Published on the 01/03/2023 | Written by Heather Wright

Keas helping Kiwis…

The Kiwi technology sector is continuing to aggressively target international expansion if the latest Kea Connect Restrospective report is anything to go by.

The annual report, which looks at Kea Connect projects for the past year, shows technology accounted for a quarter of all projects for the organisation last year slightly down on last year’s 31 percent, with North America at key focus.

Combined with services, food and beverage and consumer goods, it accounts for 71 percent of projects.

“After three years of disrupted supply chains, the nimble weightless economy has become more important than ever.”

Kea connects Kiwi businesses, providing assistance to those wanting to grow their business offshore via a global expat network.

Technology is, of course, already New Zealand’s second largest export sector, second only to dairy, with $11.5 billion in exports last year – amounting to 75 percent of its overall revenue coming from exports in FY22 according to TIN.

Kea’s report notes that after three years of disrupted supply chains for traditional businesses, the nimble weightless economy has become more important than ever for New Zealand’s economy.

The report shows the bulk of tech projects were in software and platforms, accounting for around 50 projects. All other sectors logged around 10 or lower, led by healthtech, AI, edtech, fintech, agritech, cleantech, cybersecurity and tech/sci research.

North America dominated when it comes to the regions Kiwi companies were seeking connections to, at more 40 percent – double second placed AusPac, at 20 percent. Europe rounded out the top three at 18 percent. That’s something of a change from last year, when East Asia and AusPac led the charge, with North America following.

Across the board, pandemic impacts, and the reopening of the world, have played a big role in this year’s figures, with the number of Kiwis seeking connections to China, the fourth most in demand market last year, dropping significantly given the inability to visit the country. (China doesn’t feature when it comes to regions tech companies were seeking connections to last year. It was also a weak region for the sector last year, along with Latam.)

The launch of Air New Zealand’s direct Auckland to New York flights in September, and the recommencement of the Auckland to Houston run in July boosted North American activity for Kiwi businesses, with North America ousting Europe as the top region Kiwi exporters were seeking connections to.

Europe, at 28 percent versus North America’s 31 percent, wasn’t far behind however, with the conclusion of both the NZ EU Free Trade Agreement and the NZ UK Free Trade Agreements providing new clarity, post Brexit.

Australia (16 percent) continued to be a strong player, followed by East Asia (6.3 percent), Greater China, which includes Hong Kong and Taiwan (2.9 percent) and India, Middle East and Africa (2.5 percent), alongside NZ (13.4%).

Kea, which gets government funding from agencies including NZTE, MBIE and MFAT, as well as corporate partners, says connection requests fell largely in line with New Zealand’s top 10 trading partners, with only South Korea and Thailand (New Zealand’s fifth and tenth largest trading partners, respectively) not featuring in requests.

For the first time Japan, Hong Kong, France, Malaysia and Indonesia entered Kea’s top 10 countries, with five to nine projects each during the year.

Local companies are also looking outside the norms for their next potential market. One case study included in the report notes a tech company with an opportunity to work with a development bank on a project to implement their emerging technology into Bhutan.

Kiwi businesses are also being pragmatic in their expansion plans, with the majority (82 percent) honing in on a single country to target. Just 4.4 percent were using Kea Connect to explore four or more countries concurrently.

And as to what Kiwi tech companies are seeking international connections for, Kea has previously noted that tech sector businesses research potential markets early and are hungry for connections, consumer insights and exploring partnerships right from pre-revenue stage.

Last year, when 130 ‘solvers’ (Kea members providing support) were connected to 102 tech businesses, was no different, with the desire to build industry networks far and away the biggest driver for connections, followed by market validation advice.

Demand for capital and investment advice is on the up, accounting for just shy of 10 percent of all tech connections, up from just 3.6 percent last year, though there’s no mention this year of actually seeking capital and investment. Hunting out channel partners or distributors is also a focus.

Among the tech companies seeking assistance was digital communications platform V-Unite, which says it was looking for ways to make its product stickier by identifying specific problems target customers were having around customer onboarding and sales processes. It was also looking to learn from other software companies about scaling into the United States and other markets.

CEO Stephen Handisides says Kea Connect was ‘invaluable’ in getting advice and connections.