Smart Capital Investing in Aotearoa New Zealand’s future

November 29, 2022

With a backdrop of global challenges that need solving, could the recent changes to Aotearoa New Zealand’s visa system be the catalyst to accelerate the development of innovative technologies and economic growth?

In this article, we examine the impact of incentivising migrant investors to take a more active involvement in their investment and what this could mean for New Zealand’s deep-tech sector.  

At the heart of Pacific Channel’s deep-tech investment philosophy is a passion for investing in great people who are solving some really hard problems to create abetter future.

We love what we do. Entrepreneurs are the centre of economic growth and innovation and we’re committed to supporting early-stage entrepreneurs to rapidly scale and innovate their technologies as they build globally successful, category-defining businesses to deliver solutions to some of our most pressing global challenges.

The future of food, health, and the environment are fundamental problems that need to be resolved if humanity is going to go beyond the next 100 years. With people living longer, we need to resolve a range of health-related issues so that we can enable them to live well. At the same time, the exponential growth rate of our global population will have an impact on our ability to produce more food, more sustainably with the existing land we have available, without adding to our emissions. Added to that is the need for clean energy production and reduced energy consumption.

We can’t solve these problems with something developed to make our life easier, nor are they problems that live in a virtual world.These are very real and unless they’re solved, will have a huge impact on our society and humanity.

This is our time to thrive.

New Zealand’s reputation for efficiency and innovation means we are a highly regarded incubator of ground-breaking research and innovation. Pair that with being a desirable place to live and we now have a new migrant visa policy that is aimed at propelling capital to support innovation and a transition to a sustainable high-wage, productive economy.

Our deep-tech sector is flourishing but it’s only just beginning. The calibre of researchers who are developing ground-breaking innovations is phenomenal, demonstrated by the level of deal activity that’s taken, and continues to take, place. PWC’s Autumn 2022 edition of Startup Investment Magazine outlines that in 2021, early-stage investors invested$257.5m in start-up businesses - a record 63% increase on 2020. Of this, 41%focused on deep-tech start-ups, up from 30% in 2020. (1)

The bottom line with deep-tech start-ups, is they need active investment - capital, resource, knowledge and experience. However, the local capital required to support commercialisation success is not infinite– unless, of course, changes are made to accelerate the influx of global capital from international investors.

This is where the introduction of New Zealand’s new Active Investor Plus (AIP) residency visa could play a key role.

Created to appeal to high-value investors who want to do something more than just invest, this new visa category is likely to be a win-win - not just for migrant investors and our businesses but also for New Zealand’s deep-tech sector and all the advantages that come with that.

Attracting active international investors has other benefits beyond injecting new capital. Along with funds, early-stage, deep-tech companies need infrastructure or for want of a better phrase, smart capital; investors who are willing to roll up their sleeves and get involved, who are open to making introductions, imparting knowledge and sharing expertise. We’re talking about experienced, skilled investors, who know what it takes to achieve commercialisation success on the world stage and who are genuinely interested in assisting entrepreneurs, scientists, and researchers to access global networks, exploit international growth markets, and make some tough decisions.

In our view, the advantages of attracting these investors and their smart capital to New Zealand’s ecosystem are almost immeasurable. Ultimately what this Active Investor Plus residency visa will translate to is unparalleled access to global markets and an international network of expertise to help build and scale the companies of the future.

And as our companies go on this accelerated commercialisation journey, the active investment visa complements and supports local capital to accelerate the growth of key export industries and drive the creation of high-wage jobs

This is a demonstration of smart capital at its best.

1. https://www.pwc.co.nz/publications/2019/startup/startup-investment-magazine-october-2019.pdf