Angel investment in startups: record returns but fewer deals
New Zealand angel investors committed over $15 million to young companies in the year to March 2025, up 8% on the previous year but with the number of businesses funded dropping 23% to 74.
The number of deals completed also fell 22% to 125. But it was a standout year for returns, with over $41 million returned to angel investors, a massive 586% increase over the five-year average. Ten companies experienced liquidity events (exits or secondary sales), up 56% from the historical average, with 11% of investee companies achieving such outcomes.
Angel investment involves individuals providing capital to early-stage start-ups, typically in exchange for ownership equity or convertible debt and has been a crucial part of the New Zealand startup ecosystem for decades.
Software companies continued to attract the lion’s share of angel funding, accounting for 53.5% of investment in the category.
The Catalist New Zealand Angel Market Report for FY25 completed in partnership with the Angel Association, found several bright spots with investment in new deals surging to $6.8 million, a 112.4% increase from the previous year, spread across 39 new deals (up 39.3%).
Source: New Zealand Angel Market Report
In contrast, follow-on deals, where investors provide additional funding to companies they’ve previously backed-declined by 34.8%, both in number and in value, with $8.24 million invested (down 23%).
The report identifies a small but growing pool of investors willing to back the earliest stage companies.
The average angel is 57 years old and has been investing for 5.7 years. Notably, 19% of active angels were new to the market this year, reflecting a slight increase in fresh participation. Initiatives like the NEXT GEN programme by Flying Kiwi Angels, aimed at investors under 30, are expected to further diversify the angel community in the future.
Angel investing remains accessible, with the median individual investment per deal falling to $5,625, down 22% from last year-potentially indicating more conservative approaches amid economic uncertainty.
The average investment per deal per angel rose to $15,262, up 10.5% from FY24. The average angel invested in 2.6 companies, and 16% of angels invested in five or more companies, a modest 3% increase from last year.
A small cohort of highly active angels continues to dominate the market: the top 20 angels accounted for 44% of total investment value in FY25, a significant concentration compared to the all-time average of 28%.
Sector and regional highlights
Source: New Zealand Angel Market Report
Investment was concentrated in Auckland, with companies there receiving 51% of total investment value, an increase of 11% over the five-year average. Sector-wise, the biggest movers were Energy, Materials & Resources (up 17% from the five-year average), while the B2C, financial services, and IT sectors saw a decline.
Value beyond capital
The report underscores that angel investors provide more than just capital. Their mentorship, industry connections, and strategic guidance are crucial to the survival and growth of startups, especially in the high-risk early stages where traditional financing is scarce.
The success of angel-backed firms can have a ripple effect, encouraging further entrepreneurship and attracting additional investment, both from private and institutional sources,” says Bridget Unsworth, CEO of the Angel Association of New Zealand.
Despite a drop in deal numbers and active investors, the increase in new deal value and the record returns signal a maturing market focused on quality and impact. As the ecosystem continues to evolve-with new programs to attract younger investors and a growing emphasis on syndication between angel groups-New Zealand’s angel investment community remains a cornerstone of the country’s innovation economy.
