$1.75 million boost to new Kiwi company Thematic

Kiwi company Thematic has received additional $1.75 million in seed funding to add to its already impressive list of clients just six months after launching.

The company, which uses artificial intelligence to take the leg-work out of analysing survey data, was started by husband and wife team Alyona Medelyan and Nathan Holmberg.

They were recently accepted into one of the world’s most exclusive startup accelerator programmes, Y Combinator, where they had the opportunity to pitch their business plan to Silicon Valley’s biggest names.

The company today announced it had received $1.75m in seed funding, led by venture capital firm AirTree Ventures. The fledgling business also received an investment from Y Combinator as well as a number of individuals and San Francisco-based angel investors.

Thematic already has big-name customers in six countries including Vodafone, Air New Zealand, Stripe, Ableton and Manpower Group.

“The aim is to grow the business further globally. The business is investing in new engineering, sales and marketing staff to fuel its growth,” the company said in a statement.

The founders now want to set up an office in the United States and start hiring sales people.
Thematic specialises in analysis of “free text” responses to targeted questions, which are the hardest to analyse.

“Our technology helps businesses to understand what their customers are saying at scale. It’s one thing to collect an NPS [net promoter score], it’s a whole different ball game to deeply understand the specific issues and themes driving that score,” the statement said.

Thematic’s technology enables clients to take into account written customer feedback —
the part of the survey that actually told companies what they were doing right and wrong.

Medelyan has a PHD in natural language processing and machine learning, while her husband and business partner, Holmberg, quit his job as chief architect for leading music software company Serato once the couple realised the technology’s potential.

First published in NZ Herald – 29th November 2017

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Capital Markets Report: Face the fear of missing out

