There is a globally debated, though accepted, recipe for what it takes to build a solid technology sector and startup hub. Auckland now has some of the key elements lining up nicely. Not all. Some are fixable. Some are on their way. And a few structural chasms that will take time to bridge if we ever can.
Where Tāmaki Makaurau is now
On the tick side of the ledger, we have real companies. Xero, Rocket Lab, Fisher & Paykel Healthcare leading the charge. These are globally recognised firms with meaningful scale, strong execution track records and real economic contribution. They demonstrate, unequivocally, that globally competitive companies can be built from Auckland.
We have early-stage capital that simply did not exist a decade ago. Icehouse Ventures, GD1, Outset, Bridgewest and more. NZ Growth Capital Partners (NZGCP) sitting behind them as the fund of funds, committing roughly $250 million across funds, backing more than 160 companies, with a further $100m from the New Zealand Super Fund last year. Plus a clear and started mission to invest $5 billion in five years.
Auckland’s tech sector contributes 56% of our GDP at $18.1b. The city houses more than 55% of the country’s tech startups, alongside the highest concentration of angel investors, venture capital, private equity and incubators.
Deep tech investor Mitali Purohit says Auckland has carved out a unique global identity as a tech hub.
You can see that starting to form. Pockets of density. Space. Agritech. Fintech. Cleantech. All the techs. Super-early clusters where some startups sit close to capital, and alongside high-value manufacturing capability.
On the converse, there are unseen niche enterprises tucked away out of sight in industrial parks of Albany, Glenfield and Ōtāhuhu doing crazy things with hydrogen, carbon, plastic waste.
Auckland is always contradictory
But there is a vibe-change afoot. You can feel it is the way conversations are short-handed and shared knowledge and in-group language are tossed about at meet-ups. On group chats. There are events and startup specialist media.
As an Aucklander, I think of my hometown as relatively sprawly, a little chaotic. For offshore investors, Auckland works because everything is in one place.
The feedback is consistent. They are surprised by the quality of innovation and the proximity of it. That is starting to convert into capital. Through migrant investor flows, capital has already landed into companies like Quantifi Photonics, Wellumio, Hectre.
Plus, hooked-up and motivated returning Kiwis are starting to come back. A standout is ex-Facebook Marketplace product leader Bowen Pan, who is giving the ecosystem a real shot in the arm.
It’s patchy, but it’s warming up. The more important shift is behavioural. More exchange with offshore hubs. More focus on sectors where distance doesn’t matter and increasingly where it does, but is outweighed by capability and an acceptance that global mobility is ticket to the game.
Geography becomes less relevant. Capability becomes the question. And on the ambition front, there is no structural reason why Auckland can’t compete.
The limitation, as with everything in our city or country, is scale.
Outset Ventures back founders whose ambitions are massive. Think fusion. They also have a flywheel in motion and an uncomplicated ask: for Auckland to be the place where people live and grow.
The venture capital (VC) itself has grown five times bigger in seven years and Parnell-headquartered Future House is the real deal in terms of a startup enabler and hang-out.
With LanzaTech’s Dr Sean Simpson on the board alongside Sir Peter Beck, the VC and their founders have a direct link to companies that have already scaled globally.
LanzaTech alumni have spun out others, Will Barker’s Mint Innovation to recover precious metal from electronic waste, Avertana, Ternary Kinetics and agritech startup BioConsortia.
One company becomes several. Talent, capital and experience carry through. The next company starts further ahead. This is how it works.
And then there’s the draw of the city itself. Skinny as a shoelace draped across 53 volcanic craters and cones, the Waitematā and the Manukau pressing in on either side, Tāmaki Makaurau is breathtaking. Even better from the water.
And slowly, finally, it is all wiring up. The City Rail Link has been grinding along Thomas the Tank Engine-slow, but it’s happening. My town is getting flow. Becoming greener, more walkable, more cyclable. With more appealing places to be and live – if you can afford it.
Urban appeal alongside and access to the outdoors is what we offer. In the global arm-wrestle for specialist tech talent and investor capital, it has to be the combination, says Angus Blair, of Outset.
Knowledge-based engines
Will Charles has been fighting the good fight for more than 20 years at UniServices. The executive director of investments describes our ecosystem as more built than it looks – but not yet scaled.
UniServices sits at the centre of the University of Auckland’s commercial engine, linking research to industry, capital and company creation. Around it is a deliberately constructed system: the Centre of Innovation and Entrepreneurship develops capability and mindset across students and researchers, while the Newmarket Innovation Precinct and Medtech IQ provide the physical space to turn ideas into companies.
The pipeline is not accidental it is triaged and trained through.
Its $40m Inventors Fund supplies early “get going” capital, backing scientists as they move from lab to startup. And has its fingerprints on many of the companies we identify as real players today.
The opportunity set is broad but backed-up: chemistry, physics, engineering, energy, medtech, space, geothermal, hydrogen, infectious disease and AI. The shift, Charles says, is cultural as much as anything. More PhDs are now choosing to build companies, not just publish papers.
But the constraint is our constant bugbear. Auckland starts companies, then struggles to scale them. The gap is human capital, says Charles, and we see this all over the place.
There not enough people here who have taken a company from $5m to $50m, let alone to $1b.
Orion Health did. It was one of Auckland’s first globally scaled tech companies, building health data systems used worldwide and creating a generation of experienced operators who now feed back into the ecosystem.
Ian McCrae is building again, with AI through McCrae Tech.
