Economic Development Minister David Carter today launched a $30 million venture capital fund established by Wellington investment firm MOVAC, saying growth capital is essential to building export-focused, high productivity young companies.
“The global financial crisis has resulted in limited investment activity in the New Zealand venture capital sector since 2007.
“Last year, the Government provided a $40 million underwrite for the New Zealand Venture Investment Fund’s venture capital programme to encourage more private investment into new venture capital funds. MOVAC’s new fund has been able to tap into this new level of support.”
Mr Carter said increasing the level of innovation in the New Zealand economy is one of the Government’s key economic drivers. To date, the venture capital programme is having a healthy economic impact.
“NZVIF has invested into over 100 young technology companies. Of its first 100 companies, the average revenue generated per employee (in venture capital investments) exceeds $240,000 per annum, which is considerably higher than the average productivity levels from New Zealand companies.
“Nearly 80 percent of the companies’ revenues are generated from exports.
“Importantly, through NZVIF, the Government works with private investors to make commercial decisions, not just provide a handout.
“We hope that the establishment of this new growth fund will generate more private investment into innovative young companies and support the continued development of New Zealand’s venture capital industry,” Mr Carter said.