Bread man uses his loaf to beat crate conundrum

Steve Haythorne says his Mobot can save firms thousands.

In his past life as a supply chain manager, entrepreneur Steve Haythorne would send 30,000 loaves of bread from Auckland to Whangarei each night. But he noticed a problem – each of the three trucks it took to do the job was only 60 per cent full.

Haythorne’s conundrum stemmed from a baking industry convention: standard loaf crates were stacked in piles of 12 or 13, which was as high as they could be stacked to allow the delivery guys to heft them around on a handbarrow and reach the top to unload.

The stacks were too low to fill up the trucks, but still heavy and dangerous, Haythorne said.

“It’s a very labour-intensive job that involves a lot of man-handling as well as creating a dangerous environment … I thought there has to be a better way.”

After searching for some handling machinery that could do the job better drew a blank, Haythorne set about creating his own.

The result is Mobot – an all-electric, stand-on, zero-turn device designed to move items that are too small for forklifts but too heavy to be safely moved by the ubiquitous handbarrow.

A Mobot is manoeuvrable enough to work within the confines of a delivery truck.

It is capable of lifting a stack of 10 crates and then putting another 10 on top, so it can fill a delivery truck to its full height, Haythorne said.

“That results in a massive financial payback. A Mobot could save that Whangarei bread run $700,000 annually, because it can now be made by two trucks instead of three.”

The machines will also vastly improve health and safety conditions, increasing workplace productivity and reducing ACC costs, he said.

After receiving some early expressions of interest in a concept vehicle he built more than 18 months ago from his then-employer, Goodman Fielder, as well as Fonterra and bread maker Tip Top, Haythorne quit his job to work full-time on his new company, Mobotech.

“I sold my house, all my shares and went into hock on everything and just poured it all into getting a prototype vehicle together.”

A year ago Haythorne showed that prototype to the guys at angel investment firm Sparkbox Ventures. They liked what they saw and invested seed capital of $200,000 from the Global from Day One fund – a joint venture between Sparkbox and Auckland business incubator The Icehouse, with half the funding matched from the Government’s New Zealand Venture Investment Fund.

A further boost was given to the fledgling company with a $112,000 grant from Callaghan Innovation.

Sparkbox venture principal Mark Robotham said Mobots had great market potential.

“The niche market in the bread and milk sectors is enough to make the business very successful, but there are other opportunities to extend it to wider markets,” he said.

“What we’re trying to do with companies like this is get engaged very early on to ensure they reach global markets as quick as they possibly can … it’s all based on the rationale of grow fast [or] fail fast.”

Haythorne has used his seed funding to create a final prototype, which he plans to show at a world baking expo in Las Vegas this month.

He’s also about to embark on a second investment round to help fund Mobot’s manufacture and initiate sales in the US. Already having a track record with funders will make that process a lot easier, he said.

“I’m just very appreciative that the angels elected to get in behind the idea because it never would have gone anywhere without them.”

Produced in association with the Angel Association of New Zealand.

First published in the Herald on Thursday October 10 2013

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Avocado processor eyes bright future

Avocado-processing company, Vocado, with it’s innovative product has been drawn to Tauranga to be closer to investors and business advisers.

Vocado uses an innovative processing and packaging technique to produce easy-to-use and long-living avocado pulp products.

The company this year received a significant investment from Bay of Plenty angel investment group Enterprise Angels to help it relocate its manufacturing facility from Taneatua in the eastern Bay of Plenty to a new factory in Judea.

Twelve Enterprise Angels investors put $335,000 in Vocado, while a matching investment of $250,000 by the Government’s Seed Co-Investment Fund brought the total investment to $585,000.

In addition to the new money, the Enterprise Angels deal has connected Vocado with key players in the avocado industry who will help the company with supply and export challenges.

Vocado managing director Colin Elder said the move gave the company the capacity to expand, and allowed easy access to new investors and advisers.

“We needed some depth of experience and we’ve got that now so I’m absolutely delighted with the people we’ve picked up and who have supported us in this investment.”

Vocado uses a production process which aims to get the avocado pulp into an oxygen-free environment as soon as possible so that the fruit doesn’t brown. The pulp is then packaged in resealable, plastic pouches to keep it fresh and sold to commercial users such as Hell Pizza and Pita Pit.

“We purposely targeted franchises that were already using avocado and we’re taking over from imported products, we’re not competing directly with any New Zealand supplied products and that’s intentional on our part because it’s a small market and we want to be export driven.”

Vocado is working on setting up a second production line in its Koromiko St factory. There was room in the factory for a third production line if needed, Mr Elder said.

