Science and Innovation Minister Steven Joyce has announced $15 million of additional funding over four years for two schemes that speed up the commercialisation of new technologies developed by scientists and entrepreneurs around New Zealand.
“Encouraging the development of new export-oriented high-tech businesses is a key part of the innovation stream of the Government’s Business Growth Agenda,” Joyce says.
“We are seeing hundreds of very savvy hi-tech companies from New Zealand now competing and succeeding on the world stage. These programmes are all about filling the pipeline with the next generation of quality kiwi start-ups.”
Joyce says funding for the Pre-Seed Accelerator Fund will increase by $12 million over four years, taking the Government’s total investment through the scheme to $8.3 million per year.
In addition, funding for the development of new Accelerator programmes will be extended following the scheme’s initial three-year pilot, with new investment of $3 million over the next four years.
According to Joyce, both initiatives will form part of Government’s investment in the Business Growth Agenda in Budget 2016.
The Pre-Seed Accelerator Fund supports innovative scientists to turn the results of their cutting-edge research into commercially viable products and businesses.
A recent evaluation estimated that Pre-Seed projects have so far generated $188.2 million in revenue, have resulted in many new companies being formed, and have the potential to generate export revenues of up to $3 billion.
“Making the most of some of the excellent ideas that emerge every day from our scientists and researchers is vital for growing a more high-tech, diverse New Zealand economy,” Joyce says.
“The Pre-Seed fund is one important way of helping that transition, and one which will help generate really high returns for the country.”
Callaghan Innovation’s Accelerator Programme is one of a suite of services to support start-up companies to be investment ready with the pilot programme supporting the formation of early stage digital technology start-ups, typically run over three months.
Of the 38 teams that completed the first four Accelerator programmes, run by Lightning Lab, 18 have so far secured a total of more than $8 million in private investment following the programme’s investment events.
“After seeing positive results from the pilot Accelerator programmes over the last three years, I am pleased to announce that we have decided to extend the funding,” Joyce adds.
“These programmes help entrepreneurs develop innovative companies more quickly and fast-track their business ideas.”
Joyce says high growth start-ups are “key contributors” to the Government’s goals for growing business R&D and exports and making the most of the digital economy.
“The New Zealand economy is rapidly becoming more diverse and more focused on hi-tech innovation,” he adds.
“Our software industry, for example, is growing at nine percent a year, with exports growing at 14 percent annually.”
Last month Statistics New Zealand released their 2015 Business Operations Survey, showing that business spending on R&D grew by more than 15 percent in one year, from $1.25 billion in 2014, to $1.44 billion last year.
“Also last month, the Angel Association reported that angel investors had invested a record $61.2 million into 94 New Zealand start-ups in 2015 - a nine per cent increase on the previous record set in 2014,” Joyce adds.