New Zealand companies often have to look offshore to access the funds and networks they need to scale internationally. Two of them, Booktrack and Vend, have attracted much-needed capital. James Penn asked their founders about the state of international investment for high-growth Kiwi companies.
Aucklander Paul Cameron founded Booktrack along with his brother Mark Cameron in 2011. Booktrack’s technology allows soundtracks to be added to e-books to create an immersive reading experience.
Since launching they have secured investment from some of Silicon Valley’s most high profile figures, including PayPal co-founder Peter Thiel, and Mark D’Arcy, a Vice-President at Facebook.
Vaughan Rowsell is the founder of Vend, a rapidly-growing retail software company. Thiel has also invested in Rowsell’s company, and in December Vend raised $13 million in capital to fund their international growth. That raising included investors such as Square Peg Capital, Movac, and Sam Morgan’s Jasmine Investments.
Herald: When you sought capital investment in the United States, what were the drivers of that decision?
Paul Cameron: To help build networks in our target market.
Local investors opened up their networks to us and this enabled Booktrack to accelerate our business in the United States.
Vaughan Rowsell: As a SaaS (software as a service) company with a global footprint, we looked to the United States for capital, in particular Silicon Valley, because there is a deep capital pool looking to fund exactly our profile of business. We spoke to many Silicon Valley venture capitalists and ended up being funded by the overseas investment arm of one of the great Valley investors, Valar Ventures, which actively looked for New Zealand businesses to fund.
Herald: What challenges have you faced when raising capital in the United States as a New Zealand company?
Vaughan Rowsell: The biggest challenge is that United States venture capitalists (VCs) are not used to working with the risk profile of New Zealand companies — we are a 12-hour flight away, speak differently, have a non-American culture towards sales and marketing, and an alien legal structure to the companies they are used to investing in.
United States-based VCs rarely deviate from their hypothesis on what a great business for funding looks like, which is formed with United States-based companies in mind. When you have geography, culture, a new legal system and other things in the mix, and it comes down to comparing apples with apples, New Zealand companies have a bigger hill to climb.
I don’t mean to say it doesn’t happen or won’t happen, it’s just a system that is harder for us.
If you are willing to be United States headquartered or have a United States executive team, I am sure it would be different. For us, staying Kiwi has always been important so we have secured investment from outside of the United States.
Paul Cameron: Investing in a New Zealand entity can be challenging for a United States investor as New Zealand is not only geographically a long way away, but they also do not understand the foreign tax implications. Having a friendly capital gains structure in New Zealand helps with the tax issue (but still needs some explaining), and setting up your business in the United States and being there all the time provides assurance on the geographic issue.
Herald: What strategies have enabled you to be so successful in attracting capital from high-profile United States investors?
Paul Cameron: Being there, all the time. We only attracted investment from United States investors after spending a long time in the market building networks and understanding the local market. The Kiwi Expats Association (Kea) was a great resource to connect us with New Zealanders in the United States who had great networks. It is important that New Zealand entrepreneurs remember that our cultures are different even though we both speak English and watch the same TV shows. I once observed a New Zealand entrepreneur in the United States mistake a conversation on the Warriors to be about the New Zealand rugby league team and not the Golden State Warriors basketball team. New Zealand entrepreneurs need to think, act, and be local if they are going to attract US capital. That takes a lot of time and commitment.
We need to put more energy into making local investment dollars work for our tech sector versus cows, anti-personnel mines and property. We need to be able to tell dozens of high profile New Zealand success stories.
Vaughan Rowsell
Vaughan Rowsell: A few years ago we secured funding from Valar Ventures which is Peter Thiel’s vehicle to fund non-American businesses, and that immediately overcame the hurdles for us that you get with most other United States investors. They had the great idea that some of the world’s best companies will come from outside the States, and we are honoured to have been picked.
Herald: In your opinion, should more New Zealand companies be looking to the United States when embarking on seed and Series A capital raises?
Paul Cameron: The first question any New Zealand start-up trying to raise funds in the United States will be asked is “how much have you raised in New Zealand?” And then “why are you raising this round here and not in New Zealand?” New Zealand companies need really good answers to these questions if they have any chance of raising US capital. We New Zealanders sound and look funny to US investors, and while it might be cute, it is a super-competitive market for capital in the United States. New Zealand companies, especially at the seed stage, should always be raising in New Zealand unless they are already established in the United States, and have a good strategic reason to be seeking funds in the United States over New Zealand. Series A is a more likely stage to be approaching US investors for capital, but I would still try in New Zealand first as there are great funds like Sparkbox Ventures always on the look out for good deals.
Vaughan Rowsell: My advice to younger companies looking for capital is to look local, or at least over the Ditch. There is an emerging Australian Angel/VC base growing and a few New Zealand companies are finding success with them which is really exciting. Companies can also consider Singapore, but the further you need to fly the greater the pull will be to base yourself closer to the venture capitalist’s postcode. There are always exceptions to any rule, and for us that is Point Nine Capital, based out of Berlin, who again deviate from the usual profile of venture capital. They actively seek investment in world-class SaaS companies all over the globe, and have been very successful at that. It is my hope that more US investors start to follow Valar and Point Nine’s footsteps when they try and answer their own question, “Why are there so many damn world-beaters coming out of New Zealand?”
Herald: Is there more that our public and private financial sectors should be doing to ensure New Zealand companies can access US capital?
Paul Cameron: They already do a lot more than most people realise. Our Seed, Angel, Venture Capital and Private Equity funds and groups are well networked in the United States and leverage those networks for their investee companies. The Government, through NZTE, (NZ Trade and Enterprise), Mfat (Ministry of Foreign Affairs and Trade), Callaghan Innovation and Ateed (Auckland Tourist, Events and Economic Development) have vast investment networks that are working everyday to connect New Zealand companies with US capital.
Vaughan Rowsell: We attract attention by being awesome. It’s all a numbers game. If United States VCs feel like they are going to miss out on opportunities to invest in great companies that originate from New Zealand, then they will come here and invest.
In the meantime, we shouldn’t just wait and hope that happens. We should be doing all we can to help the current and future cohorts of amazing New Zealand businesses going global to make a dent and get noticed. The more successes we have as a nation in creating world-beating companies, the more attention we will get from the United States VCs and the rest of the world.
Herald: How do we do that?
Vaughan Rowsell: It’s a 15-year strategy. There is no silver bullet. Firstly, success in the industry begets success, so we need to do what we can locally to support the next Xero, Vend, Orion or Trade Me. We need to put more energy into making local investment dollars work for our tech sector versus cows, anti-personnel mines and property.
We need to be able to tell dozens of high profile New Zealand success stories. The importance of these stories are to inspire new people into starting businesses because they see how others have done it, and can literally sit down with the founders of companies making it and get advice. The stories also inspire future talent to go into technology careers and create the talent pool.
Herald: Are there any other important messages we should be sending regarding US capital investment in New Zealand?
Paul Cameron: There is plenty of capital in both New Zealand and United States for good Kiwi companies. For US investment, it really just comes down to the company strength, having great people involved, and a commitment to the United States market. Simple.
Vaughan Rowsell: Really simplistically, there are two choices: match the profile that United States investors look for in US companies, which often means becoming one and talking American; or decide you are a Kiwi-based enterprise and look to impress people who understand what awesome Kiwi-based businesses look like. In time, I hope FOMO [fear of missing out] brings more US capital to our shores, but in the meantime let’s create the FOMO.
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On the Grid: Weirdly don’t care about your $500 CV

