Byron van Vugt

Investment Manager
NZ Growth Capital Partners

Navigating New Zealand’s MedTech Start-Up Scene

It’s an inspiring time for New Zealand’s MedTech industry both at home and on the global stage. In both 2021 and 2022, MedTech was the fastest growing ecosystem or sector tracked by the Technology Investment Network – their estimate was that it generates around $2.9 billion in annual revenue, with 12% growth over the last few years.

And yet despite our rapidly growing reputation, New Zealand’s MedTech sector still flies relatively under the radar, something which the team at the Aspire NZ Seed Fund (Aspire), part of NZ Growth Capital Partners, want to change by championing the MedTech start-ups and companies that will put New Zealand on the map for its trailblazing technology providing outstanding patient benefits.

It is by investing in younger companies that we are really beginning to see growth in the industry. No longer do big businesses and household names solely dominate. Instead, the industry is seeing younger companies coming through and creating significant impact such as Wellington based, Volpara Health, who harness AI-powered software for the early detection of breast cancer. Since they were listed on the ASX in April 2016 their company has raised A$132 million and their software is used in 2000 facilities globally. That’s no small feat. Nearer to the start of their journey, are innovative companies such as HeartLab who in 2021 raised NZ$3.5 million for their browser-based cardiology PACS (picture archiving and communications system) with the help of a San Franciscan venture capital firm.

Since a substantial proportion of the sector’s revenue is export driven it is encouraging that international investment is arriving for these start-ups. The prevalence of export revenue within MedTech is also a strong indication that international hospitals and healthcare systems view New Zealand’s technology as world-class and worthy of standing alongside their own.

As for the path to market, a lot of companies tend to focus on the U.S. and gaining approval from the FDA. It’s the biggest market and it’s best known by New Zealand investors and the support networks. But that’s not to say it’s plain sailing. It’s a lengthy process from idea to commercialisation and there are still many challenges to navigate, particularly when it comes to bringing your offering up to a point where it has the required structure and support around it to enable sales. Because while FDA approval means your product has been approved, it doesn’t mean you’re ready to sell it.

But let’s rewind to the beginning. How do you bridge the gap from having an idea to taking something to market? The first step is to talk to others in the industry. Obvious, perhaps, but you need to form a real understanding of what it is exactly you want to build.

Get the buy-in from all the stakeholders that will need to be involved as early as possible. You might be the surgeon but you’re not going to be the regulatory expert or understand the ins and outs of payment structure or how, say, a UK or US hospital decides what technology to employ. And with that in mind it’s worth doing your research around international healthcare systems too. Talk to international collaborators or colleagues to see if they are facing the problem that you are trying to address. Essentially, you need to prove there is a clinical need and patient benefit for your product and that it will be relevant to either New Zealand or international markets before you start trying to develop the tech.

If you need additional support or you’re looking for knowledge to fill those gaps, try exploring New Zealand’s remarkably extensive ecosystem. Initiatives such as the Te Tītoki Mataora MedTech Research Translator have a national reach and can help to point you in the right direction. Then there is Callaghan Innovation, New Zealand’s Innovation Agency. They often run workshops within their HealthTech Activator, which, as the name suggests, specifically focuses on supporting health innovations.

Don’t forget to bear in mind intellectual property before you start discussing your idea. There’s negligible risk in talking about the problem you’re solving or establishing how big a market is for a device that achieves a certain outcome. However, going to events and disclosing exactly what you’re doing, and what’s special about it - that’s not a risk worth taking.

Once you arrive at the point of investment, it’s important to consider what sort of funding provider would work best for you as there is a lot of differentiation. Even within a small country like New Zealand, funds have different perspectives about what ideal investment looks like. Some are happy to invest early on the basis that they can get a very large multiple on their investment to counter this significant risk of backing a very early company. Others are really looking for every opportunity to invest and follow-on so that their stake (factoring in the inevitable future dilution) if there is a successful exit will return more than the entirety of their fund size. The type of support offered by different investors can vary considerably too. For MedTech companies where significant capital is likely to be required over reasonably long timeframes a common recommendation is to try to bring on several investors early in a start-ups journey.

"The prevalence of export revenue within MedTech is also a strong indication that international hospitals and healthcare systems view New Zealand’s technology as world-class"

Through our Aspire seed fund, we invest at any point along the journey from initial ideas through to being market ready, but it’s those founders that are looking to solve global problems that they intimately understand and where their solution is novel that are most likely to pique our interest.

To that end, one of the biggest companies in the health tech arena that Aspire has invested in is Aroa Biosurgery. The Auckland-based company specialises in manufacturing medical and surgical products that assist with soft-tissue regeneration. They were listed on the ASX in 2020 after their successful IPO and their most recent financial report, for the period ending 31st March 2023 highlights that their total revenue (inclusive of both project and licence fees) represented a 60% growth on the financial year before. Our more recent investments include Kitea Health, who are introducing the world’s most accurate implantable sensor for heart failure and hydrocephalus, and Wellumio whose groundbreaking device is set to change the treatment of strokes.

For those in the healthcare system who aren’t looking to be a founder of a MedTech company, there’s still a part to play in helping the industry. Take time out to engage in the local ecosystem and advise where you can. It’s always good to see practitioners and clinicians using their knowledge and experience to help inform younger teams and consequently shape the field. If everyone is engaged and excited, and there’s a lot to be excited about, it will help New Zealand’s MedTech companies get a lot further, a lot faster.

"’s those founders that are looking to solve global problems that they intimately understand and where their solution is novel that are most likely to pique our interest."