Fintech is New Zealand’s largest and fastest-growing tech-export sector. According to the Technology Investment Network’s second annual Fintech Report, the sector generated $2.64 billion in export revenues in 2023.
The report, unveiled at Amazon Web Services Auckland during NZ Techweek24, offers updated data from TIN’s 2023 New Zealand tech sector survey. It includes insights into longitudinal growth, key markets, investment patterns, and business spending trends.
“NZ’s flourishing fintech sector has been a stallion in sluggish economic times; it’s now the country’s largest tech export sector as well as its fastest growing. A decade ago, fintech revenues totalled about $150m, today we’re talking about a multi-billion-dollar earner, comparable to the wine industry in terms of value,” report author Alex Dickson, stated.
“This rapid growth is validated by interest from global dealmakers, both in terms of investment into the sector and acquisitions. The sector has seen half a billion dollars of investment over the last six years, while eleven of our most bankable multi-million-dollar fintechs have sold offshore in that time.” he added.
According to Dickson, the next wave of innovation will come from open banking, an area where New Zealand is currently about seven years behind the global curve. This had been held back due to the absence of consumer data rights legislation in New Zealand, despite being identified as a priority in 2019.
Minister of Commerce and Consumer Affairs, Andrew Bayly, believes that open banking presents additional opportunities for the fintech sector.
“The future looks bright. Open banking represents a paradigm shift, unlocking the potential for personalised financial services tailored to individual needs. Not only will consumers benefit, but small and medium enterprises will gain access to new products and services that will increase productivity and enable them to grow their businesses.” Bayly said.
Key insights from the report include the following:
- The fintech sector in New Zealand has a ten-year compound annual growth (CAGR) of 32%, which is four times higher than the tech industry as a whole.
- There is a five-year compound annual growth rate of 24%. The sector also grew by 27%, or $554 million, in the year to June 2023.
- 84% of revenue was generated overseas in 2023, for total export revenue of $2.2 billion, up 28%, or $485, from the year prior. Growth was fueled by strong performances in key markets: North America (up 26%), Europe (up 29%), and Australia (up 30%).
- Total fintech revenue has increased from $160 million in 2013 to $2.64 billion in 2023.
- The number of Kiwi fintech firms with more than 5 million in revenue has more than tripled to 23 over the same period.
- More than half of the sector’s 8,857 employees are employed overseas, with hiring now outpacing local recruitment by more than 3:1.
- In the past six years, eleven multimillion-dollar New Zealand fintech firms have been sold to offshore interests. These include SLI Systems, FNZ, TALKINGTECH, TSG, Unimarket, Timely, Vend, Plexure, Hatch, Invenco, and Pushpay.
- New Zealand reached a peak in fintech investment with $186 million in 2022. However, funding plummeted by 89% to $21 million in 2023 as the number of deals halved. Of the $372 million in total capital raised over the past three years, $224 million came from deals led by offshore investors.
- Fintech firms allocate 20% of their total revenue ($517 million) to developing new products, services, and markets, double the tech industry’s average of 10%.
The 2024 New Zealand Fintech Report is sponsored by Xero, Worldline, Knobbe Martens, University of Waikato Management School, and Altered Capital.
Get a copy of the full report here.