Global fintech investment is expected to decline by 4% in 2025, prompting New Zealand investors to adopt a more grounded approach.
Venture capital firm NZ Fintech Fund (NZFF) is prioritising startups with proven domestic viability over early global expansion. “Investors appear to be exercising greater caution amid ongoing economic uncertainty, regulatory shifts, and valuation corrections across the fintech landscape.”
Structural Funding Gaps Persist in the Local Market
Marty Kerr, co-founder of NZFF, highlighted the funding shortfall in New Zealand’s fintech sector. He said the market receives just 50% of the investment seen internationally.
“There was a frustration and a curiosity around why we weren’t seeing the disruption in NZ that I’d certainly experienced in other markets.”
Bridging the Missing Middle in Capital Stacks
NZFF was launched in 2023 to provide support to fintech startups at a stage often overlooked by traditional investors. Kerr noted that fluctuating capital availability created unpredictable conditions.
“That requires a founder to be lucky on timing. I’m a firm believer that actually having a steady stream of capital is way more constructive than having these spikes,” he said.
“We write cheques very intentionally in the hundreds of thousands [of dollars] because that’s the profile in the stage of companies that we’re investing in.”
Filtering for Execution Over Expansion
NZFF takes a disciplined approach, investing in startups with access to local profit pools and clear capital plans. Going global is rarely the focus at the outset.
“We very rarely have a business case predicated on it going global, so we have a real bias,” said Kerr.
The fund prioritises realistic growth models and sustainable business fundamentals. Target areas include digital-only banking, the full lending value chain, infrastructure for open banking, and SME financial services — which NZFF considers “massively underserved” in New Zealand.
Founder Readiness Remains a Critical Filter
Kerr said successful applicants to the fund tend to have a mix of finance and tech capability and a deep understanding of the problem they are solving.
“We have a real bias towards teams that are very clear on what it is they’re solving, they’ve got the main expertise to solve it and then can complement it with anything they don’t have within that team,” he said.
NZFF also maintains a hard line on security. “There’s absolutely no exception for having very secure technology, so absolutely no dice on that one.”
Portfolio Reflects Applied Innovation
The fund’s portfolio includes cybersecurity startup Static Technologies, which Kerr praised for its fraud prevention work. “These guys are super clever. That’s a great example of something I would love to see, at the right time, go global.”
Other investments include eMerge, a digital-only SME banking service, and Wych, an open banking API provider that won Best Pitch at the 2023 NZ Fintech Awards.
Regulation Viewed as a Constraint with Progress
Kerr also commented on the slow pace of open banking reform in New Zealand. “Rather than get grumpy about that… I think it’s getting closer than it’s ever been and it is real.”
He emphasises the importance of data rights: “It’s your data and you should have the right to require people who hold your data to share it…”
User Experience Alone Won’t Secure Market Share
Ryan McQueen of Accenture cautioned that many fintechs focus too narrowly on customer interfaces while ignoring where and how those services are used.
“A lot of them are basically front-end experience type things… Anyone can redesign an experience,” he said.