17 Nov 2023

Offshore growth drives revenue for Kiwi tech firms

7:17 am on 17 November 2023
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North America was the biggest growth market for firms, with 19 percent growth. Photo: 123RF

New Zealand's top 200 earning tech firms saw revenue rise 12 percent in the 2023 financial year, on the back of strong demand in North American and European markets.

The Technology Investment Network's TIN200 companies report indicated the top 200 tech sector companies generated $17.1 billion in revenue, an extra $1.8b, in the year ended June.

"Tech is New Zealand's second-largest source of offshore cash after dairy. And it's only growing in size - it's doubled since 2013," TIN report author Alex Dickson said.

"That means there's a critical mass of large, profitable firms with global reach and the wherewithal to develop new innovative products and services."

More than three-quarters (76 percent) of total revenue was earned in overseas markets, with total sales up 13 percent to $13b.

North America was the biggest growth market for firms, with 19 percent growth, followed by Europe (up 12) and and Australia (up 10.5 percent).

Fintech surpassed healthtech to become NZ's highest-grossing tech sub-sector for the first time, with revenue growth of 23 percent to $2.8b.

Healthtech's revenue growth was little changed with a gain of 0.4 percent to $2.6b.

Appliances rose 14 percent to $2b, and IT serve rose 3.6 percent to $1.8b.

"In the past decade, the median revenue for a top 200 tech firm has increased from $13.6m to $26.9m, while the average staff count has climbed from 199 to 319," Dickson said.

While total staff numbers for the Top 200 rose 3.1 percent in the 2022 calendar year, New Zealand-based jobs fell by 193, while overseas-based jobs rose by 2127.

"There is insatiable demand for tech skills and capital to support this growth - and these are two areas where New Zealand could come unstuck. Tightness in the job market continues to drive up tech wages, which are now pushing $100k for the average worker, well above the national average," he said.

The average tech salary across the total workforce rose 8.5 percent to $99,740.

R&D spending across the 200 firms exceeded 10 percent of total revenue for the third year in a row to $1.7b.

Dickson said the growth had been achieved over a number of difficult years.

"What's really laudable is when you consider that all this success has taken place against a backdrop of economic and geopolitical flux.

"Despite Covid, despite trade tensions and successive economic shocks, local NZ tech is truly flourishing and flowering."

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