“One of the key things about tech businesses, they’re invested in change, not the status quo,” says TIN (Technology Investment Network) founder Greg Shanahan.

“So in many ways, radical disruptive change like Covid plays to those strengths, and in particular the strength of a country like New Zealand, where we’ve had a more cohesive response than the fractures we’ve seen in the US and UK.”

The latest TIN Report, released today, bears out his words.

The tech sector revenue grew by a record $1.42 billion (or 11.5 per cent) during the 2021 financial year to reach a new high of $13.95b, the report says.

The NZTE-backed survey also found that technology exports increased 14.4 per cent to $14.41b.

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Worldwide, the tech industry has enjoyed strong growth during the pandemic, which has accelerated digitisation of work, play, healthcare and manufacturing.

Locally, Shanahan says record venture capital investment, and the emergence of fractional investment platforms like Sharesies and Hatch, also helped to fuel the tech sector’s record growth during FY2021.

TIN’s annual ranking of our 200 largest technology companies by revenue was this year topped by Fisher & Paykel Healthcare – which clocked revenue of $1.97b became the NZX’s most valuable company as sales of its respirator technology boomed in the year to March.

From his broad view, Shanahan sees F&P Healthcare’s growth is likely to persist beyond the pandemic, given the way it has raised the profile of all of the company’s technologies.

ICT services provider Datacom also enjoyed strong growth as its revenue hit $1.41b – but it was not enough to stop it losing its top spot to F&P. Datacom – 60 per cent owned by the rich-list Holdsworth family and 40 per cent by the NZ Super Fund – benefited from businesses upgrading to cloud computing systems as Covid scattered workforces, plus contracts directly tied to the pandemic, such as supply the Australian government’s Covid relief effort with hundreds of service desk support staff.

Xero (third with $849m revenue) benefited from the outbreak spurring sole traders and small businesses moving their accounting systems online.

Other examples are everywhere through the TIN 200, from the likes of Pushpay ($270m), which got a lift from congregations moving services online during the outbreak to Grinding Gear Games ($113m), which benefitted from more online play during lockdowns to AFT Pharmaceuticals (also $113m) that saw a revenue bulge form customers scoffing record amounts of Vitamin C and other supplements in the face of the pandemic.

The impact of the coronavirus was also a common theme for most of those on TIN’s 10 biggest gainer’s list (see below), which included online learning provider Education Perfect and companies like SilverStripe and Laybuy that a growth injection from the online retail boom.

Shanahan says despite hitting nearly $14.4b revenue in FY2021 – with most of the total coming from export receipts – the technology sector still doesn’t get the respect it deserves.

“And I don’t quite understand why. Many people were perplexed at the growth figures for New Zealand last year, and were pleasantly surprised that the economy had done so well over the first full year of Covid.”

But if you take into account the tech sector, it all makes sense, he says.

Statistics NZ recorded a fall in most export segments in the pandemic-disrupted year to March 2021, including dairy, which slipped from $16.6b in 2020 to $16.0b; meat, which fell from $8.3b to $7.9b and travel tourism, which plunged from $15.2b to $5.2b.

The official statistics did pick up a lift in the closest thing Stats NZ has to a technology category, with “Telecommunications, computer, and information services” lifting from $1.4b to $1.5b.

The TIN Report takes a much broader definition of technology that takes in everything from high-tech manufacturing (which takes in the likes of Fisher & Paykel Appliances and electric fence and security system maker Gallagher Group) to software, hardware and services companies.

Ironically, telecommunications is one of the sectors conspicuously absent from the TIN Report, which does not feature Spark, Chorus, Kordia or 2degrees. Shanahan says that’s because most of their revenue is domestic.

The TIN founder says the number of technology companies sold offshore this year has been “striking”. A string of sales to overseas buyers has included Christchurch geologic software firm Seequent for $1.45b to Nasdaq-listed Bentley Systems, and a series of sales over the $100m mark including EzyVet, Vend, Ninja Kiwi and Timely.

All will stay in the TIN Report, as long as they continue to headquarter their operations in NewZealand – although some of the report’s critics have pointed out that the local connection can become increasingly marginal.

Fisher & Paykel Appliances, for example – number three on this year’s TIN 200 with its $1.35b revenue – kept its corporate headquarters and design operation in Auckland after being bought by Chinese company Haier, bit all of its manufacturing is now done overseas (n China, Italy, the US and Mexico) and around three-quarters of its 4000 staff are based offshore.

And Rocket Lab – number 30 on the TIN 200 – still has most of its staff in NZ, but is now incorporated in Delaware, listed on the Nasdaq, has its corporate headquarters and rocket manufacturing plant in California, and has built its new launchpad in Virginia – which will be the exclusive home of missions for its new, US military-backed Neuron rocket.

The TIN Report found that our largest companies did best during our first year of Covid, but the survey’s “Scale-Up” list of the young companies that enjoyed the fastest growth also featured a number of success stories.

It was topped for a second year in a row by ASX-listed Volpara Health Technologies, with a further 53.6 per cent growth on its performance last year as it lifted revenue by $7.1m to $19.7m.

In second place was a new entrant, motorsport electronics company Link Engine Management, which grew revenue by 54.2 per cent to $6.9m.

Agritech IoT (internet of things) company Levno was another newcomer to the “scale-up” list as it increased revenue 105 per cent to $3.1m.

And so was Experieco which grew revenue 57 per cent to $2.1m for its software services as remote working boomed.

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