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The first half of 2010 has seen record high levels of angel investment activity with more than $31 million invested by angel investors into young companies, according to the latest Young Company Finance Index.

In the year to 30 June 2010, $52.2 million was invested, eclipsing last year’s previous record high for a June year of 42.7 million. Cumulatively, $160 million has now been invested into young companies by angels since Young Company Finance Index began collating data in 2006.

NZVIF chief executive Franceska Banga says the continued high level of investment results from the growth in angel groups and investors in recent years.

“Angel investors are making new investments but also supporting existing investee companies as they grow. As more companies are invested into, more companies are receiving follow-on investments, providing a snowball effect.

“There is now a considerable pipeline of young technology companies looking to grow following consistent and significant growth in the angel investment sector in the past few years. As these promising young angel-backed companies develop, they need new sources of growth capital. The challenge for New Zealand’s capital markets is to improve the availability of growth capital to keep building these companies.”

Of the $31.6 million invested in the first half: $13.4 million was into first round investments; $18.2m was for follow-on investments.

In terms of the stage of investment, $3.9 million was seed investment; $20.5 million was for companies at the start-up stage; $4.8 million at the early expansion level, and $2.5 million at the expansion stage.

Deal flow for the year was maintained at the high level of last year. In 2009, 64 deals were completed. So far in 2010, 35 deals have been completed.

Since 2006, by region, 49% has been invested in Auckland, 17% in Wellington, 11% in Christchurch, 8% in Dunedin, 7% in Palmerston North, and 4% in Hamilton. Software and services received 27% of the amount invested, followed by pharmaceuticals/life sciences technology (26%), hardware and equipment (13%), and food and beverage (11%). — Source NZ Venture Investment Fund Ltd

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