There’s a revolution underway. Deep within the Auckland Viaduct lurks the beginnings of our own tiny Silicon Valley. At GridAKL, more than 50 startups, in industries as diverse as medicine, robotics and augmented reality, are running the entrepreneurial gauntlet looking to build a high-growth business – or at least a get a second funding round.

In On the Grid, a sponsored series with Auckland Tourism, Events and Economic Development (ATEED), we tell their stories. In this, the third instalment, recruitment revolutionaries Weirdly.

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NZ-born LanzaTech makes biofuel breakthrough for Sir Richard Branson’s Virgin Atlantic

New Zealand-born company LanzaTech has made an aviation biofuel breakthrough with partner airline Virgin Atlantic.

The company has produced nearly 5700 litres of low-carbon ethanol produced from waste gases for the airline, founded by Sir Richard Branson.

The company was founded in New Zealand 11 years ago and the parent company remains New Zealand-registered while its headquarters have moved to Illinois.

LanzaTech and Virgin Atlantic say they will work with Boeing and others in the aviation industry to complete the additional testing that aircraft and engine manufacturers require before approving the fuel for first use in a commercial aircraft.

“Assuming all initial approvals are achieved, the innovative LanzaTech jet fuel could be used in a first of its kind proving flight in 2017,” LanzaTech and Virgin Atlantic say.
The two companies have been working together since 2011.

The Lanzanol fuel was produced in China at the RSB (Roundtable of Sustainable Biomaterials) certified Shougang demonstration facility. The alcohol-to-jet process was developed in collaboration with Pacific Northwest National Lab with support from the US Department of Energy and with the help of funding from HSBC.

Sir Richard Branson said: “This is a real game changer for aviation and could significantly reduce the industry’s reliance on oil within our lifetime.”

In 2008 Virgin Atlantic was the first commercial airline to flight test bio-fuel flight – derived from coconut and babassu oil.
“We chose to partner with LanzaTech because of its impressive sustainability profile and the commercial potential of the jet fuel,” Branson said.

The airline’s understanding of low carbon fuels had developed rapidly over the last decade.

The company, which has received more than $14 million in New Zealand Government funding, shifted much of its previously Auckland-based research and development workforce to Chicago in 2014.

LanzaTech has raised more than US$200m from investors including Silicon Valley-based Khosla Ventures and the NZ Superannuation Fund, which has invested US$75m. Other investors included Sir Stephen Tindall’s K1W1 fund and Mitsui.

