SwipedOn CEO explains how his Tauranga SaaS startup went global

SwipedOn is a fast-growing Software-as-a-Service (SaaS) that is used in more than 2000 cities worldwide, and it all started in the Bay of Plenty.

The company provides an iPad-based visitor management system that replaces visitor books, which has proven hugely popular in the UK and US, as well as Canada, Australia, and New Zealand.

According to CEO and founder Hadleigh Ford, there’s no reason why New Zealand can’t have its own Silicon Valley based right here in the Bay of Plenty.

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Rockit Global’s mini-apples grow maxi-value

Rockit markets the miniature Rockit variety apple snacks and can’t keep up with demand. The apple snack is grown in both hemispheres with Rockit holding variety rights.
Pioneer Capital and Oriens Capital’s purchased Mr Alison’s stake in March.
“This result, while not cash-in-the-pocket, is a great outcome for the angel investors in these companies, the early-stage investment community and the agtech sector in New Zealand,” Mr Murphy said.
“Not only does it demonstrate that it is possible to get close to that mythical 10x return but that it’s possible to achieve that in a New Zealand food/agtech company. That’s something we’ve been working on for years.”
Enterprise Angel investors first invested in Rockit Global Limited (then called Havelock North Fruit Company) in 2011 and in the Rockit Orchard Limited Partnerships, becoming the first large-scale growers of the Rockit apples variety in 2012 and 2014. They formed the board of Havelock North Fruit Company Limited (now Rockit Global Limited) and guided growth thanks to expertise in the kiwifruit industry.
Last year Rockit exported 77 containers and earned its first profit while a wrestle for control between Mr Alison and six other shareholders went to the High Court. Mr Alison owned the largest single share in the company and had sought to buy the others out, instead bowing out a wealthy man this year.
“Securing funding as Rockit has from New Zealand private-equity growth investors is very significant and something I hope we see a lot more of in future,” Mr Murphy said.
“It sends a signal to the early-stage investors and entrepreneurs that it is possible to achieve post angel-round funding to better position young New Zealand companies to provide substantial investment returns.”
Rockit chairman John Loughlin said it was very positive that high-calibre growth equity investors such as Pioneer and Oriens recognised “the tremendous potential” in Rockit and would contribute governance expertise and additional capital to help the company deliver on “ambitious” growth plans.
Mr Murphy said Mr Alison did a great job in identifying “the lovely little apple” and a successful marketing strategy.
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Bay of Plenty investors take control of Rockit apple company

An argument over the ownership of the high-profile company responsible for producing the miniature Rockit apples has been resolved, with Bay of Plenty-based Oriens Capital and Auckland’s Pioneer Capital buying out company founder Phil Alison.
The Havelock North Fruit Company had been producing the apples, which are marketed in plastic tubes as a high quality snack food in New Zealand and internationally.
Mr Alison, who controlled a 49.5 per cent share of the company, originally wanted to buy out the remaining shareholders, which included a number of prominent Bay of Plenty investors. The disagreement went to the High Court last year after the parties failed to agree on price.
However, the company announced yesterday that an agreement had been reached by the shareholders under which the two experienced private equity companies would acquire all of Mr Alison’s shareholding. The transaction was also significant in being the first investment by Oriens Capital, the regions-focused Tauranga private equity firm launched last year.
Mr Alison has sold all his Rockit-related interests and would no longer be involved with the company, its subsidiaries, or related orchard suppliers of fruit.
Effective immediately, the company would begin trading as Rockit Global Ltd. Acting chief executive Austin Mortimer has been appointed chief executive of Rockit Global.
Chairman John Loughlin said the value of the transaction remained confidential.
Rockit snacks were now grown in seven countries and sold through partners in 22 countries, he said. In 2016, the company exported 77 containers of fruit and earned its maiden profit.
“With only 3 per cent of Rockit apple snacks sold in New Zealand, our sales and marketing focus is on key international markets,” Mr Loughlin said.
“We have strong growth plans for 2017 and the years ahead. The new shareholders have experience in growing New Zealand export businesses. They will contribute governance expertise and additional capital to help the company deliver on its ambitious growth plans.”
The Rockit Global board will include four members of the previous board – Mr Loughlin, plus well-known Tauranga investors Murray Denyer, Steve Saunders and Neil Craig. They would be joined by Oriens Capital chief executive James Beale and Pioneer Capital investment director Craig Styris.
Mr Loughlin said Mr Alison had made a huge contribution in recognising the potential of the fruit, then establishing and leading the business toward building the Rockit global brand.
“We will always be greatly appreciative of the work he put in to creating the international platform for the business,” he said.
Mr Denyer, a partner with Cooney Lees Morgan, Steve Saunders, founder of the Plus Group, and Neil Craig, founder of Craigs Investment Partners, are all Tauranga members of the Bay of Plenty’s Enterprise Angels start-up funding group.
“This is a major milestone for us,” said Mr Denyer.
“Bringing Pioneer and Oriens Capital into the business strengthens our share register enormously, and gives us access to their business expertise and experience,” he said.
“It’s also a success story for Enterprise Angels. Steve, Neil, John McDonald and myself all invested into this business back in 2011 when the founder first sought to raise capital. We’ve worked very hard to get the business to where it is today – to a point where it has gained the attention of and attracted investment from private equity players. It has graduated out of the angel investment space – something that few start-ups ever manage.”
Mr Mortimer described Rockit as significant New Zealand success story.
“It clearly demonstrates how high-quality fruit can be positioned as a premium, value-added product through a robust brand strategy. Rockit Global is now well-positioned to continue its rapid growth and capitalise on the substantial grab and go, healthy snack market.”
Rockit Global
– Rockit are miniature apples (1.5 x the size of a golf ball) with a sweet flavour, thin skin, and distinctive bright red blush.
– North Havelock Fruit Company worked with Plant & Food Research, together with Hawke’s Bay company Prevar, to develop the apple.
– Rockit Global now has the exclusive international licence to grow and market the PremA96 apple variety.
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Bay of Plenty angel investors facing challenges

