Geared to export markets, Auckland healthtech startups understand what’s required to attract overseas investors.
New Zealand has proven capability for developing large, successful healthtech companies, and Auckland is no exception. The city’s growing number of startups are focused firmly on export markets, knowing these will maximise opportunities for scaling and attracting capital investors.
Much to offer the world
Auckland has an enviable international reputation for innovation and excellence in the healthtech sector. Many of our healthtech companies are in the business of hardware-enabled software: typically making diagnostic devices that bring immediate benefits to patient and clinician and, in the longer term, yield data that will facilitate further research. Some of these are engaged in vital research aiding the global fight against COVID-19.
Companies that operate in New Zealand healthtech have access to research facilities running very high-quality Phase 1 clinical trials. Factors that help set the bar so high include the diversity of the city’s participant pool, a rigorous ethics and regulatory framework, and the capacity to accommodate seasonal differences with Northern Hemisphere countries.
This is complemented by an impressive range of natural bioactive ingredients for pharmaceutical use, drawn from New Zealand’s rich plant and animal biodiversity.
International, not local, horizons
While there is a ‘rich pipeline of early-stage innovation and investment opportunity’, ‘key challenges remain’, according to the New Zealand HealthTech Insights Report 2020 released by the Technology Investment Network (TIN).
The local health industry is reluctant to invest in new technology, put off by the long gestation time (typically involving clinical trials), long regulatory lead times for purchase decisions, and high technical risk. Put bluntly, local industry’s need for a quick ROI is at odds with the realities of developing new health technologies.
The New Zealand health system is too small and fragmented to be a viable market for Auckland innovators. As a result, investment in the sector is predominantly early stage or by angel groups.
To expand at scale and hit optimal productivity rates, Auckland healthtech companies need to access global supply chains.
Local R&D attracts international buyers
Healthtech startups that can demonstrate value present compelling opportunities for overseas investors and this is something New Zealand companies do well.
These innovators know who their customers are within the international healthcare sector and can clearly articulate value to each of them.
They are also familiar with the three different customer sets and their unique needs:
- End patients need to know the benefit to them
- Clinicians need to know the path to scalability so they can treat more patients
- Healthcare providers (such as government departments and private health insurers) need to improve efficiency and effectiveness
The TIN report shows that ‘HealthTech companies in New Zealand are driven by science-based product leadership and therefore spend $226m per annum on R&D, representing 12% of their combined revenues. Because of this, companies have the potential to be highly profitable if they are able to carve out a leadership position in their respective markets.’
A city ripe for investment
Auckland is home to several start-ups that are at the cutting edge of health technology, including the following:
- Pictor, which has made a breakthrough in COVID-19 antibody testing, is looking to raise $7 million.
- Orbis Diagnostics has teamed up with US scientists to develop a test that will provide COVID-19 immunity status at any point in time.
- Aroa Biosurgery, which develops, manufactures, sells and distributes medical and surgical soft-tissue regeneration products to improve healing in complex wounds and reconstruction, recently was listed on the ASX.
- Alimetry is developing breakthrough wearable diagnostic tools for gastrointestinal disorders.
- Heartlab is developing an AI-powered platform to enhance the echocardiography suite.
In addition, several companies are mining the benefits of our biodiversity, from the antibacterial properties of mānuka honey to the high nutrient value of kiwifruit, fish oil and green-lipped mussels.
Find out more
Contact Investment Specialist Malcolm Lawry to learn more about investing in Auckland, New Zealand.
This article provides general information on potential investment opportunities in Auckland and is not intended to be used as a substitute for financial advice. The views and opinions expressed are those of the relevant author, and do not necessarily reflect the views of Tātaki Auckland Unlimited. Tātaki Auckland Unlimited disclaims all liability in connection with any action that may be taken in reliance on this article, and for any error, deficiency, flaw or omission contained in it.