Its technology is based around steel production, which produces waste carbon monoxide (CO) gas, frequently flared to the atmosphere as carbon dioxide.

The process involves capturing carbon from the waste gas via fermentation to ethanol, which is recovered to produce ethanol feedstock for a variety of products, including aviation fuel.

Other airlines have trialled biofuel made from waste cooking oil, and in the case of Air New Zealand the Jatropha plant.

 

First published – NZ Herald 15 September 2016

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What can be learned from Silicon Valley?

The following interview with Jamie Rhodes, a serial entrepreneur and founder of Alliance of Texas Angel Networks, was conducted at the Asian Business Angels Forum and AANZ Summit 2015.

Jamie Rhodes talks about what New Zealand can learn from Silicon Valley.

You can meet a quality network of investors and experts in early-stage company growth, acquisition and exits in person by registering your place at the 9th Annual NZ Angel Summit 2016.

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How the queen of Silicon Valley is helping Google go after Amazon’s most profitable business

The first thing to understand about Diane Greene, the woman Google acqui-hired in November to transform its fragmented cloud business, is that she has the mind of an engineer.

Cool technology, elegantly designed and built, lights her up. Even her jokes tend to be geek oriented.

(A lifelong competitive sailor, she was a mechanical engineer who built boats and windsurfers before she became an iconic Silicon Valley computer scientist.)

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NZ tech firm raises funds, wins award

A local agri-technology company is on a high after raising $4.5 million for product development and research and being named the best AG-Tech start up in a Silicon Valley technology competition.

Engender Technologies has worked with two Centres of Research Excellence – the MacDiarmid Institute and the Dodds-Walls Centre – to develop technology to allow dairy farmers to manage the sex make-up of their herds.

It opens the way to a leading position in what’s estimated to be a $3.5 billion market.

Read more

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From the highs and lows of Silicon Valley

KIWI entrepreneurs don’t fail well, says Havelock North businessman Hal Josephson.

“We need to change the mind-set around failure,” he said.

“Unfortunately people here start businesses with friend and family money and may have mortgaged their house, so when you fail you want a crawl under a rock. There are huge ramifications for those types of failures.”

He said where there was a network of investors there was the luxury of “OPM” – other people’s money.

“I was in the United States last year doing interviews with entrepreneurs and investors around failure. The general notion in California is failure is a badge of courage – you have prepared yourself for the future. You are a higher-percentage opportunity because you won’t make those mistakes again.

“Risky investors expect 70 to 80 per cent of their investments to fail. So it is not so bad – you can come back for more money if you feel like you have something and you have a good rapport.
“For my money, if somebody has failed three times I’ll go for fourth. In the United States there is even a conference call FailCon. I wanted to be invited for the 3GO story because that hasn’t really been told.”

It was one of few failures in the 20-year entrepreneurial part of his career.

Hal Josephson talks easily of his 20-year entrepreneurial career on the ground floor of the tech revolution because he is planning to write a book, distilling learnings.

It’s a career of historic failure and success, before the terms “startup” and “angel investor” were coined.

It’s a career that started in the 1970s when the New Jersey teen at Ohio’s Antioch College bought himself a Sony video camera.

“People had never seen themselves on television – it was like a mirror out of time.

“I decided there was an opportunity around it – I didn’t know exactly what it was – and so I started out recording people’s events, ranging from weddings to people doing workshops or giving speeches and they wanted to see themselves and how they came across.”

When he graduated from college he saw further opportunity with cable television.

“The Federal Communications Commission mandated that all cable television operators who had more than 3500 subscribers had to offer what was called Local Origination Public Access Television.”

In 1976, his production company was hired by Grass Roots TV 12 in Aspen Colorado, making TV shows and helping people make their own.

“It was one of the first experimental community television networks that was funded by the Government and donations to basically to see what would happened if you empowered a community to have its own video production.”