The company’s production manager will be moving to Tauranga in January and local people will be employed in the future. “We see about five people employed, with another couple of people per production line that we manage to put in.”

Enterprise Angels chief executive Bill Murphy said the large investment and quality of the investors/advisers had drawn the company to Tauranga.

“It was important to us to have Colin close by the expertise we have here, it makes it easier for us to really engage and help the company.”

The Vocado deal represented a positive trend towards local investing, Mr Murphy said.

“Including the Vocado deal, we’ve invested in eight companies this year and, of those eight companies, three are Bay of Plenty companies.”

First published in the New Zealand Herald on Wednesday September 11 2013

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Kiwi’s landed in San Fransisco

San Francisco-based Kiwi Landing Pad has become an invaluable staging point for big-thinking Kiwi tech start-ups looking to crack the US market. Jamie Morton caught up with a few of them.

The pelican brief

It might be a run-in with a pelican that Chris Smith has to thank for his booming app company.

Thirteen months ago, Smith and his wife found themselves awe-struck by one of the creatures during a visit to Wellington Zoo.

A sign at its enclosure yielded a few basic facts – one being the bird could hold 13 litres of water in its beak – but the couple wanted to know more.

The StQRy smartphone app is being used by zoos, museums and even Walt Disney.

More than 100 clients include Kelly Tarlton’s Sea Life Aquarium, the Christchurch Botanic Gardens, Auckland Zoo, and, of course, Wellington Zoo.

“If you walk around any of the venues you’ll see StQRy codes and it says, ‘get the story’. If you scan it with the StQRy app, that story will pop up to full multi-media.”

The company’s staff has grown to nine and this year it started a new production team to write stories.

Many regions around New Zealand are using the technology, which is quickly branching out in the US.

San Francisco and Seattle have signed on with StQRy to promote their public art, and major companies including Walt Disney and the Getty Centre in Los Angeles have also bought in.

Booktrack: Reading revolution

When explaining his company’s point of difference, Paul Cameron likes to jump back to movie theatres in 1928.

The introduction of “talkies” – motion pictures accompanied by sound – would revolutionise the movie business.

The soundtrack software developed by Cameron’s company Booktrack could do the same for e-books, he said.

The company offers synchronised soundtracks for e-books, including sound effects and music, to provide users a movie-like experience while reading.

“When you watch a film and you turn the sound down, all the emotion dies with it – so we are just bringing that experience to reading.”

Cameron described the soundtrack software as dynamic: “It’ll adapt to what you are reading, when you are reading.”

When a character might open a door, the reader will hear a creak. Orchestral music will sound at a sad scene.

The company picked up the Innovative Software Product prize at this year’s NZ High Tech Awards and has raised millions of dollars from investors, among them Facebook billionaire and Paypal co-founder Peter Thiel.

It has also found support from Warehouse founder Sir Stephen Tindall, the New Zealand Venture Investment Fund and Sir Peter Jackson’s Park Road Post Productions, which provided the sound for The Lord of The Rings and The Hobbit.

Booktrack bases its research and development out of Auckland and recently moved its US office from New York to San Francisco, positioning itself closer to the tech industry.

Its first free title, The Adventures of Sherlock Holmes: The Adventure of the Speckled Band, was downloaded more than 100,000 times in its opening three months.

Mako Networks: Blocking the card sharks

Each time Mako Networks’ communications manager Kevin Ptak emails out a news update to his colleagues, he throws in the latest tale of credit card fraud.

There was the series of attacks in Brisbane. And there were the five hotels in Hawaii where fraudsters managed to mine months’ worth of customers’ credit card details.

“It’s on the rise around the world,” Ptak said.

For Mako Networks, the age of data crime and data security has presented a business opportunity.

The New Zealand-based network management company specialises in security for small site businesses and organisations, such as petrol stations and fast food restaurant chains, ensuring their data and records are secure.

It began in 2000 as YellowTuna Networks, an enterprise created by former Xtra employees Chris Massam and Simon Gamble to provide managed firewalls to small businesses.

Rebranding as Mako Networks a few years later, its technology was taken up by Telecom, the Ministry of Health and other clients.

In the mid-2000s, new rules were brought in to protect credit card users and combat fraud under the Payment Card Industry Data Security Standard.

Large companies with big budgets and staffing expertise found it easy to comply with new rules, Ptak said.

“But the small businesses – the cafes, the florist shops, the corner stores – they’re all having a really hard time and are struggling with this.”

The tighter standards had pushed the fraudsters targeting corporations “further down the food chain” to these small businesses, he said. “And that’s where our system comes in.”

Mako’s research and development is based in Albany, but it’s estimated around three quarters of its new business will be in North America over the next three years.

