TIN200 reports $1b+ in tech sector growth

Published on the 25/10/2018 | Written by Heather Wright


TIN Tech 2018 awards

Industry trajectory has number one in its sights…

New Zealand’s top 200 tech companies logged their second year of more than $1 billion in revenue growth last year, hitting $11.1 billion in total revenue – with the growth spread across New Zealand.

“One of the most important things is that the growth is spreading across the entire country – it’s not just an Auckland phenomenon,” said Greg Shanahan, managing director of the Technology Investment Network (TIN), at last night’s gala event to launch the 2018 TIN Report in Auckland. “The growth is nationwide, it doesn’t matter where you are the export markets don’t care and it’s fantastic to see that areas outside of Auckland are seeing double digit growth.

“TIN exports now account for 10 percent of total exports for New Zealand.”

Top growth regions included North Auckland, logging 16 percent growth to hit $1.1 billion; Wellington with 12 percent growth and revenue of $2.3 billion; Hamilton, up 16 percent to $854 million, and Otago up 13 percent to $410 million.

‘South Auckland’ – from the Harbour Bridge to the Bombay Hills – was the largest region with its 80 companies providing 47.1 percent, or $5.2 billion, of the total TIN200 revenue. Growth for the region was up 9.4 percent – ‘so not too shabby either,’ quipped Shanahan.

The regional growth highlights a stellar year for the sector, which saw overall revenue for the TIN 200 companies up 11.0 percent to $11.1 billion – the second $1 billion increase in three years. The growth was driven by exports, with export revenue up ‘an incredible’ 12.4 percent to $7.8 billion, Shanahan says.

“TIN exports now account for 10 percent of total exports for New Zealand,” he says. TIN predicts that within four years tech exports will hit $10 billion – about where the tourism industry is now – and around $16 billion by 2024-2026.

Shanahan has made no secret of his desire that technology becomes New Zealand’s top export sector and says this year’s performance of the tech export sector sends a strong message that it has the potential to become New Zealand’s leading source of offshore income.

“An overwhelming number of key metrics point towards long-term sustainable growth for the TIN 200 and we’re very excited to see the further potential that this growth presents.”

The export growth came across the board, with Europe the fastest growing export market at 16.7 percent growth to reach $1.3 billion, or 11.7 percent of exports, on the back of a decline in exchange rates and a number of acquisitions by TIN200 companies in the region. TIN says Xero’s addition of 100,000 new customers in the UK also bolstered sales in the region.

North American sales were up 13.4 percent.

“We’ve seen a swarth of companies go into the United States and benefit from that economy,” Shanahan says. (Reinforcing that, the evening saw Rebecca Smith, head of listings and capital markets for Nasdaq APAC pitching to attending businesses about the merits of Nasdaq and a US listing.)

Sales to Australia – which remains our largest export market accounting for 26.0 percent of offshore revenues with the majority concentrated in the ICT sector – up 10.8 percent to $2.9 billion. TIN says successful years for Datacom and Xero were driving factors in the Australian growth. Asian exports climbed 9.6 percent

ICT companies in the TIN 200 logged the largest revenue growth, at 14.1 percent, or $521 million, to reach $4.2 billion – with Datacom continuing to hold top spot, with $1.27 billion in revenue. The company was also named number one on EY’s Ten Companies to Watch 2018, which recognises companies with the largest revenue growth. This year is the first year the number of ICT companies has exceeded that of high-tech manufacturing firms in the TIN 200.

The smaller biotech sector followed with 13.6 percent growth to hit $812 million, followed by high tech manufacturing with an 8.6 percent growth to reach $6.1 billion.

Shanahan told attendees at the event that the companies in the TIN 200 were ‘transforming the New Zealand economy and changing our society’.

“It’s not so much about the technology, but about the business models technology is enabling that are revolutionising our economy,” Shanahan says.

He noted that employee numbers for TIN 200 companies increased 4.7 percent to 47,417 and this year saw 19 new faces in the report. Those new faces included biotech/agritech provider Livestock Improvement Corporation which jumped straight to sixth place. ICT provider Netlogix arrives at number 26, with Soltius (recently rebranded as Zag) joining in 56th place.

Other ICT companies joining the TIN 200 include Grinding Gear Games (76), Jade Logistics (88=), Education Perfect (104) and RedShield Security (136).

Rocket Lab has also found a place on the table, at 98.

Six companies dropped off the list after being acquired by other companies, three no longer meet inclusion criteria and 10 companies exited because they no longer make the revenue threshold. Automated email signature provider Crossware closed out the TIN 200 with revenue of $2.7 million.

Fintech was also a big mover for the year, up 33 percent. “Over the past five years that sector has grown by $704 million primarily due to four companies: Xero, Invenco, Pushpay and Transaction Services.”

Last night’s launch event saw HMI Technologies, which designs and builds intelligent transport systems including autonomous vehicles, take out the TIN Rocket Award 2018, which recognises the company which has gained the most places in the rankings for the year. HMI, which was also second in the Absolute IT Supreme Scale-ups 2018: The Next100 Companies, climbed 44 ranks to 115 equal with Promapp Solutions.

More than 700 companies were surveyed for this year’s report with Shanahan saying there had been record responses.

Top 10 companies by rank 2018 (measured by revenue)                                                                                             

2018 Rank Company 2018 Revenue ($000) 2017 Rank
1 Datacom Group $1,270,000 1
2 Fisher & Paykel Appliances $1,118,000 2
3 Fisher & Paykel Healthcare $980,800 3
4 Xero $406,600 4
5 Gallagher Group $250,000 5
6 Livestock Improvement Corporation $236,400 New arrival 2018
7 Douglas Pharmaceuticals $225,797 7
8 Temperzone Group $187,000 9=
9 Tait Communications $171,039* 8
10= Orion Health $170,000 6
10= Magic Memories $170,000 11

*Estimated revenue

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