Information shared with the Herald following an Official Information Act (OIA) request (see table below) shows that most of that money is in peril.

As of June 30 this year, just $16.3m of the Callaghan loans had been repaid, while the recipients of $50.2m in loans were up to date with their payments.

Sixty-nine loan recipients, who received a total $23.2m, are now in receivership or liquidation.

Thirty-one companies (owning $10.5m) are in arrears and making reduced repayments under arrangement.

And 147, owning a collective $48.8m, are in arrears or have defaulted.

A harder line

The Herald made its OIA request after seeing an uptick in cases where Callaghan had pursued liquidations through the High Court. The agency (or more recently, the Ministry of Business, Innovation and Employment, or MBIE, on its behalf) has pursued eight cases, with another three in the works.

A tougher line is being taken as Callaghan is being wound down. The Government announced in early 2025 that Callaghan would be dismantled, with its research work going to restructured Crown Research Institutes plus the soon-to-be-established Advanced Research Institute, while its loans were put on the books of MBIE.

The dismembering included Callaghan being defunded in Budget 2025, bar a rump of staff funded through until July 30 this year – some of whom have already disappeared (Callaghan’s comms team finished up while this story was being collated, with the MBIE comms team picking up the slack).

Mark Bregman, until recently chairman of the now-liquidated Ambit AI, said he had a verbal agreement with Callaghan to repay a lower amount. His start-up had borrowed the maximum $400,000, which swelled to $467,429 with interest penalties after it defaulted.

But after the Callaghan staffer he struck the deal with was axed, MBIE took a harder line on the loan.

The ministry was shaping up to take statutory action to force a liquidation via the High Court. It was cheaper and easier to go down the route of calling in the liquidators voluntarily via a special shareholder resolution, Bregman said.

Liquidators from Grant Thornton were appointed on June 10. Their initial report found $200,000 in assets, indicating Callaghan had a shot of recouping just over a third of its outstanding debt (staff and Inland Revenue had already been looked after by Bregman via asset sales).

A tougher approach

“Since taking over responsibility from Callaghan Innovation [in November 2025], MBIE has a clearer view and is strengthening how the remaining loans are managed,” MBIE head of innovation and business capability Diana Loughnan said.

“This includes putting in place a more robust debt management framework, clearer accountability for monitoring and escalation, and a more systematic approach to identifying risks, setting impairment provisions and recovering funds.

“These improvements will help ensure the ministry actively manages risks and secures value for money as the loan portfolio is paid down.”

Seasoned start-up investor and advisor Serge van Dam, an operating partner with New Zealand’s largest venture capital firm, Movac, was unfazed by the high delinquency rate for Callaghan loans.

“They’ve got basically a third underway, a third concluded one way or another, including receivership, and a third in default or arrears,” he said.

Van Dam pointed to Stats New Zealand Longitudinal Business Database data that over the past 10 years, new small businesses – overall, not just tech start-ups – had a similar-to-worse survival rate.

The small business stats include:

But appreciating Callaghan’s risks is not the same as accepting that it should have taken them.

Long-time Callaghan loan critic Sam Morgan earlier said the Government should not be “picking winners” with direct grants or a cheap loan. If a start-up’s idea was worth its salt, it would attract private investment.

“I totally agree with that,” van Dam said. “If there is going to be an incentive, it should be universal.”

The Government does offer a universal R&D tax credit that’s tech start-up-friendly, if less so after Budget 2026, which saw the Government save a projected $87.2m by lowering the cap for the R&D software incentive from $25m to $3m.

“I’m generally against subsidies of any type in this context,” van Dam said.

“But if there’s going to be Government interference, I’d much rather they mandated Kiwi Saver funds to invest, say, 5% to 10% of their capital into high-growth technology Kiwi assets. That’s going to move the needle much more than an R&D tax credit or rebate.”

Bridging the gap

“Government has an important role in helping bridge the funding gap that exists for innovative companies developing new technologies and products,” Angel Association of New Zealand Bridget Unsworth chief executive said (“angel” investors typically provide seed funding for very early-stage firms).

“The challenge is not whether to support innovation, but how to do so in a way that encourages commercial success while making prudent use of public funds.

“Where public funding is involved, it is appropriate that programmes are regularly evaluated to ensure they remain effective, represent value for taxpayers, and are targeted where they can have the greatest impact.”

If funding wasn’t working, there had to be change, Unsworth said, but with consideration for the wider picture.

“The success of any innovation funding programme should therefore be assessed across the overall portfolio and against its broader objectives, including the creation of high-value companies, jobs, intellectual property, exports and follow-on private investment, rather than on the outcome of individual recipients.”

Venture capital firms’ usual rule of thumb is that most of their investments will fail, but that a handful of those that succeed will deliver outsize returns.

An uptick in private investment

After a post-pandemic hangover, recent Angel Association figures have shown an uptick in investment in startups.

A total of 166 funded deals were recorded for 2025, with $754m invested, representing a 61% increase in total investment, year-on-year.

Higher up the venture capital food chain, this year has seen Movac hit a $185m first-close for its Growth Fund 7, with a $200m haul expected. The New Zealand Superannuation Fund chipped in $35m.

Its closest rival, Icehouse Ventures, hit a $150m first-close for its Growth Fund III. KiwiSaver fund Generate kicked in but, like Movac, Icehouse also saw an influx of funds from immigrants under the new “golden visa” scheme.

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.