The company had a turnover last year of $10 million and now has multiple offices in the US.

It was recognised with the Security Innovation of the Year award at the 2012 UK Digital Entrepreneur Awards – and by the Ministry of Business, Innovation and Employment with a multi-million dollar funding commitment to help boost research and development.

“We were a recipient of a $4.2 million grant … and we are using that money to hire talent just as fast as we can find it to support our growth in the US.”

A Virtual Eye on America

Dunedin-based Virtual Eye might be best known for transforming New Zealand sports coverage with 3D animated graphics, from the America’s Cup Challenge to motor racing, golf and cricket.

But as the company has demonstrated in San Francisco, there’s more to it than just fancy things on telly.

It’s been using augmented reality – computed-generated technology that adds a digital dimension to real-world environments – to showcase the best of New Zealand.

Seizing on the America’s Cup, the company is deploying augmented reality displays, viewable by smartphone, to promote Kiwi wine, sailing and culture.

A display was recently set up at San Francisco’s artificial Treasure Island, to tie in with a Maori hangi and music festival staged there.

At the cup base, the technology allowed Emirates Team New Zealand fans to take a virtual tour of the team’s boat, getting up close with all of its components and comparing its size to that of an elephant.

The company – part of Animation Research, a venture co-founded by Ian Taylor in 1989 – is looking to take its technology to nearby Napa Valley wineries.

Meinung said smaller wineries seeking a point of difference had shown an interest – and not just in using it as a display for visitors.

It could also come in handy as a training tool for waiters and bartenders, she said.

While the augmented reality technology was not Virtual Eye’s, the company had developed it in such a way not accessible elsewhere. “We’ve been getting a lot of recognition,” she said.

Jamie Morton travelled to San Francisco as a guest of Air New Zealand.

First published in the New Zealand Herald on Thursday August 15 2013

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Biofuel venture an ‘act of faith’

The investment appeal of biofuels seems clear – growing populations urgently need alternatives to scarce and expensive fossil fuels.

So when a company finds a way to remove naturally occurring algae from water and other waste streams (such as forestry waste) and convert them into biofuel, the commercial potential is immense – even more so when a byproduct of the process is clean, fresh drinking water.

NXT Fuels, formerly Aquaflow, was formed in 2005. Within a year it had produced a bio-diesel derived from wild micro-algae. Its patented process treats wastewater and creates “green crude oil” without genetic modification of the algae.

A renewable hydrocarbon fuel that’s virtually greenhouse gas-neutral and compatible with existing infrastructure sounds like an investor’s dream.

But NXT founding director and angel investor Nick Gerritsen said convincing those who’ve grown rich from one technology to migrate to another was always a challenge, so turning a clean technology business into one that’s sustainably profitable requires resilient, patient investors.

Gerritsen’s investment firm, Crispstart, specialises in renewable energy start-ups and what he calls “clean tech”. He recognised the potential of NXT’s business model from the outset but was savvy enough to know there were many hurdles between start-up and payback.

“It’s in a zone that’s extremely hard to crack from a new-tech perspective. In this sector, people always want as much volume as possible for as few dollars as possible,” Gerritsen said.

NXT Fuels director Anake Goodall joined the company only recently. He describes himself as a “professional director and social entrepreneur”.

Goodall met Gerritsen in 2008 in Singapore at an event focused on the sustainability of global freshwater supplies. “We struck up a conversation and stayed in touch through a series of serendipitous encounters in true ‘Kiwi village’ style”, said Goodall, who looks more like a rock band manager than someone you’d expect to see in a corporate boardroom.

For Goodall, it was a compelling prospect to be involved in a company that could potentially remedy rising carbon dioxide levels and find a greener way to replace the world’s diminishing fossil fuel reserves.

“NXT’s technology makes possible an important part of the sustainable future the planet so clearly needs and provides the lowest cost transition bridge possible. And it’s available today and is being led from humble Aotearoa New Zealand,” Goodall said.

He is equally enthusiastic about his new business partner.

“Nick is extraordinarily visionary, passionate and focused. These are all prerequisites for this transformative space, which is almost by definition unwelcoming, dismissive and lonely. This isn’t a role for the faint-hearted investor or entrepreneur.”

Angel investment was indispensable to ventures such as NXT, Goodall said. “Start-ups, especially those in uncharted waters like NXT Fuels, are at one level acts of faith. Established industry money is usually trapped in its own business-as-usual understanding of the world and knows all the reasons why this won’t work.”

But NXT is already harvesting revenue as well as algae – $122,669 after expenses in 2011 for its United States and New Zealand-based projects. As it makes the transition from technology researcher to implementer, the company is by requirement shifting its sights from angel investors to industrial-scale project design and delivery capital.

