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NZ start-ups lean heavily on foreign money

NZ Newswire logoNZ Newswire 19/03/2017 Rebecca Howard
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New Zealand start-ups have the highest percentage of overseas customers when measured against their counterparts from 50 other "ecosystems" including New York, Moscow, Beijing and London, according to the Compass Start-up Genome's Ecosystem Ranking Survey.

The Compass Start-up Genome project team is based in San Francisco and benchmarks so-called start-up ecosystems from around the world.

More than 100 Kiwi start-ups took part in the 2016 survey, according to the Angel Association of NZ, which led the survey here.

New Zealand start-ups reported a high percentage of foreign customers outside their continent at 32 per cent, confirming the fairly small domestic market and, more importantly, the ability to "go global", the survey report said.

"What we are seeing with many of these ecosystems is a function of the small size of their national economies or their geographic locations. Start-ups in New Zealand have a few options beyond Australia, so most of them must go global quickly," it said.

New Zealand start-ups also ranked fifth when it comes to positive corporate interest and involvement with them, at 65 per cent. The global average is 51 per cent.

It also noted that New Zealand start-ups are ranked fifth-to-last in terms of the start-up experience of their growth teams, with only 48 per cent previously having at least two years of start-up experience.

"The challenge for New Zealand is to apply higher levels of capability, capital and connections to those businesses that have real potential to scale and deliver a return on investment to all ecosystem participants." said Angel Association chairman Marcel van den Assum said.

According to the survey, New Zealand's local start-up ecosystem is estimated to be home to 400 to 600 tech start-ups and angel-backed start-ups have proven their ability to scale globally by raising more than $500 million in growth funds.

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