Experienced American angel investor Brian Cohen has warned the New Zealand industry that the local capital cycle is stunted.

“You’re not in the investment business – you’re in the exit business,” he said, in comments delivered at the recent Angel Association of New Zealand annual Angel Summit. “Your job is to make money, stop being so nice.”

Bill Murphy, executive director of the Bay of Plenty’s Enterprise Angels, the country’s biggest angel group, said the warnings were well taken by the local industry.

“The most experienced investors in this space are getting more and more discerning about what they invest in and in ensuring everything is in place to make that investment a success,” he said.

“It’s getting more difficult to raise money for investment opportunities, which reflects that. But it’s also a reflection of where the industry is at here – we’ve only really had an angel community for the past decade or so, whereas they’ve been going for twice as long in the US and Europe.”

Mr Murphy said because so far there had been relatively few liquidity events from very early stage investments, it was not yet clear whether there was an additional challenge and risk for those investing in New Zealand companies, compared to the risks facing American or European investors operating in their home markets.

“In our case we invest in these companies and then we have to take them into the international market. And we’re just not sure how much risk that adds.”

Enterprise Angels provided a copy of remarks made by Mr Cohen – chairman of New York Angels, the world’s biggest angel network, who was one of the international keynote speakers at the summit.

Mr Cohen said New Zealand appeared to have a great angel ecosystem

“It’s full of enterprising people, there is a good level of government funding into universities, centres of excellence and crown research institutes producing great intellectual property,” he said.

“And ‘top of the pipe’ activity, including incubation and acceleration, seems very active – your entrepreneurs do more with less. They are working hard to succeed despite the gaps in your system.

“What’s missing, and crucial to your future as a globally attractive incubation nation, is the depth of capital to grow New Zealand companies to a size where they are attractive and competitive in international markets. Your capital life cycle is stunted.”

Mr Cohen told delegates at the event that they were responsible for this, and must get serious about fixing it. Promising companies which are being seeded and started would wither and die if they didn’t, he said.

Mr Murphy said the New Zealand Angel environment was dynamic, with a lot of investing going on.

“But there are still lessons to be learned about backing the best investment opportunities and then being able to take those companies them right through the cycle. The critical stage for all parties is the liquidity event.”

Anne Blakeway, investor relations manager for Enterprise Angels and its recently created online investor platform AngelEquity (see box), said the Mr Cohen’s comments aligned with those heard from founders and business angels.

“They need follow-on capital to address the market opportunities they are developing,” she said.

“If we don’t get more investment into them, by making it possible for more investors to get into this space, we’ll limit their chances of success. They’ll miss out, and so will New Zealand.”

First published NZ Herald – 11 Feb 2017

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Preparing the ground to grow strong companies

The confirmation that new Tauranga-based private equity fund Oriens Capital is on track for a $30million first close is great news for the region’s business sector.

