This blog post is designed to support early-stage health tech startups by exploring the current investment landscape, key challenges, and expert guidance on how to approach capital raising.
14 August 2025- Capital raising is certainly harder than it was a few years ago. VC firms accredit the change to uncertain global geopolitical conditions, but offer a positive perspective for New Zealand entrepreneurs looking to raise.
“Valuations are particularly low in the pharmaceutical space, there’s a lot of uncertainty and retrenching,” says Deep Tech Venture Investor from Bridgewest, Kate de Ridder.
Senior Investment Manager at VC firm Movac, Byron van Vugt agrees the current market is tough but argues this isn’t necessarily unusual nor is it a bad thing.
“The market’s been tight for the past 18 months and valuations haven’t rebounded to the peaks seen in 2021/22. However, the increased diligence we’re seeing a lot of investors conduct should be seen positively. You should want investors to scrutinise every investment decision and to understand the key risks your business might face before they invest.”
He says when money is flowing more easily, while it might be easier to raise in the beginning, in the long run when markets tighten again it can cause issues.
Operating Partner at Bridgewest, Darja Nelson says they’re seeing increased investment in New Zealand through the investor migrant space, and more venture capitalists are looking to deploy new funds.
“The competition for high-quality start-ups is increasing in New Zealand,” says Nelson.
‘It will get easier for high-quality companies to find investment; the bar has just gotten higher for start-ups since 2020. Investors want to see more traction and more de-risked technologies even at an early stage,” she says.
While some startups are successfully raising, Bridgewest and Movac acknowledge investment rounds are taking longer.
“What was a six-month process is now taking more like 12-18 months,” says Nelson.
Movac and Bridgewest agree there are already signs of change in the local ecosystem. However, they caution that although markets are trending towards their pre-COVID levels, this growth is sector and region-specific with companies in AI demonstrating significantly more funding than other sectors.
“We’re anticipating a more bullish market in New Zealand in the near future,” says de Ridder.
“There’s a lot of uptick in capital allocation into early-stage venturing because of the active investor programme and the number of applicants.”
As of 20th July 2025, there have been over 200 applications for the Active Investor Plus programme, 80 per cent are focused on the growth category.
de Ridder says the challenge for med tech devices in the global market is that we’re still seeing large venture capital firms not wanting to be involved until after FDA clearance and some early market signals.
“So, that initial target capital pathway, which, on average, sits at over 20 million for a med tech device over seven years, has to come from the New Zealand ecosystem,” she says.
Movac’s van Vugt mirrors this sentiment, saying New Zealand companies need to realise that although we’re geographically isolated, our markets are linked to the performance of international markets. Local investors are considering that in their decisions.
“The key to attracting capital is to really understand your market and customers, to have a clear vision for a highly differentiated product, demonstrate your ability to achieve it, and ensure it can be achieved in a capital-efficient manner,” he says.
When discussing common errors made by companies approaching a raise, both Movac and Bridgewest highlighted two areas. Financial stewardship and agility.
Movac notes that one challenge they commonly see from early-stage founders is pulling resources into areas that don’t immediately matter.
“An area we work through with many companies is on focusing their resources for maximum impact. It’s great to get started on product number two, but if you’re not even at the point of sales for version one, it can often just be a distraction,” says van Vugt.
“The companies that succeed are pragmatic with what they use investor capital for, they’re clear on their vision, and what they’ve achieved to date.”
Bridgewest reiterate this saying stakeholder relationship building is essential but founders must prioritise capital efficiencies and resourcing this needs to be carefully considered.
“One of the first things to be cut in a fiscally constrained environment is the travel budget, but companies can’t afford to do this. Being connected to your market and building relationships with key stakeholders is essential in environments like this one,” says Nelson.
“VC firms want evidence of financial stewardship and resourcefulness. Especially in this economic environment, founders need to interact with customers in a way that’s aligned with strategy and derisks the investment,” de Ridder adds.
Another common error VC firms are seeing from founders during capital raising is ignoring feedback from investors and end-users.
van Vugt says if several investors are telling you something similar, you probably need to adapt your plan.
“The successful companies are flexible in aligning their plans to investor and customer feedback. You’ve got to ensure the capital you raise works for the returns of all shareholders,” he says.
“That doesn’t mean a total reimagining of the company you’re building, but it might mean re-prioritising different parts of the business.”
Knowing we could be facing a fiscally strained environment for another year or two, Movac and Bridgewest said founders can focus on one key area for a better chance at raising capital, focus on end-users.
Companies usually approach investors with a deep understanding of the problem they’re trying to solve; the missing link is a validated connection to the customer and showing what makes you uniquely able to tackle that problem.
“We often see founders focused on building the technology but neglect communicating with their customers. It’s relatively cheap to talk to end-users, yet it’s so rarely a focus,” says de Ridder.
She emphasised every design decision should be centred around the end user and product market fit.
“Continue to ask yourself, why us, why now, and what’s our protection if barriers come up?” she says.
Movac mirrors this sentiment, saying the smartest investment is in a team that understand their customers.
“You’ve got to know what they want, why they’d want your solution, the constraints they operate within, and the alternatives they’re exploring,” says van Vugt.
“Showcasing your product is a breakthrough for its sector is one part of it but, providing evidence that your customers are excited to be using it and have a pathway that enables more users in a capital-efficient manner is the point of difference.”
It’s clear capital raising is currently particularly challenging for health tech ventures. VC firms say no matter where you are in your journey, the best things you can do is use all the resources and networks available for advice.
Bridgewest, who talk to approximately 300 founders a year, say they encourage each founder to talk to as many people as possible.
“Talk to the transfer offices who have a wealth of knowledge, talk to HealthTech Activator who see across the ecosystem, talk to other founders and customers,” says de Ridder.
“The conversations should focus on finding ways to motivate all parties involved in your startup’s success, including founders, staff, investors, advisors, first customers and external providers including consultants you contract, to want an aligned and optimal outcome for the commercial venture.”
“When you’re in the early stages, they need to be willing to share the risks and rewards. Look at all of the conversations as building partnerships, and talk about what you are creating together and how you are all contributing."
ENDS
The Bridgewest Group vision is to create an ecosystem of entrepreneurs that develop their passion for deep tech into viable, global ventures. Bridgewest Group, a family-owned USA-based investment firm founded in 1999, has fostered ground-breaking companies throughout its journey. For the past 25+ years the founders of Bridgewest have been actively investing in and building businesses in the software, artificial intelligence, semiconductor, wireless communications, and biotechnology industries and continuously recycle capital from successful exits into new ventures.
Movac is New Zealand's largest and longest-standing venture capital investor, with over 25 years of supporting New Zealand entrepreneurs. Movac has raised and managed more than half a billion dollars of Kiwi capital, partnered with over 55 Kiwi founders across 7 funds and is currently investing from two funds – The $200m Growth Fund 6 and the $45m Emerge Fund 4. Movac’s current portfolio includes several MedTech companies, including Alimetry, Wellumio, RespirAq, RosterLab, and Avasa.
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