But Goodall said the small, immature and relatively conservative New Zealand capital market remained an obstacle.

“We struggle to establish a national vision that’s solidly supported by central Government. In this context a sum of, say, $200 million for a commercial-scale refinery is a significant barrier to overcome.”

Every proposition in Gerritsen’s portfolio to date has been angel-backed and while raising capital this way continues to be fundamental to his approach, clean-tech projects require more capital for deployment than traditional businesses.

“Obviously we make it clear from the outset that these are early-stage companies and there’s a real risk we could all lose our capital,” he said.

Gerritsen is a lawyer and former intellectual property consultant.

It might seem relatively unusual for a lawyer to move into the rollercoaster world of angel investment, but he says the move came naturally to him. He sees his role ebbing and flowing over a business’ lifecycle.

“I invest in the companies every day with my time – and often cash too. So I’m a blend of both angel investor and entrepreneur, probably more entrepreneur.”

As a result, his portfolio includes everything from renewable fuels to carbon refining and digital manufacturing. “I just engage with stuff that resonates with me.”

Produced in association with the Angel Association New Zealand.

First published in the New Zealand Herald on Thursday August 15 2013

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SmallWorlds creator’s mobile game debut

Outsmart co-founder Mitch Olson says the time was right to have a crack at creating games for mobiles.

Kiwi game development company Outsmart, which created global hit SmallWorlds, has “dipped its toes” into the mobile space for the first time.

Five members of the 35-strong Karangahape Rd studio dedicated themselves to creating Gopher Launch, which went live on iTunes and Google Play on June 13.

Although the game is free to download, Outsmart will generate revenue through advertising and by charging players to access an ad-free version of the game.

Outsmart will launch a second mobile game called Roost Raiders in the next six weeks, Olson said.

Both new games are based on the ‘freemium’ model, where users play for free but can then choose to pay for add-ons to enhance the game.

“These games cost between $250,000 and $1 million to make. If you’re giving it away for free you have got to make sure your monetisation models are robust,” Oslon said.

Although Outsmart had managed to survive before now without going into mobile, delaying the move any longer would have been unwise, he said.

“We haven’t been affected to date. We continue to grow and that’s been supported by shifting into other markets like Brazil.”

Outsmart last year launched a version of SmallWorlds in Brazil, calledMiniMundos, which now has four million signed-up users.

SmallWorlds - an online environment where users create personal virtual spaces and share experiences with other players – has in the meantime attracted bigger audiences and now boasts 10 million registered players.

SmallWorlds’ backers include Disney’s venture capital arm and Trade Me founder Sam Morgan.

First published in the New Zealand Herald on Thursday July 4 2013

Photo / Sarah Ivey

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Bike crash leads to retail software start-up

Discount scheme that does away with loyalty cards was conceived during convalescence from motorbike smash.

Every cloud has a silver lining, so the cliche goes, and for Enis Bacova it was a road accident, which nearly killed him, that led to the establishment of an internet start-up.

“It took me six months to recover and Rippr came out of those six months of thinking,” he said.

Rippr was launched in February and is a web-based system that grocery retailers, restaurants and cafes can use to offer rewards to customers.

Instead of getting yet another loyalty card to put in their wallets or lose in a drawer at home, customers give their mobile number to the retailer to join up for free.

After activating their account online they earn “Rippr dollars” with each purchase (usually 5 to 20 per cent of the purchase price) that can be earned and redeemed on subsequent visits by entering a pin number at the store.

Users can also earn extra rewards based on the total amount of Rippr dollars that build up in each retailer’s “pool”. They are also encouraged to promote the service – and subsequently the businesses that use it – through social networks like Facebook, Twitter and Google Plus.

Ten companies are offering Rippr so far, including Dante’s Pizzeria in Ponsonby and the Covo restaurants in Fort St and Grey Lynn, as well as a number of grocery stores.

Around 3000 users are signed up, Bacova said, adding that he was focused on lifting the number of retailers using the technology to 100.

At that point Rippr – which charges a weekly subscription fee to its business clients – would become profitable, he said.

Bacova, whose brother Remion developed the technology that powers Rippr, said it was a challenge convincing companies to introduce the loyalty scheme because it was a “new thing”.

But it encouraged repeat visits from customers, as well as providing a database of clients that retailers could target in their marketing.

“Eighty per cent of revenue comes from 20 per cent of customers so these loyal customers who repeat business are very important,” Bacova said. “It’s much easier to keep a loyal customer than to bring a new customer in.”