Oriens Capital’s executive team have noted it will not focus exclusively on the Bay, with other regions also likely to be targeted.

But a key driver of setting up the new fund was to help close the gap in the Bay’s entrepreneurial and funding ecosystem.

The reality is that no other region outside the major metropolitan centres has the supportive infrastructure of experienced investors to pull together a $30 million-plus private equity fund.

The Bay has long been the home of the country’s largest angel investor group, Enterprise Angels, with 200-plus high-net-worth members from Tauranga, Rotorua, Taupo and the Waikato.

Tauranga is also the base for WNTVentures, the only regional entity to get the nod from Callaghan Innovation when it backed a series of new technology business incubators 18 months ago.

Oriens Capital will be focused on lower mid-market companies with enterprise values of $10 million to $50 million and potential investments ranging from $3 million to $10 million.

But Enterprise Angels executive director Bill Murphy says Oriens Capital could still potentially provide backing to some companies emerging from the angels funding system.

While Enterprise Angels’ investments typically top out at around $2 million, Mr Murphy notes electric offroad bike company Ubco is targeting $2.5million in its current round.

Meanwhile, WNTVentures is focused on identifying innovative companies at the very early stage.

“We are about the development of intellectual property,” says chief executive Carl Jones.

WNTVentures has backed four companies with investments ranging up to $600,000, with two more currently going through due diligence.

First published on nzherald.co.nz 21 June 2016

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Ubco charging ahead to meet target By David Porter

Ubco, the Bay of Plenty-based offroad electric bike manufacturer, is on track to meet its minimum $1.5 million target in second stage funding and is aiming for a maximum of $2.5 million.

As well, Timothy Allan, founder of Tauranga industrial design and development company Locus Research, which has worked closely with Ubco’s co-founders in developing the bike, has now taken on the role of chief executive. Mr Allan will be restructuring his role at Locus in order to commit to the bike company.

“Ubco has been through a thorough due diligence process with Enterprise Angels and the company has good support,” said Enterprise Angels executive director Bill Murphy.

Ubco pitched to EA in February. Firm commitments now sit at $1.22 million, said Mr Murphy, who added that EA member Deion Campbell was joining the Ubco board in his capacity as a private investor in the startup. Mr Campbell is general manager generation for Trustpower.
Ubco’s funding is expected to come from a mix of EA members, matching funding from the Seed Capital Investment Fund and the angel group’s sidecar fund, as well as other wealthy private investors and regional funds.

Mr Allan, who returned on Monday from a trip to China to commission Ubco’s second production line and liaise with suppliers, said he was confident the fundraising was building healthily towards the total.

“It’s looking pretty good,” he said. “I’m hoping we will hit our target of $2.5 million. We’ve got some other interested investors doing due diligence at the moment, and we’ve also got interest from a couple of offshore investors.”

Mr Allan said Ubco hoped to close its funding round this month.

The company has also recently concluded a partnership with Blackhawk Tracking Systems, which makes advanced GPS tracking systems. “This gives us a technology platform that relates directly to the bike’s communication,” he said, adding that Blackhawk chairman Keith Oliver would be also joining the Ubco board.

Ubco has now fulfilled its pre-orders and is ramping up production and building up its team. The company recently hired former BMW mechanic Gareth Hills to supervise production. Mr Allen said the company was now recruiting for leadership roles in product and technology, sales and marketing, and operations and logistics.

Co-founder Anthony Clyde, who also runs his own company importing electric bicycles, was likely to scale back a little to more of a director role in the next phase, said Mr Allan. Meanwhile the other co-founder Darryl Neal was expected to serve as a design director.

The next major long term project for the company would be developing a road legal version of the Ubco electric bike.

Locus founder to focus on electric bike firm
Timothy Allan will restructure his involvement with Locus Research, the design and
development company he founded more than a decade ago, to focus on his new role as chief executive of offroad electric bike company Ubco.

“I’m stepping back from my roles at Locus and that is being discussed at the moment with the various parties,” he said.

Locus Research, based out of the Newnham Technology Park in Te Puna, Tauranga, is a product development and innovation consultancy. It has become a key player in the Bay’s entrepreneurial ecosystem and has been deeply involved in the development of a number of first-to-market products, including the Inverse Hair Treatment System and the Balex Marine Automatic Boat Loader.

Founded by Mr Allan in 2002, Locus has increasingly been taking equity stakes in companies it has worked with, including Ubco. Mr Allan said he estimated he had been spending around half his time on the electric bike company in recent months.

