The government-backed Elevate venture capital fund is set to receive a $100 million boost in next week’s budget as part of efforts to support high-growth technology companies with strong export potential.
Finance Minister Nicola Willis announced this funding increase during a pre-budget speech highlighting measures to enhance economic growth by improving productivity and exports and attracting foreign investment.
“The short-term goal is to increase start-up funding,” Willis said.
“The long-term goal is to help build a self-sustaining venture capital market in New Zealand in which returns from previous investments fund future investments.”
The $100 million will come partly from $61 million of this year’s government contribution to the NZ Super Fund, which manages Elevate, and $39 million from the government’s capital allowance.
Willis noted that Elevate has supported successful companies such as Dawn Aerospace and Halter.
Dawn Aerospace develops reusable spaceplanes and satellite propulsion systems. Meanwhile, Halter is an agricultural technology firm known for creating smart collars for cattle.
Willis expressed the expectation that Elevate will eventually achieve self-sufficiency, using the capital from previous investments to finance new ones.
“In time, the Elevate fund is expected to become self-sustaining with the returns from previous investments funding future investments. However, the fund is not yet self-sustaining.”
Willis did not provide specifics on additional spending aimed at improving productivity, which she described as low by both historical and international measures.
She also did not outline the measures planned to attract more foreign investment or increase exports.