His documentaries were picked up by PBS including one about Claudine Longet, who preceded OJ Simpson in that she hired a team of expensive lawyers to escape a murder charge after she killed her live-in boyfriend, Olympian ski racer Vladimir “Spider” Sabich in their Aspen Colorado home. The Rolling Stones wrote a song about her but didn’t release it until 2011 for fear of litigation.

At a New York conference Hal met a video producer and was asked to run workshops in Washington DC for the Episcopalian Church.

That led to Episcopalian Television Network asking him to produce a televised concert featuring John Denver.

“We uplinked it and we connected to cable systems that wanted to carry it around the world. We set up downlinks in parishes all over North and South America, so ultimately more than 100,000 people saw it. It was one of the first live television events.

“I literally walked away from that with a nice cheque, thinking, I could start a company around this.

“I pivoted – I didn’t even know the term at the time – my then video production company into a video teleconferencing and events company.

“About 18 months later, after getting some finance and doing some early work with a lot of the vanguard companies doing this, I gave a talk at the Rocky Mountain branch of Meeting Planners International about how they could run a meeting in multiple locations.

“A guy literally came up to me and said, ‘Teleconferencing is sexy, I’m going to take you public’.

“We decided to take our little company, which wasn’t even incorporated, and work with this guy.

“It was a micro deal on the Denver penny stock market in 1982. There were 37.5 million shares issued at 2 cents a share.”

The company netted $650,000, moved its headquarters to Denver “and we started going after real clients”.

In two years the company doubled its revenue and had $500,000 in the bank but its board decided it wasn’t scaling-up fast enough.

“They merged us with a company needing $500,000 and they took us private, buying everybody out.

“We learned a lot about stockholder management and how you had to put out press releases. A first client actually sued us for putting out a press release because we were forced by the board to announce we were working with one of the biggest companies in America. Their legal arm sued us saying, you must have a contract that says you can’t say you are doing that work for us. But actually they never put that clause in our contract.

“Myself and my partner cashed out. She ended up going with another deal that went public on the penny stock market and I was offered 1 million shares to go into my second deal, which they were doing at 10 cents a share for 30 million shares.

“Then I discovered a whole other range of things – my new partners were dishonest. I wound up having to testify against them 16 months later in front of the Securities and Exchange Commission.

“That was another education, picking your partners.”

With his partner in the first penny stock market company they formed “a company to form companies”.

“Her husband had been head of Bosch America and then Droidworks, one of the divisions of Lucasfilm, but he decided that he wanted to be a start-up entrepreneur.”

Success was “mixed” from 1985 to 1989 when he was asked to join a startup by Trip Hawkins, the original director of marketing at Apple. Trip had left Apple to start successful game company Electronic Arts.

He wouldn’t tell Hal what the new company was about unless Hal joined the venture and signed a non-disclosure agreement.

“I decided, he probably has a good idea so I’ll just go with it.”

The 3DO’s company’s objective was to create a new home video gaming system which was manufactured by various partners and licensees.

It was also a new business model – 3DO would collect a royalty on consoles and games.

“We licensed technology to a company that had no idea how to make money out of it and wouldn’t listen to us.

“Most unfortunately we lost over $100 million for our investors and likely $500 million for our big technology-licensing partners, Panasonic and Matsushita.

“It was a great four-and-a-half year ride and I managed to parachute out, unloading my stock, before the company tanked.”

Trip Hawkins asked him to organise an event.

“He wanted to build better connections between Los Angeles and San Francisco – Los Angeles was the entertainment capital and San Francisco was the technology capital and they weren’t talking to each other.

“He basically said, I want to throw an event for the top 700 people in the tech, film, TV games and entertainment business. They were all either major content producers or publishers and the major studios.

“At the time Matsushita owned Universal Studios, so they were our partner, and they wanted to see something like this happening.

“Trip said, what would it cost to throw a party for 700?

“On the spot I said “say $1 million” and he said, okay.