“I think Ubco has wheels, no pun intended,” he said, adding that taking on the chief executive role offered a different opportunity for him.

Mr Allan said Locus was evolving and would probably seek outside investment for the first time in order to go after more opportunities where it could become deeply involved in startup companies, rather than just provide contracted services.

“We’ve been fairly stretched over the last six months with the level of support we’ve had to supply to all of the startup companies we’re involved with,” he said.

He envisaged the senior Locus team would be stepping up, and he would be adding a couple more staff. But he will continue to be involved in the company, particularly in terms of selecting companies where Locus will take an equity stake.

The Locus ownership structure would not be changing, and the team had been getting used to his changing role.

“But we will be putting in place an employee share options scheme to make sure the key people have a stake in the outcomes and successes. A lot of them have put a huge amount of time into the various companies,” he said.

Ubco:

* Co founders: Whakatane-based Antony Clyde and Wellington-based Darryl Neal.

* Design and development: The founders, together with Tauranga’s Locus Research.

* Manufacture and assembly: Core components are built in China and assembled in Tauranga.

First published on nzherald.co.nz on 4 May 2016

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Comvita announces Denyer in board position

NZX-listed Bay of Plenty honey and health products company Comvita has announced the appointment of Tauranga lawyer Murray Denyer to the board, effective April 1.

The Cooney Lees Morgan partner is well-known in the region’s investment community and serves with Comvita chairman Neil Craig on the board of early stage funding group Enterprise Angels.

Mr Craig, speaking from Hong Kong where the full Comvita board are currently on a trip to deepen their understanding of the China markets, said Mr Denyer’s qualifications included the fact he was local, his age and his commercially focused legal background.

“Having a legal brain around the board table is a good idea when we’re doing such a lot in the acquisitions space.”

Mr Denyer would be put up for re-election in October at the annual general meeting, when he will take over the role of chair of the Remuneration & HR Committee from Dr David Cullwick.
“Comvita has some quite progressive share schemes and we brought him on six months early so he could get his head around that with David,” said Mr Craig.

Mr Denyer began his career with the Ministry Foreign Affairs & Trade in 1993, then went into private practice and was eventually headhunted to join Zespri in Tauranga in 2003. He spent almost six years with Zespri, ending up as general counsel and board secretary.

In 2009 he came on board at Cooney Lees Morgan and was elected to the partnership in 2010. Mr Denyer also served on the board of Priority One for eight years.

Mr Denyer, who is also currently in Hong Kong, said he was really excited about his new role.

“It’s a local company that I’ve followed for a long time and it’s very much part of our local Bay economy. I’ve always been very passionate about export businesses and this is one. There’s a lot of things I’ve done over my career that give me the right skill-set to put my shoulder to the wheel and make some contributions there.”

First published on nzherald.co.nz on 5th April 2016

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Angel connections help ideas grow wings

This great story illustrates “the eco-system in action” with Enterprise Angels and WNT Ventures working together to create the angel food of the future…

The boss of Bay of Plenty startup funding group Enterprise Angels says it is working closely with WNTVentures.

“We’re able to refer opportunities that are at too early a stage for Enterprise Angels to WNTVentures, and we’re able in all kinds of ways to be able to give more certainty to that next round of funding at the angel stage,” executive director Bill Murphy said.

Enterprise Angels is a shareholder in the incubator through its sidecar fund EA1, and sits on its investment committee. That involvement could include providing expert guidance and appropriately qualified directors for the incubated company.

Mr Murphy said the Scion nanofibre research was at too early a stage for angel investors because the commercial possibilities were still being worked out.

“We’re really pleased to see Scion is able to take some of its really cool research into WNT and give us the opportunity to invest in it at a later stage.”
WNTVentures chief executive Carl Jones said the incubator to date had three companies that had received the full $600,000 available from a combination of Callaghan Innovation repayable grants and the incubator’s 1:3 matching funding.

Bay of Plenty-based Onesixone has developed a software-hardware solution, which bridges the gap between industry standard DJ software and entertainment lighting systems.

IPO, based in Dunedin, is developing a point-of-care bovine mastitis diagnostic test, which will guide antibiotic treatment decisions. The technology only requires minimal laboratory requirements through vet practice or on farm, a simple sampling procedure.

Mr Jones said he was not yet able to provide details of the third company, which was in the software sector, for reasons of business confidentiality. There was also an agri-tech company at the same pre-incubation stage as Scion’s nanofibre project.

First published on nzherald.co.nz 12 August 2015

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