TIN’s inaugural Fintech Insights Report provides deep dive into $2 billion financial technology export sector

AUCKLAND, 6 April 2022 – Technology Investment Network (TIN), with the support of FinTechNZ, has today released New Zealand’s first ever Fintech Insights Report, offering a deep dive into one of the country’s fastest-growing tech export sectors, with global revenues of nearly $2 billion.

The inaugural report provides a close look at the country’s Fintech export sector based on data from TIN’s 2021 survey results, including size and significance, key export markets, investment challenges and opportunities, along with a comprehensive directory of 84 early-stage Fintech companies based in New Zealand. 

The Fintech sector has been one of the fastest growing market sectors in the TIN Report for more than a decade, demonstrated by recent stand-out figures. Its five-year compound annual revenue growth rate is 32%, which is three times the TIN200 five-year average. In 2021, Fintech was the second largest market sector in the TIN Report in dollar value growth – generating almost a quarter of all growth - and third largest in terms of total revenue.  

 “The continuing growth of cloud-based financial management and payment systems, accelerated by the COVID pandemic, will only serve to strengthen the importance of the New Zealand Fintech sector as more tech companies and investors seek opportunities,” said TIN managing director Greg Shanahan. 

“In addition, the constant flow and high cost of implementing global financial regulations has provided a robust revenue stream for the sector, as well as the potential for further exciting innovation and entrepreneurship.

 “As a result of its exceptional growth in the sector, it’s also been at the forefront of investment and M&A activity, particularly over the past two years,” he said. 

There were 19 Fintech companies in the TIN200 rankings in 2021 and between them they generated a combined $1.8 billion in revenue, or 13.1% of the total TIN200 revenue. The sector’s growth in 2021 was $358.7 million; a 25% increase on the previous year, with Wellington-based accounting software company Xero accounting for more than 46% of sector revenue.

Unlike the TIN200, double digit growth was seen across all company revenue bands, and all TIN200 Fintech bands had higher growth than the TIN200. Growth was highest for those companies with revenues between $100 - $199 million which increased by 122.6%. 

Key Insights from the Report include:

• Growth in overseas revenue for TIN200 Fintech companies has increased by 26.2% and is significantly higher than the average TIN200 export growth rate of 14.4%. The largest export market was Australia, generating revenue of $586 million; an increase of $111 million or 23.4%.

• TIN200 Fintech companies increased their profitability (EBITDA) by 38.3% in 2021, with EBITDA representing 20.9% of revenue (the second highest of all TIN secondary sectors) and higher than the TIN200 average of 18.4%.

• Fintech companies grew their workforce by over 950 people in 2021; representing growth of 14.2% which is more than double the TIN200 average of 6.0%.

• The six publicly-listed Fintech companies account for two thirds of the TIN200 Fintech company revenues, with Xero and Pushpay’s revenues of $848.8 million and $270.1 million together contributing 61.1%.
  
• The Fintech sector has the second highest average annual wage at over $100,000; 16.9% higher than the TIN200 average of $88,005. Total wages and salaries for Fintech companies account for 43.1% of revenue, higher than the TIN200 average of 36.1%.  

• The Fintech sector increased its investment in research and development (R&D) by 36.9% to be 20.5% of revenue, aided by the Government’s Research and Development Tax Incentive.

The 2022 Fintech Insights Report, which is sponsored by Visa, ASX, the Ministry of Business, Innovation & Employment (MBIE), ANZ, Hudson Gavin Martin, NZX, Sandstone Technology, Trustees Executors, Xero, Invest Hong Kong and JBWere, was launched at an online event today.