Activity in New Zealand’s venture captail and private equity markets fell off a cliff last year to record just a fifth of the amount spent the year before.
There were just 62 private equity deals worth £61.5 million in 29012, compared to £306 million in 2011.
The figures come from the country’s Private Equity and Venture Capital Monitor which puts the downturn to the fact there were no large deals needing finance.
The decline in New Zealand’s deal-making is mirrored around the world, as the number of merger and acquisitions dropped in many countries.
Industry watchers also point out that the figures were sandwiched by large deals at the end of the previous year and at the beginning of the current year.
Lack of money
The figures also show that New Zealand’s venture capital investments and early-stage funding also took a knock with deals worth £15 million recorded, compared with £20 million in the year previously.
The country also saw mid-market investment decline from £127 million, a high in 2011, to £47 million last year, although investment is returning to pre-2011 levels.
One of the concerns is an apparent lack of money available for firms looking for capital investment of between £1 million and £5.5 million.
However, there’s one big funding deal on the horizon which may create lot of interest in New Zealand.
That’s when technology firm SLI Systems is expected to look for new investors.
SLI Systems is a success story for New Zealand’s burgeoning IT sector. The firm is looking for £8 million in capital via a share sell-off and stock exchange listing.
Key deal ready to go
The Christchurch-based firm, which has the famous London store Harrods among a list of 600 customers, has developed search software which makes finding products and services easier on ecommerce websites.
Founded in the US in 2001 by a group of New Zealand IT experts, a lot of interest is expected when the prospectus is unveiled.
The firm is led by brothers Shaun and Grant Ryan, who graduated from the University of Canterbury. They are looking to spend the money the sell-off raises to fund hiring more marketing and sales staff.
SLI, which stands for ‘search, and learn and improve’, as the software analyses user behaviour, is also looking at expanding into fresh markets and developing new products.
SLI employs around 100 people in its New Zealand, Australia, UK and US bases and the majority of income is earned overseas.
About John Cassidy
