Information shared with the Herald following an Official Information Act (OIA) request (see table below) shows that most of that money is in peril.<\/p>\n
As of June 30 this year, just $16.3m of the Callaghan loans had been repaid, while the recipients of $50.2m in loans were up to date with their payments.<\/p>\n
Sixty-nine loan recipients, who received a total $23.2m, are now in receivership or liquidation.<\/p>\n
Thirty-one companies (owning $10.5m) are in arrears and making reduced repayments under arrangement.<\/p>\n
And 147, owning a collective $48.8m, are in arrears or have defaulted.<\/p>\n
A harder line<\/p>\n
The Herald made its OIA request after seeing an uptick in cases where Callaghan had pursued liquidations through the High Court. The agency (or more recently, the Ministry of Business, Innovation and Employment, or MBIE, on its behalf) has pursued eight cases, with another three in the works.<\/p>\n
A tougher line is being taken as Callaghan is being wound down. The Government announced in early 2025 that Callaghan would be dismantled, with its research work going to restructured Crown Research Institutes plus the soon-to-be-established Advanced Research Institute, while its loans were put on the books of MBIE.<\/p>\n
The dismembering included Callaghan being defunded in Budget 2025, bar a rump of staff funded through until July 30 this year \u2013 some of whom have already disappeared (Callaghan\u2019s comms team finished up while this story was being collated, with the MBIE comms team picking up the slack).<\/p>\n
Mark Bregman, until recently chairman of the now-liquidated Ambit AI, said he had a verbal agreement with Callaghan to repay a lower amount. His start-up had borrowed the maximum $400,000, which swelled to $467,429 with interest penalties after it defaulted. <\/p>\n
But after the Callaghan staffer he struck the deal with was axed, MBIE took a harder line on the loan.<\/p>\n
The ministry was shaping up to take statutory action to force a liquidation via the High Court. It was cheaper and easier to go down the route of calling in the liquidators voluntarily via a special shareholder resolution, Bregman said.<\/p>\n
Liquidators from Grant Thornton were appointed on June 10. Their initial report found $200,000 in assets, indicating Callaghan had a shot of recouping just over a third of its outstanding debt (staff and Inland Revenue had already been looked after by Bregman via asset sales).<\/p>\n
A tougher approach<\/p>\n
\u201cSince taking over responsibility from Callaghan Innovation [in November 2025], MBIE has a clearer view and is strengthening how the remaining loans are managed,\u201d MBIE head of innovation and business capability Diana Loughnan said.<\/p>\n
\u201cThis includes putting in place a more robust debt management framework, clearer accountability for monitoring and escalation, and a more systematic approach to identifying risks, setting impairment provisions and recovering funds.<\/p>\n
\u201cThese improvements will help ensure the ministry actively manages risks and secures value for money as the loan portfolio is paid down.\u201d<\/p>\n
Verteran tech investor and advisor Serge van Dam,<\/p>\n
Seasoned start-up investor and advisor Serge van Dam, an operating partner with New Zealand\u2019s largest venture capital firm, Movac, was unfazed by the high delinquency rate for Callaghan loans.<\/p>\n
\u201cThey\u2019ve got basically a third underway, a third concluded one way or another, including receivership, and a third in default or arrears,\u201d he said.<\/p>\n
Van Dam pointed to Stats New Zealand Longitudinal Business Database data that over the past 10 years, new small businesses \u2013 overall, not just tech start-ups \u2013 had a similar-to-worse survival rate.<\/p>\n
The small business stats include:<\/p>\n
Some 85% survived their first year.By year two, only 70% were still in business.That dropped to 60% by year three.By year five, only 49% were still above waterBy year 10, the survival rate was only 27%.<\/p>\n
But appreciating Callaghan\u2019s risks is not the same as accepting that it should have taken them.<\/p>\n
Long-time Callaghan loan critic Sam Morgan earlier said the Government should not be \u201cpicking winners\u201d with direct grants or a cheap loan. If a start-up\u2019s idea was worth its salt, it would attract private investment.<\/p>\n
\u201cI totally agree with that,\u201d van Dam said. \u201cIf there is going to be an incentive, it should be universal.\u201d<\/p>\n
The Government does offer a universal R&D tax credit that\u2019s tech start-up-friendly, if less so after Budget 2026, which saw the Government save a projected $87.2m by lowering the cap for the R&D software incentive from $25m to $3m.<\/p>\n
\u201cI\u2019m generally against subsidies of any type in this context,\u201d van Dam said.<\/p>\n
\u201cBut if there\u2019s going to be Government interference, I\u2019d much rather they mandated Kiwi Saver funds to invest, say, 5% to 10% of their capital into high-growth technology Kiwi assets. That\u2019s going to move the needle much more than an R&D tax credit or rebate.\u201d<\/p>\n
Bridging the gap<\/p>\n
\u201cGovernment has an important role in helping bridge the funding gap that exists for innovative companies developing new technologies and products,\u201d Angel Association of New Zealand Bridget Unsworth chief executive said (\u201cangel\u201d investors typically provide seed funding for very early-stage firms).<\/p>\n
\u201cThe challenge is not whether to support innovation, but how to do so in a way that encourages commercial success while making prudent use of public funds.<\/p>\n
\u201cWhere public funding is involved, it is appropriate that programmes are regularly evaluated to ensure they remain effective, represent value for taxpayers, and are targeted where they can have the greatest impact.\u201d<\/p>\n
If funding wasn\u2019t working, there had to be change, Unsworth said, but with consideration for the wider picture.<\/p>\n
\u201cThe success of any innovation funding programme should therefore be assessed across the overall portfolio and against its broader objectives, including the creation of high-value companies, jobs, intellectual property, exports and follow-on private investment, rather than on the outcome of individual recipients.\u201d<\/p>\n
Venture capital firms\u2019 usual rule of thumb is that most of their investments will fail, but that a handful of those that succeed will deliver outsize returns.<\/p>\n
An uptick in private investment<\/p>\n
After a post-pandemic hangover, recent Angel Association figures have shown an uptick in investment in startups.<\/p>\n
A total of 166 funded deals were recorded for 2025, with $754m investe<\/a>d, representing a 61% increase in total investment, year-on-year.<\/p>\n Higher up the venture capital food chain, this year has seen Movac hit a $185m first-close<\/a> for its Growth Fund 7, with a $200m haul expected. The New Zealand Superannuation Fund chipped in $35m. <\/p>\n