Iwi Investment and Deep Tech: An Exploration of the Factors Driving and Preventing Iwi Investment into New Zealand Early-Stage Deep Tech

Abstract

Investment into deep tech startups has surged in recent years due to the potential for a lucrative return on investment and the desire to solve the world's most pressing challenges through technological innovations that arise from deep tech companies. While New Zealand’s deep tech ecosystem is growing, there is a need for more capital to fund these startups relative to international deep tech ecosystems and local deep tech startups may look overseas to fund the commercialisation of their technologies. Consequently, there is a need for additional sources of capital to retain these startups locally to establish New Zealand as a key player in technology commercialisation to create local jobs in technology, grow the domestic economy through technology exports, and solve global challenges through technological innovations. One potential solution for deploying more capital into New Zealand's early-stage deep tech startups is through Iwi, the social units of New Zealand Māori communities. It is well characterised within the literature that Māori value social and environmental factors when conducting business - factors that are analogous to the outcomes of deep tech investment and commercialisation and give reason to believe that Iwi may be ideal investors to bring more capital into New Zealand's early-stage deep tech ecosystem. However, there is a significant gap in the literature surrounding the investment activity of Iwi. To help understand whether Iwi would be ideal early-stage deep tech investors, understanding the drivers and barriers to Iwi investment into deep tech is important. To understand these drivers and barriers, an interpretivist approach was adopted to analyse the factors promoting and inhibiting Iwi investment capability into New Zealand early-stage deep tech. Nine interviews were conducted with various stakeholders relevant to the investment activity of Iwi, such as Iwi investment managers and other corporate investment managers. The analysis of the interviews found that key drivers promoting Iwi investment into deep tech were the social and environmental implications of technologies emerging from deep tech startup commercialisation activity, as well as Iwi having capacity to hold investments for extended periods of time. In contrast, some of the key barriers preventing Iwi investment into early-stage deep tech include a lack of portfolio scale, a limited understanding of the asset class at board level, and a lack of strong relationships between Iwi and key stakeholders in the New Zealand early-stage deep tech ecosystem. The findings suggest that while there are motivations that are drivers towards Iwi investment in New Zealand early-stage deep tech, there are significant barriers that need to be overcome before this can occur. These findings provide an insight into what challenges need to be overcome for relevant deep tech stakeholders wanting to increase investment activity in New Zealand deep tech and provide a basis for future research focused on the investment activity of Iwi for other asset classes.