He’s clear on what has shifted for him. “We used to be fearless, like we could take on the world. Guys like John Britten and Bill Buckley led the way.”
And on whether Auckland can back itself and become the tech centre we hope it can, he says, “There is no reason why not. We will if there is the will.”
The flywheel (and the scale problem)
On the cross side of the ledger, it all comes back to the flywheel. Or more precisely, the absence of it.
The flywheel is the key to sector creation a la LanzaTech. A self-reinforcing loop where one success makes the next one more likely, cheaper, faster.
Rocket Lab is our stand-out. Sir Peter Beck put New Zealand on the map in space.
As importantly, it has started to spawn. The company has fuelled a generation of engineers and operators. And it drags us all forward. A can-do signal that we can deliver deep tech, not just talk about it.
Right now, we have a couple of whales. We need 10, 20, 100.
What matters is not just creating these companies, it is the exhaust, if you like. Talent that has seen scale and understands what good looks like at global level.
Right now, Auckland is somewhere between generation one and two. We’ve proven it can be done. It doesn’t quite feel normal yet.
Build a rocket near a volcano
Someone doing the doing is Dr Malcolm Snowdon. He is ex-Rocket Lab employee number six and my former colleague at Zenno Astronautics. We worked together to bring space technology based on high-temperature superconducting magnets to market.
Tucked away in Mount Eden’s leafy suburb while locals are in a white-fisted battle over villas versus verticality, Snowdon is building rockets.
His approach is the “shut up and build” school of engineering. Stellar Kinetics is his company, and his small team are building orbital launch vehicles for Europe and Asia-Pacific.
Right now they have a contract in place to export a rocket to Malaysia as it develops its space programme. Other commercial customers are in play. His focus is speed and capital efficiency. Months to launch, for less than one million euros, compared with programmes that take many years and require hundreds of millions in capital.
He’ll stay here too, Auckland works for him. Snowdon sails, climbs mountains and sees no obstacles to growth with access to strong local engineering capability and space launch geography.
Will he succeed? It’s high risk – what isn’t these days? He’s a fierce engineer, and this time around, he is ready.
Snowdon’s business was global from day one and he has no interest in waiting around for government procurement.
His plan aligns to the practice of an aggressive revenue-first discipline. Validate demand with paying customers so you are utterly certain that what you are building is what the market actually wants.
Compress time and cost. Shorten build cycles, target months, not years. Drive capital efficiency as a competitive advantage.
Snowdon has given employees an exciting mission to chase and equity from day one. They’re incentivised to work beyond the reasonable, as he does. This is broad participation, not just reserved for the founder.
To make it work, we absolutely must have a cheaper, clearer system for Employee Stock Option Plans (ESOP) that are not tangled up in tax.
Mehran Gul, a leading thinker on innovation out of the World Economic Forum has been clear on this model. Yes to simple ESOP. Plus backing fewer companies, but backing them properly. Focus on outcomes.
He sees that the way to go is to do whatever it takes to generate more startups. By attracting the best talent is how the unicorns will emerge. And when they do, keep them here as long as possible, even if they have to list offshore. Hold them. NZGCP are aligned here.
Gul is less fazed about R&D levels but calls for simplicity in system and notes that New Zealand has reputation on our side. Trust can be our currency. We can’t win on scale. We can win on trust.
This under a growing distrust of big tech and its trillionaire founders. We know who they are on a first-name basis. There is a creep factor in the concentration of power that has overreached.
We can do better, we have decent values and a technology community aligned around them. Trust as a catalyst.
Deep tech for the win
AI is eating software and that’s not all, which is why a deep tech focus matters even more now.
Deep tech is science, engineering and hard infrastructure, things that take time to build, are difficult to replicate, and create a deep and defendable moat.
And in New Zealand, we are damn good at it – and Auckland has a notable concentration.
Global technology is shifting into AI, quantum computing, space and sovereign capability. Geopolitical uncertainty has accelerated demand for hard assets.
Auckland has the bones.
Why right now?
New Zealand has underperformed in productivity and GDP per job for a long time. Other economies have done a better job converting science into commercial technology and frontier companies.
Arama Kukutai (Waikato, Maniapoto, Te Aupōuri) is a California-based investor. He co-founded Finistere Ventures, has led and governed companies across Silicon Valley, the EU, Israel and New Zealand. He recently joined the founding board of the NZ Institute of Advanced Technology, part of the Government’s science and technology reset, which, as we are the epicentre of this activity, will be based in Auckland. Another win.
He points out that while science reform may not capture political attention, it signals the need to extract more value from public research. New Zealand is lagging in investment, value capture, and the creation of high-value jobs and companies.
The constraint is increasingly cultural and structural. Too much bureaucracy. Too much friction between public and private sectors. For a small economy, we are not agile enough.
There is also a significant opportunity to expand Māori participation in the tech sector, both in entrepreneurship and private investment. This will be a massive change, given the historical focus on primary industries and property.
It is in the air. Tāmaki Makaurau is rising. Te Rūnanga o Ngāti Whātua now has CEO Renata Blair at the helm.
Recently returned to his iwi after a corporate career, Blair combines his skills of te ao Māori with extensive knowledge of the business world. Technology investments and the decision to harness AI by controlling their own data from end to end will play a strategic role here.
In his own words: “Nau mai e te āwhā. Run towards the storm.”
Disclaimer: Erica Lloyd is an investor in Zenno Astronautics and advises early-stage companies.