Bacova graduated with a degree in political science from the University of Auckland in 2005 and gained an MBA from AUT after returning to this country following the motorbike crash.

“My move to New Zealand was a good thing … I feel alienated in Albania,” he said. “The way I see it is I want to give something back to New Zealand – I got educated here.”

Auckland business incubator The Icehouse owns a small stake in Rippr, while the other shareholders include members of Bacova’s family.

First published in the New Zealand Herald on Thursday June 20 2013

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Smart-fabric sews up Angel Investment

Christchurch-based Footfalls & Heartbeats has developed a manufacturing process that uses nanotechnology within the textile structure that acts as a sensor.

The company says there’s potential for the fabric to be used in a wide range of applications, including the monitoring of patients’ vital signs in hospitals.

In its latest funding round Footfalls & Heartbeats has secured investment from the Global From Day One programme, Wellington’s Sparkbox Ventures, the Government-backed New Zealand Venture Investment Fund and a group of private investors.

The firm has also become the first Kiwi start-up to secure funding from the China Angels, an angel investment group linked to local business incubator The Icehouse made up of Chinese investors who reside in this country.

Auckland investment firm Pacific Channel already held a cornerstone shareholding in Footfalls & Heartbeats and its head, Brent Ogilvie, has become the smart fabric company’s managing director.

Ogilvie said the company’s first commercial application was a smart compression bandage, which would be used for wound care.

“We’ve signed an agreement to advance that [bandage] with a company in the US and we’re about three months from having a prototype.”

Footfalls & Heartbeats said other areas its product could be used in included monitoring of infants, stroke patients, athletes and workers in high-risk environments. There was even potential for it to be used to measure mechanical stress in satellites, aircraft wings, wind turbine blades, yacht hulls and high-performance cars.

Ogilvie said the firm planned to license its technology to other companies. The compression bandage was not expected to face any regulatory hurdles and it shouldn’t be “many more months” after the prototype is released before the product enters the market, he said.

Footfalls & Heartbeats was founded by Kiwi chemistry researcher Simon McMaster, who is now based in Britain.

AUT University and AgResearch have also been involved in the development of the fabric.

First published in the New Zealand Herald on Thursday June 6 2013

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NZ fashion firm crowdfunded to $170k

Kiwi clothing brand start-up which set out to raise $20,000 through a crowdfunding campaign has been left stunned after receiving more than eight times that amount.

Ohakune-based Opus Fresh was looking to get off the ground with enough money to fund the initial production run of its locally-sourced merino wool clothing line.

After turning to US crowdfunding website Kickstarter, the company has ended up raising US$139,000 (NZD$172,000) from 638 backers, with two days still to go in the two-month long campaign.

James Simpson, who founded the brand with partner Laura Currie, said people from all over the world had bought into the brand story and the product.

“We’ve got a good product but I think the story we sold was something a little different to what everyone else has done.”

Opus Fresh aims to produce garments for fashion-conscious travelers and outdoor enthusiasts. The brand tagline is ‘Adventurewear that doesn’t look like adventurewear’.

The massive funding boost meant the business could take its product to the market as a self-funded entity.

“We’re now in a pretty strong position not having to give up as much of the company. If we were to try and raise US$140,000 from scratch just off the idea or business plan, most likely we’d have had to give up 51 per cent of the company.”

Backers do not get shares in the company, but are given rewards ranging from a thank – you video for people putting forward small amounts to clothing packages for backers pledging US$79 or more.

Most backers were in the 25-40-year old age bracket and 98 per cent had pledged enough money that they were effectively pre-purchasing items of clothing.

We’ve heard from a lot of people who want to stock it but our sole focus at the moment is delivering to backers.”

Crowdfunding websites raised US$2.7 billion worldwide last year, an 81 per cent increase on 2011, according to a study conducted by research firm Massolution.

First published in the New Zealand Herald on Friday May 31 2013

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Safety-vest light system attracts international clients

Auckland start-up Lightknight has just begun selling its worker illumination system but the firm already has an impressive list of customers and is focused on taking the New Zealand-developed technology worldwide.

The St Johns-based company has created a lightweight, waterproof lighting system that can be retrofitted to existing high-visibility vests, which it says makes users stand out more at night than they would wearing conventional safety gear.

Managing director Mario Vulinovich said the potentially life-saving electro-luminescent technology solved the problem of conventional vests being ineffective after dark.

In addition, the Lightknight system could be transferred to new vests as older ones wore out, he said.

Funding, including from Auckland’s Ice Angels investment group and the Government-backed New Zealand Venture Investment Fund, was secured in 2011.