“I produced the inaugural Hollywood Meets Silicon Valley conference event called Lights, Camera, Interaction!”

Motorola’s PR firm approached him to produce a similar-style event with a $3 million budget, to lift the Illinois company’s West Coast profile.

“This event was big. I shut down Blue Man Group’s New York show and brought them to Los Angeles.”

The performance artists scored Intel TV advertisements on the back of the event and are touring New Zealand in May.

Hal was hired by Australia Multimedia Enterprises (AME) to be its Silicon Valley liaison, making 20 trips Downunder from 1996 to 1999 to evaluate companies.

“The Howard Government shut AME down and it was sold off to a venture capital firm Allen & Buckeridge.

“They asked me to come out and on that trip I met the head of international banking for Westpac. He was seconded to the private sector-led economic development programme for the Sydney Olympics.

“It ran on the periphery of the Games to basically create foreign direct investment in New South Wales.”

He became a consultant, which involved trips to New Zealand because it was a major trading partner.

He built a network of friends in Auckland and met his current life partner Trish Gilmore, originally from Dannevirke.

Hal continued doing regional economic development around high-profile events like the Beijing Games and Shanghai World Expo, escorting delegations of US business people keen to access China.

“I would basically spend 10 to 15 days in San Francisco and 10 to 15 days in Beijing
and Shanghai. I did 40 of those trips between 2003 and 2010.”

They moved to Hawke’s Bay and live in Havelock North where Hal continued creating events.

He attended Rod Drury’s Accelerate 2011, inviting along John Wander of Giantstep Angel Network from San Francisco.

The same year Hal organised the Make Social Media Work for You conference and found persuading keynote speakers to New Zealand was not always difficult.

He invited a “social media guru” Californian friend who said: “If you set me up to play Cape Kidnappers I won’t charge you a speakers fee.”

One hundred attended: 12 from Auckland, 36 from Wellington, 44 from Hawke’s Bay and Jon Leland had a great round of golf.

Hal said it was a “good first event” but he took up his “New Zealand job” with the Auckland University of Technology.

He is Program Chair for The Project – thought leadership events focusing on innovation and creativity in technology and business.

In 2014 the theme was Digital Disruption, in 2015 the focus was Taking Innovation Global and this year it is titled Creativity in Business and Beyond, all utilising his network of contacts.

Contacts drive his world.

“You don’t burn bridges – why would you unless there is a really negative reason? The only people I’ve burned bridges with were dishonest, or have tried to do something illegal or unethical.”

He said technology such as Skype could not displace spending time with people.
“The past 20 years of my life has been projects that grew out of my business relationships and my networks.

“Business is all about relationships. People move from one company to another, but the relationship remains. If you nourish it and it is important to you, it transcends everything, even being in different countries, and you end up doing more and more business.”

First published on nzherald.co.nz 24 April 2016

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Why New Zealand is punching above its weight in start-ups

New Zealand is a magical land of mountains, milk, sheep, rugby and fibre internet to most homes.

To this list we can now add: interesting technology companies.

In recent times, at least two genuine members of Silicon Valley royalty have poured money into start-ups born in the country.

Last week, Fairfax Media revealed that Sequoia Capital, which over the years has invested in the early stages of some of history’s most successful technology companies – think Apple, Google and Oracle – led a $10 million funding round for 90 Seconds, an Auckland based corporate-video marketplace.

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Sequoia Capital and Airtree lead $10m funding in Kiwi start-up 90 Seconds

Silicon Valley heavyweight Sequoia Capital has teamed up with Australian tech venture capital firm AirTree Ventures to pour $US7.5 million ($9.9 million) into New Zealand-based cloud-based corporate video start-up 90 Seconds.

Sequoia is one of Silicon Valley’s biggest names, having invested early on in several of the world’s most famous tech companies including Apple, Google, YouTube, Oracle, Instagram, WhatsApp and Airbnb.

