Photo: 123RF
The unexpected 50 basis points hike to the Official Cash Rate could kick some tech start ups when they're already down.
The Reserve Bank yesterday raised the OCR to 5.25 percent, double market consensus.
However Creative HQ general manager of start-ups Joe Slater said it was terrible timing for new start-ups trying to raise funds, as investors had already begun to pull back in expectation of an economic downturn.
"This funding is drying up fast, and the latest OCR increase will only speed up the funding drought which has already forced many companies to cut staff numbers and hurts the chances of developing Aotearoa's next tech unicorn," he said.
"Funding from new investors and venture capitalists is the lifeblood for early-stage start-up companies who need time and cash to develop innovative ideas and products before they are ready to be cash-flow positive."
Slater said Stats NZ data showed the survival rate of tech startups had declined 45 percent over the past six years and he expected more would fail as economic conditions worsen.
"As a country, we have to move away from reliance on cheap commodity exports," he said.
"I think we're already finding that we weren't able to compete in that space and that might not be the future for us, but the likes of the tech industry has grown massively and it has the ability for us to change what our export profile looks like as a country," Slater added.
The tech sector last year generated $11.5b in exports or 14 percent of New Zealand's total, second only to the dairy sector.
