Angels invest a record $53 million in 2010
28 March 2011
2010 has seen record high levels of angel investment activity with more than $53 million invested by angel investors
into young companies, according to the latest Young Company Finance Index.
YOUNG COMPANY FINANCE INDEX
Capital Invested 2006-2010
Year Amount invested Number of deals
2006 $22,360,762 30
2007 $29,300,848 53
2008 $32,656,902 41
2009 $51,105,088 76
2010 $53,791,868 103
Total $189,215,468 303
In the year to 31 December 2010, $53.8m was invested, 5.3 percent more than 2009's previous record high for a calendar
year of $51.1m. Cumulatively, $189m has now been invested into young companies by angels since Young Company Finance
Index began collating data in 2006.
NZVIF chief executive Franceska Banga says that the record level of angel investment activity makes it crucial that new
venture capital funds are established, if the companies receiving angel investment are to continue their growth and
development in New Zealand.
"It is great to see such a vibrant level of angel investor support for promising New Zealand technology companies, but
there needs to be much broader capital markets investment if New Zealand wants to support the growth and development of
its own companies.
"Currently, we are seeing angel investors continuing to invest into companies with follow-on investments. As the
companies grow, they need venture capital funds to come in and provide greater levels of capital, and also the expertise
and contacts to help technology companies take their products and services into international markets.
"New venture capital funds are required with support from institutional investors, if New Zealand is going to be able to
consistently deploy the capital which will keep promising technology companies in New Zealand while they grow and
mature."
Of the $53.8 million invested last year, $23.9 million was into first round investments and $29.9 million comprised
follow-on investments into existing portfolio companies. In terms of the stage of investment, $5.3 million was seed
investment, $39.2 million was at the start-up stage, $6.6 million at the early expansion level, and $2.8 million at the
expansion stage.
The 2010 year also saw continuing co-operation between angel groups with high levels of syndicated deals involving
different groups of investors. In 2010, 47 percent of deals were syndicated and 53 percent were not. In 2006, just 27
percent of deals were syndicated and 73 percent were not. Thirty-eight percent of 2010 investments were structured as
convertible loans, 43 percent as ordinary shares, and 19 percent as preference shares.
Deal flow for the year was high, with 103 deals completed in 2010 compared with 76 the previous year. The last half was
particularly active with 25 deals in the third quarter and 41 deals in the fourth. Average investment amount declined -
$522,000 in 2010 compared with $672,000 in 2009.
Since 2006, by region, 51 percent of angel investment has been in Auckland-based companies, 17 percent in Wellington, 11
percent in Christchurch, 7 percent in Dunedin and 4 percent in Palmerston North. Software and services have received 26
percent of the amount invested, followed by pharmaceuticals (23%), technology, hardware and equipment (16%), and food
and beverage (10%).
ends