The Lightknight system, which is manufactured in China, was launched late last year and its local customers already include construction firms Fulton Hogan and Fletcher Building, as well as the Auckland Motorway Alliance, which is responsible for the upkeep of the city’s motorways.

Across the Tasman the Victoria Mounted Police are testing the technology, with the illuminated strips going on the horses’ backsides as well as riders.

Australian construction firm John Holland, and Leighton Contractors – which provides services to a range of industries including mining, infrastructure and telecommunications – have also ordered units. Ports of America, which operates 42 ports in the United States, and global miner Rio Tinto had ordered trial units.

The Lightknight system costs $195 a unit, plus $10 for each retrofitting.

He said the Ice Angels investment had allowed the firm to establish a solid board of directors.

Lightknight’s chairman is Ron Halls, a New Zealander who was the chief executive of international footwear retailer Foot Locker from 2006 to 2011.

Also on the board is Nigel McLisky, Sigrid’s father, who co-founded Innovair, the developer of the RoboCan pest control product that was sold to household goods giant SC Johnson in 2008.

Vulinovich said there was potential to supply to consumers, including cyclists. He added that Lightknight was likely to break even by the end of this year.

First published in the New Zealand Herald on Thursday Mar 14 2013

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Forbes praises LanzaTech

New Zealand-founded biotech company LanzaTech has been included in a Forbes Top 100 list of America’s most promising privately held companies.

LanzaTech’s technology converts waste and low-cost resources into sustainable, valuable commodities. It uses a microbe to convert gas from industrial sources like steel mills, processing plants and agricultural waste into fuels and chemicals.

The clean energy and renewable chemicals technology company was ranked 48th and was the only clean energy or bioscience firm in the top 50.

Headquartered in Illinois but with its scientific base in Auckland, LanzaTech was founded in early 2005 and raised funding through grants and New Zealand-based angel investors.

US business magazine Forbes said it compiled the Top 100 most promising listbased on variables including growth, quality of management, team and investors, margins, market size and key partnerships.

Alongside its ranking, LanzaTech was described as having 125 employees and revenue of $4 million in the year ended December 31, 2012.

Forbes said the company raised US$56 million in venture funding from Khosla Ventures, Malaysian Life Sciences Capital Fund and others in January 2012.

Last year, LanzaTech was ranked number three on the list of the “50 Hottest Companies in Bioenergy” by Biofuels Digest, an industry website in the US.

The firm also made number seven on the list of the “30 Hottest Companies in Renewable Chemicals”.

In October, LanzaTech secured another US$15 million (NZD$18.3m) in funding from a Silicon Valley investment firm, which brought its total capital raised to date to more than US$100 million.

The company has indicated it may list on the NZX at some point.

First published in the New Zealand Herald on Thursday February 7 2013

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Heilala Vanilla secures investment

Tauranga-based Heilala Vanilla has signed an investment deal which will see the New Zealand Venture Investment Fund and Tauranga-based consortium Enterprise Angels BOP take a 45 per cent stake for an undisclosed sum.

Enterprise Angels involves 12 individual investors, including Kapiti Cheeses founder Ross McCallum and vodka brand 42 Below founder Geoff Ross.

Heilala sales and marketing manager Jennifer Boggiss said a huge capital investment and outlay went into developing export markets.

“We’ve started but there’s a long way to go and so not only are they bringing capital but they’re also bringing contacts and expertise, which is invaluable,” she said.

“We could have continued doing it ourselves and got there eventually but this is basically to fast-track it.”

The business was profitable but that was not a deal breaker for the new investors.

“They’ve got a long-term view and it’s all about building a brand.”

The investment deal would provide a capital injection to expand the business and ramp up exports to Australia, US and southeast Asia, while new opportunities in the US, UK and Japan would be explored this year.

Consumers were more aware of where their food came from and wanted to use quality ingredients, Boggiss said.

The company was focused on high-end food markets, including products for retail, food service and manufacturers, such as a packet of three vanilla pods and a jar of paste which sell for about $15 and $23 respectively.

Boggiss was an accountant and her husband worked in information technology, when in 2005 her father brought back the first vanilla pods from the Tongan plantation.

“Then, we wouldn’t have envisaged what we’re doing now so it’s definitely been bigger than what we expected and more exciting.”

First appeared in the New Zealand Herald on Tuesday Feb 7 2012

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Timelapse camera gadget raises double on crowd-funding site

Instead of hitting up banks for loans or approaching angel investors and venture capital players, Queenstown entrepreneurs Chris Thompson and Ben Ryan listed on Kickstarter, an internet-based platform that solicits donations in exchange for a rewards – to create their dream camera gadget – a motion control timelapse device.