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Silicon Valley / Silicon Dragon – Complimenting or Competing #ABAF15NZ

#ABAF15NZ: Silicon Valley / Silicon Dragon – Complimenting or Competing

What influence or roles does “the valley” play in approaches to scaling, building markets and creating value in Asia for liquidity success? How do we best access capital connections and customers across the two? Is that even possible for early-stage ventures?

Key note : #Jayesh Parekh (Jungle Ventures, Singapore)

Two promising New Zealand entrepreneurs discuss international scaling from the founders perspective.

# Jo Mills (Fuel50, NZ)

# Jonny Hendrikson (Shuttlerock, NZ)

DEBATE: “Silicon Valley can’t teach us much about scaling angel backed ventures in Asia”

Moderator : # Raiyo Nariman (Malaysia)

Affirmative :

# Marcia Dawood (Golden Seeds, USA)

# Eric Wikramanayake (Lankan Angels, Sri Lanka)

# Lee Bagshaw (Simmonds Steward, NZ)

Negative :

# Jamie Rhodes (Central Texas Angel Network, USA)

# Lucy Lu (Life Science Angels, USA)

# Jordan Green (Australian Association of Angel Investors)

Click here to watch video on youtube

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Angel Association attracts major global investors to NZ

Hosted by the Angel Association of New Zealand, the 2015 Asian Business Angel Forum takes place in Queenstown, New Zealand, 14 – 16 October 2015.

The event, an expertly curated, three day and completely investor-centric summit subsumes the AANZ’s annual summit this year.

It brings together leading investors from around the world to share their knowledge and join together in celebrating this small country’s big contribution to early stage investment.

The AANZ is pleased to have attracted a stellar line-up of international speakers who bring with them hundreds of investment experiences and personal involvement in the most significant international investment funds and angel groups.

Their combined portfolios include some of the biggest, most important and well known early-stage companies in the world.

Thought-leaders gathering to present at ABAF in New Zealand’s beautiful Queenstown’s include:

Jayesh Parekh – Jungle Ventures, 500 Startups and Mumbai Angels

David Chen – AngelVest

Sasha Mirchandani  – Kae Capital and Mumbai Angels

Nelson Gray – LINC Scotland, Firth Ventures and winner of the Queen’s Award for Enterprise Promotion for individuals who have played an important role in promoting enterprise skills and supporting entrepreneurs,

Bill Payne – ACA, Hans Severiens Memorial Award for Outstanding Contributions to Angel Investing and 2010 New Zealand Arch Angel Award for his impact on angel investing in New Zealand

Jon Medved – OurCrowd

Ian Sobieski – Band of Angels

Jamie Rhodes – ACA, Central Texas Angel Network (CTAN) and Texas into the Alliance of Texas Angel Networks

Marcia Dawood – ACA Board member, MD, Golden Seeds and Blue Tree

Allan May – Life Science Angels, Emergent Medical Partners

and Carolynn and Jon Levy – the legal team from the United States most successful incubator – Y Combinator, which has launched the likes of Airbnb, Dropbox and Stripe.

Register-now

To see the entire stream of social media as Angels actively connect New Zealand to the globe, the latest from international guests, hashtags and other social networks in one place click here.

Using twitter you can follow the Angel Association of New Zealand at @AngelAssn, and keep up to date with the Asian Business Angels Forum news and the event itself as it unfolds by using the hashtag #ABAFNZ15.

To meet and hear from New Zealand’s largest gathering of global investment thought leaders, along with a host of angels from New Zealand’s angel investment community in person secure your seat now.

There are only 30 places left at one the southern hemisphere’s largest and exclusive investor events Asian Business Angels Forum, Queenstown, New Zealand, October 14-15 2015.

