Technology as a sector is all about keeping up and keeping ahead. To deliver the right capital solutions, expertise, and connections for our customers we have to do the same. We need to be structured to futureproof our support.
We’re supporting the growth and maturity of our tech offering, by investing in leadership across a number of sub-sectors within the wider Technology Industries. This is where we see opportunity for New Zealand, our existing and prospective customers and us. The first three are FinTech, Climate/Clean Tech, and Emerging Tech – and we’re looking at another four opportunities.
Investment in sub-sectors is a reflection of all we’ve learned since the establishment of our focus on New Zealand’s technology industries within the Growth Sectors team at BNZ, and all that we think we know about the future.
If you can visualise the coming together of oil and water, you’ll have a pretty good idea of what it’s historically been like for tech companies to work with banks.
On the one hand, there’s traditional banking and accounting standards, and on the other there’s the tech sector synonymous with intangible assets, limited financial history, fast paced growth, and the kind of growth spend that limits overall cashflow early on. On the surface of it – risk everywhere through a traditional bank lens.
Eight years ago, when I first stepped into leading BNZ’s technology industries focus, the biggest issue in establishing genuine support wasn’t a lack of opportunity to create solutions and services, it was the expert and organisational knowledge base needed to meet it.
A lot of time and work has gone into getting the right dialogue flowing and interpreting the language between the two worlds, and then the journey has been one of challenging the long-established systems of banking to innovate – fast – to address the needs of the sector.
A supportive hierarchy and a deep passion to support New Zealand to win, in every field, were just the right conditions we needed to innovate and grow our tech sector offering. Fast (by bank standards).
Fast forward eight years and the growth has been strong; we’ve worked closely with over 1,500 financed tech sector businesses and many more on day-to-day banking. We’ve developed a wide range of ways to support them increasingly at every stage of their life cycle, and built financial solutions that are unique to the dynamics and diversity of that market.
And diverse it is, it’s everything from robotics, aerospace, and AI, through to software, NFT’s (Non-Fungible Tokens), through to biology-based businesses and the technology solutions that improve the utilisation of natural resources. There are very different business ecosystems and unit economics that exist for each of them.
The thing they have in common is high growth and potential. This sector overall is expanding at a rate that outpaces any other sector in New Zealand. According to the Technology Investment Network (TIN), New Zealand’s technology sector grew nine times faster than the rest of the economy in the 2022 financial year and has consistently outperformed overall in the New Zealand economy for more than a decade. As this trajectory continues, the different verticals within it will become bigger and more mainstream business markets. Government interest, private investment, capital, and effort are currently fast flowing into multiple sub-sectors, here’s the first three we have tripled down on:
- Emerging Tech
- Climate/Clean Tech
These three sub-sectors now have leadership roles within BNZ, and critically, the investment and support to filter that leadership through, embedding essential knowledge and understanding throughout the organisation. The wider organisation needs to be integral to the sub-sector ecosystem so we can learn and adapt our approach as they evolve and grow.
But the real meaning for us behind this is in our enhanced capacity to accelerate New Zealand’s burgeoning tech sector. We’re supporting the kind of development that creates jobs, delivers economic returns, solves complex business, social and environmental challenges, and helps us as a country to realise the potential of our innovative spirit.
Bringing value to the tech sector
We’ve had a consistent value proposition centred around supporting tech businesses at all stages of their lifecycle through our expertise, connections, and capital. Our sub-sector leader appointments are a large part of our continued investment in expertise and connections to support New Zealand tech companies and complement our progressive capital solutions for tech businesses, including Revenue Based Financing, Project Scale Up, and (soon to be released) Contracted Receivables Financing.
Any views expressed in this article are the personal views of Timothy Wixon and do not necessarily represent the views of BNZ, or its related entities. This article is solely for information purposes and is not intended to be financial advice. If you need help, please contact BNZ or your financial adviser. Neither BNZ nor any person involved in this article accepts any liability for any direct or indirect loss or damage arising out of the use of, or reliance on, all or any part of the content.