Genie, the flagship product of design company Syrp, has blown all expectation out of the water.

Within six days of listing on Kickstarter the Genie had hit its funding goal of US$150,000. Just two days later it was at US$220,000.

This week the campaign closed with US$636,766 pledged to the project – double the “dream amount” of US$300,000 they hoped to raise.

Ryan says pledges, consisting mainly of pre-sales, provide validation for what they are doing.

It was proof that there was a genuine market for the Genie, that gave Kickstarter the edge over traditional funding methods.

They did consider getting an investor on board but decided it was expertise and passion for the product that was more important than a cash injection.

Increasingly it’s technology entrepreneurs using Kickstarter as a way to get funding and test the market appetite for products.

Not every crowdfunding campaign has been a roaring success – about 44 per cent of Kickstarter projects hit their financing target last year – which may also reflect the challenges of crowdfunding as well as project viability.

The online buzz around Genie has created some “crazy marketing benefits”, Ryan says.

“You’re instantly known by the whole film community and your product is just out there in the whole global market within four to five weeks, so that’s a massive advantage.

“Something you could spend a year or two trying to do, through Kickstarter it’s done and happening in a week.”

Thompson, an industrial designer, has prior experience dealing with Chinese manufacturers and is using established contacts to produce the Genie.

“It’s not uncharted territory for us,” Ryan says.

The pair is also likely to crowdfund future updates and accessory add-ons to the Genie.

For them, Kickstarter has meant their dream gadget has become a reality.

Kickstarter and Indiegogo, two of the most popular “in-kind” funding platforms take pledges as small as US$1 in exchange for rewards, most commonly the end product of the campaign. Campaigns on Kickstarter are only funded on an all-or-nothing basis. People who only receive $2000 worth of funding aren’t expected to complete a $5000 project.

It also allows people to test concepts in the market without having to follow through if it doesn’t receive enough support.

There are no up-front fees but Kickstarter takes 5 per cent of the final amount raised if the goal target is hit and Amazon, which processes the payments, takes 3 to 5 per cent.

People creating a campaign on Kickstarter don’t have to be a US citizen but permanent US residency, social security number, bank account and other credit criteria need to be met to enable payments via Amazon.

Since launching in 2009 more than 24,000 projects have been funded to the tune of US$250 million by 2 million people.

Indiegogo is more accessible to international projects, with Pay Pal and bank wire services handling payments, but non-US projects attract additional fees.

First published in the New Zealand Herald on Saturday July 7 2012

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Biomatters named on Deloitte Fast 50

Focusing on the US is paying off for New Zealand software business Biomatters, which is reporting a 50 percent increase in sales revenue for 2011.

Biomatters is a privately held company and exports to 80-plus countries. It was recently placed in the Deloitte Fast 50 index of New Zealand’s fastest growing businesses for the second year running. At the end of last year Biomatters was also ranked among the top 10 “hot emerging companies” in the New Zealand Technology Investment Network’s annual survey of technology businesses.

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Wireless car charging tech grabs global attention

The University of Auckland spin-off company has invented a way of charging cars quickly and wirelessly by induction via a doormat-sized plate in the ground that matches a plate beneath the car.

It was announced that its assets, technology and employees have been snapped up by Qualcomm; HaloIPT’s staff will now join Qualcomm’s European Innovation Development group based in the UK.

HaloIPT executive chairman John Miles said in the space of 18 months, it had brought “world-class university research to the attention of the global automotive industry”.

Qualcomm has been investing in wireless power for years. Although it sells wireless equipment and software, it gets more profit from licensing wireless technologies – and licensing is what the company has in mind for HaloIPT’s award-winning technology, according to Andrew Gilbert, executive vice president of European Innovation Development.

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Mesynthes wins gold for R&D

Lower Hutt firm Mesynthes is gearing up to take the plunge in the lucrative United States wound care market and has set its sights on the bigger business of soft tissue repair.

The company took out the supreme award at the Wellington business Gold Awards last week, as well as the research and development award for its work developing a regenerative tissue substitute.

Total investment in the company to date has been about $4 million plus $1m in grants from New Zealand Trade and Enterprise and the former Foundation for Research, Science and Technology.

It will need a further $4m-5m in investment to advance product development and get sales momentum, and is looking to investors at home and in Australia and the US.

Startups plug into Silicon Valley

Tauranga is about to increase it’s profile, and exposure, in the fast-moving world of information and communications technology (ICT) with the launch of Wharf42, established by Pingar chief executive Peter Wren-Hilton.

Wharf42 will help the country’s smart, start-up software businesses set up in the home of technology, California’s Silicon Valley.

