New Zealand’s largest tech exporters saw slowing growth in the 2024 financial year, with the number employed slipping.
In the year ahead, there’s both promise and peril for our tech firms’ second-largest export market, the United States, as President-elect Donald Trump takes power.
Each year, the Technology Investment Network (Tin) releases a list of our largest tech exporters – the Tin200 – plus stats on trends.
“One of the main features of this year’s report was continued growth of about 8% – but it’s probably one of the lowest levels we’ve had in recent years due to the poor state of the international economy. Towards the end of the year, we saw things picking up,” Tin managing director Greg Shanahan says. Xero, which earlier laid off 800 or 9% of its staff, is among those back on the front foot.
Companies in the Tin200 saw their total revenue grow 7.7% to $17.95 billion – a handy clip but well below last year’s 11.8% and the index’s five-year annual growth rate of 10.5%.
And after 10 years of continuous growth, employment fell by 0.8% to 59,774 as firms like Xero, Majic Memories and Soul Machines restructured for the slowdown (AI pioneer Soul Machines also found itself steamrolled by cheap, capable chatbots as Big Tech commodified its market).
All up, 1936 jobs were shed, balanced in part by Auckland’s Fisher & Paykel Healthcare and Christchurch’s Tait Communications hiring 950 between them.
“The biggest potential impact from the Trump Presidency is tariffs – across anything, really,” Shanahan says.
“The strategy to that is potentially for companies to shift more of their manufacturing into the United States to mitigate that risk, but otherwise it’s a Pandora’s box.”
On the flipside, some Big Tech firms already fear that Trump’s second-term immigration restrictions could lead to another North American talent squeeze. Shanahan says that could have upside for the rest of the world, including New Zealand, where the overall tech labour shortage has eased but there is still keen competition for workers with skills in cutting-edge areas like AI.
“On an encouraging note, we also see growth in second-generation companies. Well-established Kiwi companies have moved past the founder, companies like Tate Electronics [now Tait Communications], Buckley Systems, Gallagher and Trimax are all doing well. So we’re seeing multi-generational success, which is really encouraging. R&D [research and development] investment is well up by about 9% to close to $2b. So some strong investments are being made in the future.”
As interest rates eased, Shanahan said Tin was seeing an uptick in venture capital deals after a tough couple of areas. Green energy firms like Christchurch hydrogen specialist Fabrum were also seeing promising growth.
Shanahan adds, “One of the key things coming through is just the ongoing growth of healthtech and fintech, which have really become the alpha market sectors.” Much of both involved business-to-business markets that were more insulated against downturns than business-to-consumer.
The Tin200′s offshore revenue rose 8.8% to $13.52b. The report says that makes tech NZ’s third-largest exporter after dairy ($23.8b) and tourism, and a nose ahead of meat ($11.0b).
The index is a patchwork beast however, that doesn’t align directly with Stats NZ methodology. A number of firms in the Tin200 are foreign-owned, with most of their economic activity offshore. A case in point is the No 3 firm on the index, Fisher & Paykel Appliances – NZ-founded but now owned by China’s Haier, with three-quarters of its staff offshore and all of its manufacturing in China, Italy, the US and Mexico. It remains in the index by dint of maintaining an R&D crew in Auckland.
On the flipside, the focus on export revenue means a clutch of our largest tech players, all with multi-billion market caps – Spark, Chorus and Infratil (owner of One NZ and half-owner of CDC Data Centres) – are not part of the Tin200. Self-styled “edu-techs” Kami, Education Perfect and billion-dollar valued Crimson – all NZ-based global players – are also absent, although BeingAI, which has a notable percentage of its business outside high-tech in a stable that spans schools to a courier business to software and AI consultancy, does make the cut.
The 10 largest firms by revenue was similar to last year but saw Tait Communications move into the top 10 as its revenue surged to $420m (the only figure in the top 10 that is an estimate, although the Herald understands it is on the money for the Tait Foundation-controlled firm). The Christchurch-based Tait took sole charge of a huge contract – the new Public Safety Network’s Land Mobile Radio Network, previously a joint venture with Crown-owned Kordia – following a “reset” of the project.
Scott Technology – the Dunedin-based maker of freezing works robotics – also broke into the top 10.
The two firms that slipped out of the Top 10 were Livestock Improvement Corporation (11 this year) and Hamilton-based Tomra Foods (the renamed BBC Technologies, after the firm was bought by Norway’s Tomra in 2018) disappeared from the Tin200 altogether, being ruled ineligible for this year’s list. Tomra gutted its NZ staff earlier this year.
Rocket Lab – No 17 this year with $197m – is poised to break into the top five next year, based on its latest revenue guidance issued yesterday, even if the now US-registered, Nasdaq-listed firm will launch its much larger new Neutron rocket exclusively from Virginia.
The highest-ranked firm in the video gaming sector - which had a comeback year in FY2024 on the back of a new subsidy - was mobile game specialist Ninja Kiwi (owned by Sweden’s MTG) at 43 in the TIN200 with its $89.5m revenue, followed by Grinding Gear Games at 47 with its $84.4m revenue (net of a $51.8m dividend paid to its Chinese owner Tencent), followed by locally-owned PikPok at 81 with $42.2m.
Tin’s list of the fastest-growing firms over the past three years includes two on the comeback trail – and then some – after pandemic lockdown era knockbacks: Travel software maker Serko, Gentrack, whose lineup includes software for running airport baggage systems, and the Tourism Holdings-backed Action Manufacturing, whose products include camper vans.
F&P Healthcare put a post-Covid hangover behind it to return to double-digit growth in FY2024 (though was still negative for the three-year period overall).
Windcave also made the top 10 for three-year growth (and was number 9 on the TIN200 overall with $305 revenue). Earlier this year, the firm opened a new 6000sq m manufacturing facility in Auckland to scale up production of its payment devices on the heels of winning authorisation to sell its payment services in the EU.
Departures from the TIN200 included buy-now, pay-later firm Laybuy, which went bust in June and online payments company Xplor, created by the merger of companies including rich lister Murray Bolton’s Transaction Services Group. Xplor, now owned by US private equity firm Advent International, now longer met TIN’s criteria.
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Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
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