New Zealand Private Capital Monitor 2024

2023 saw deal activity return to pre-COVID-19 levels, with $1.99b of combined investments and divestments across private equity and venture capital transactions, weighted heavily towards investment activity. 

Significant transactions included investments in Pushpay, Mint Innovation, Influx Energy Data and Access Community Health.

Total investment activity decreased in 2023 totalling $1,886m compared to $2,949m in 2022. The decrease was driven by top-end private equity (PE) activity cooling down in 2023 (one investment) compared to 2022 (six investments totalling $2,287m). There was a moderate increase in the number of total investments in 2023 (299) compared to 2022 (265), with mid-market PE activity remaining strong.

PE investment excluding venture capital reached $1,501m, compared with $2,630m in 2022 and $1,152m in 2021. 

Venture and early stage investment in 2023 totalled $384.4m, representing a record year, with an increase over the $319.2m achieved in 2022.

Investment in IT / software companies continued the theme seen in recent years, extending access to capital for young companies.

This year’s monitor responses show a clear commitment to growing New Zealand businesses. Focus areas for investee companies have similarities to the prior year and include increased headcount, increased capital expenditure, increased R&D spend and the launch of new products. 

Fund-raising activity in 2023 by New Zealand funds raised over $383m in capital and further fundraisings are anticipated for 2024.

New Zealand capital markets continued to show a low level of activity in 2023 with respect to new listings. The outlook for the next six months remains neutral as a result of current global macroeconomic factors, with levels of optimism increasing in future years.

Private capital remains a significant contributor to the New Zealand capital market eco-system. In the current environment of increased global economic uncertainty, private equity and venture capital fund managers can provide much needed expertise and assistance to founders and managers, as well as additional capital support.

We see private capital continuing to play an important role throughout the coming year, particularly as businesses face continued global geopolitical tensions, inflation pressure and high interest rates. This will see many businesses look to equity to both shore up their businesses and provide for more flexible growth.