Mr Wren-Hilton and his wife, Jacqui, spent six months last year setting up their own operation in the famous valley full of entrepreneurs – and they now want to pass on their experiences and support for other ambitious ICT companies.

“New Zealand has an active technology sector but the start-ups don’t grow because they don’t go out of the country and they are restricted by the size of the market here and access to capital,” said Mr Wren-Hilton.

“Wharf42 will be creating a system and process to fast-track some of New Zealand’s most exciting start-ups and become a connector/conduit to get them into Silicon Valley.”

In the valley, the bright New Zealand companies will become involved with “an ecosystem” of other start-ups from around the world, angel investors and venture capitalists, and potential large technology partners such as Apple, Microsoft, Google, Yahoo, Facebook, Twitter, Intel and Oracle.

“We want to see more $100 million New Zealand software companies rather than hundreds of $1 million businesses,” said Mr Wren-Hilton. “You cannot grow on to the international scale by keeping your business here.”

Wharf42 will organise the companies to be located in the Plug and Play Tech Centre, already home for 300 start-ups in Redwood City and Sunnyvale, which is in the heart of Silicon Valley.

A number of venture capital and angel investor groups are also based at the centre, aiming to invest in the smart software companies.

Mr Wren-Hilton said 180 venture capital networks had raised US$650 million ($780 million) in four years for the start-ups in the tech centre.

Companies would retain their research and development and intellectual property in New ZealandBut in the valley they could forge ahead with business development and sales and marketing teams to grow their businesses. The owners can catch Air New Zealand NZ7 on Friday to San Francisco and rock up to work in the Plug and Play on Monday.

When they first arrive in Silicon Valley, the Kiwi companies will become part of a 10-week Plug and Play programme, known as start-up camp.

They will be introduced to every aspect of the valley, and will be encouraged to fine tune their technology and their presentations.

At the end of 10 weeks, they will participate in the Plug and Play Expo and present to an audience of 400 Silicon Valley representatives, including 80 venture capital companies.

The Kiwi companies will be given every opportunity to shine.

The Plug and Play centre also organises 120 events a year and the start-ups can attend free of charge.Andy Hamilton, chief executive of Auckland’s Icehouse, said Wharf42 provided a great conduit for Kiwi technology start-ups to get to Silicon Valley in a timely and efficient manner. In the past, this had been a somewhat complex process and Wharf42 would be a great partner for organisations such as Icehouse, which is constantly working to identify and grow the next generation of entrepreneurs in New Zealand.

“Their innovation centre will be a physical building and we can provide the tenants,” he said. “I believe a significant ICT beachhead can be established in the city and the region.”

First published in the New Zealand Herald on Wednesday March 21 2012

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Online fun a money-spinner

Game that teaches children about music can be a major money-spinner, believes entrepreneur Chris White, founder of Big Little Bang, an online 3D virtual world for children aged 7 to 14.

MTV Networks paid US$160 million for Neopets in 2005. Two years later Disney bought Club Penguin in a deal valued at US$700 million (US$350 million upfront, with the remainder dependent on the online game achieving revenue targets). In Britain, Moshi Monsters is estimated to be worth US$200 million ($242 million) after a founding director sold his stake in the company last year.

These are the sort of numbers that White believes will fire investor enthusiasm as he seeks expansion capital to further develop Big Little Bang, particularly in the United States. Stephen Tindall’s K1W1 fund and angel investor Sparkbox Ventures provided initial seed capital, and have committed to the expansion capital round. Other angels provided additional funding to develop the prototype into a commercial game, which launched in July.

It now has more than 31,000 players, more than half of them American children, despite the game only becoming available state-side before Christmas. White is now in the US seeking “accelerators and incubators” to help fast-track Big Little Bang’s growth.

“We’re looking to hit the break-even point in the next 18 months and at that point really accelerate our growth to hundreds of thousands of new users each month,” says White.

White’s game is about socialising and creating music in space, using planets, rocket ships and musical wormholes. As a former music teacher, this website strikes me as an astonishing amalgam of creativity and commercial exploitation. It comes as no surprise to learn that Mike Chunn, music legend and advocate for making music the building block of learning, was involved at an early stage.

The Big Little Bang idea is a great example of the creative fostering that is now embedded in New Zealand corporate culture.

White, who has a master’s degree in creative arts and a bachelor of science, has been through the Spark programme, was adopted by the Icehouse business incubator (“I had access to the executive in residence”) and was assisted in forming relationships with the Massachusetts Institute of Technology and the University of Santiago.

Revenue is rising and he’s confident a bright future awaits.

First published in the New Zealand Herald on Monday February 6 2012

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