Investment in the financial technology sector dropped to $21.9 million in 2023 compared with $185.5m the year before. Photo: 123rf
There has been a steep decline in the number and value of investments made in the otherwise fast-growing fintech sector, as cheap money dries up.
An excerpt from the Technology Investment Network's (TIN) report to be issued later this month indicates the number of investment deals in 2023 was nearly half that of the year before at 16, compared with 30 in 2022 and 25 the year earlier.
The value of investment was also down substantially to just $21.9 million, compared with $185.5m in 2022 and $165.6m in 2021.
TIN head of research Alex Dickson said investment had fallen off in line with the increase in interest rates.
"The macroeconomic climate has sort of deteriorated and money has become more expensive, globally investment and fintech has sort of fallen off a cliff," he said.
"And because a small number of international-led deals really drive the numbers up for New Zealand, when that money evaporates the bars plummet on the graph."
However, Dickson said the sector had a positive outlook and was responding with better cost control.
"There'll definitely be some fintech companies out there that are seeing their funding runways coming towards the end."
He said the outlook for the sector was brighter with open banking expected to give the fintech sector a boost from the second half of the year.
