create real value. Back then, those top 10 companies generated $5.62 billion of revenue in inflation-adjusted terms, compared with $8.7 billion reported by the 2025 group.

Those are real gains in much the same way that our businesses are devoting more money to investing in research and development – $4.1 billion in 2025 compared to an inflation-adjusted $1.47 billion in 2010, before Callaghan laid down his challenge.

And more are on the way.

We’ve all seen the rise and rise of virtual fencing firm Halter as it cracked the fabled unicorn status, and followers of Rangatira Investments will be up to speed with the global aspirations of Magritek, the high-tech manufacturer co-founded by Paul Callaghan whose products measure the chemical properties of substances.

Meanwhile, cancer treatment firm BioOra is out raising $45 million in what it envisages will be its last capital raising before going public late next year or early 2028, and NZ Clinical Research reportedly cracked the billion-dollar mark with the looming arrival of global private equity firm Advent International as a majority shareholder later this year.

Those firms and their founders are currently linked up to the likes of private equity and VC funds, but the other thing to bear in mind is that many of those investment entities aren’t forever homes. Those funds’ investors need their own exit at some point, contributing to that virtuous cycle of investment begetting ever more investment.

Got some cash, bought some wheels

It’s only a matter of time before they start to emerge in more retail-investor-friendly products. We’re already seeing the likes of Harbour Asset and JBWere’s clients getting a look into the GD1’s latest fund, while Generate’s KiwiSaver members have been foundational investors for Icehouse Ventures’ newest offering, and Pie Funds turned to Altered Capital for some extra juice.

One of the lessons we keep failing to appreciate is that the money they get doesn’t just disappear when our founders sell something. It inevitably gets put to use elsewhere.

Sure, a few toys might get bought along the way, but a big payday from a foreign multinational tends to lead to that cash getting spread a little further than the inside of one not-so-little organisation.

Sam Morgan, Rod Drury, Vaughan Fergusson and others haven’t simply withdrawn to a mystical cave where tech founders go to quietly observe a future without their input – they continue to get involved in projects that pique their interests.

New Zealand’s tech community has hit its stride in recent years, and the flywheel is really starting to get going.

It just might be that patience is actually a virtue.

Image from Annie Spratt on Unsplash.