 ABAF2015, NZ

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#ABAF15NZ Speakers – Marcia Rick Dawood, Jamie Rhodes

Meet the speakers #ABAF15NZ – Marcia Rick Dawood, Jamie Rhodes

A truly international trio rounds out an exceptional line-up of speakers at the 2015 Asian Business Angel Forum (ABAF) hosted by the Angel Association of New Zealand. ABAF event plays a pivotal role in bringing together speakers and delegates from 12 of the most active and connected early-stage investment ecosystems in the world.

Marcia Rick Dawood, Sasha Mirchandani, Jamie Rhodes all come to ABAF with intent to share a combined 100 years of experience in founding, finding, screening, funding, growing and exiting startups.

It’s an honour to welcome all three to Queenstown, New Zealand, from 14th until 16th of October to share their insights at #ABAFNZ15.

Register-now

Marcia Rick Dawood is on the Board of the Angel Capital Association (ACA) in the United States an organisation which represents over 12,000 accredited investor members, 220 angel groups and accredited platforms who have invested in well over 10,000 entrepreneurial companies.

Marcia is also Managing Director of Golden Seeds, an investment firm dedicated to delivering above market returns through the empowerment of women entrepreneurs and those who invest in them. The firm’s nationwide angel network is the fourth largest and most active in the US with 250 members. Its venture capital group has $35million under management. The firm, headquartered in New York, also has groups in Boston, San Francisco, Dallas and LA and has invested over $50million into 52 companies since 2005.

Syndication of deals between Golden Seeds and BlueTree Allied Angels is also lead by Marcia where she is also a member and Chairman of the Education committee. BlueTree’s focus is investing in regional, early-stage companies.

Not content with the ACA and 2 angel funds Marcia is Managing Director of OneHEEL Partners in Greater New York too. She focuses on helping businesses grow, through direct investment and expert consulting services. The firm also offer a laboratory with resources to grow, develop and encourage business ideas and investments, identifying those concepts with the highest potential, and providing the financial and business expertise required, leveraging the background and network diversity of its partner members.

She supports women led, impact as well as tech/life sciences and overall fun companies and is passionate about education as well as investment. In her 16+ year career prior to becoming an active investor she gained experience and success in operations, sales and marketing with Kaplan Higher Education Campuses (KHEC). She has also walked the road of an entrepreneur as a founder, owner/operator of a professional sports franchise.

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Jamie Rhodes is a serial entrepreneur and investor with deep experience in science and technology. He is co-founder of National NanoMaterials, manufacturer of Graphenol™, a functionalized form of graphene and previously founded Perceptive Sciences Corporation.

He brings over 30 years of experience managing investment in technology with him to his presentation at ABAF based on nine years in management at IBM, being co-founder of a venture capital funded start-up focused on the telecom industry (which IPO’ed in 2011) and, in the early years of his career, working with numerous start-ups, most notably National Instruments in its early stage. He holds both a Bachelor’s of Science degree and a Master’s of Science degree from the University of Texas at Austin.

A leader in his community in Texas, Jamie has been named one of ‘The 30 Most Influential People in Central Texas in the Last 30 Years’ by the Austin Business Journal and ‘Technology Volunteer of the Year’ by the Greater Austin Chamber of Commerce where he previously served on the board.

Among other advisory and governance roles Jamie also counts his position on the board of the Central Texas Regional Center of Innovation and Commercialization and the Texas Tri-Cities Chapter of the National Association of Corporate Directors, St. Edward’s University, Texas State University and the University of Texas. He is also an IC2 Fellow.

With the support of the GACC in 2006 Jamie founded the Central Texas Angel Network (CTAN), which provides funding and support to Texas entrepreneurs across a broad spectrum of industries. Jamie, along with a group of local investors and community leaders, were among the early adopters who believed that early-stage investing could provide a meaningful return for investors while also spurring local economic growth and so CTAN was formed as a not-for-profit corporation. Like most angel groups CTAN began with individual members of the organization volunteering their time and expertise to review potential investments, assist entrepreneurs and take care of administrative duties.

Jamie has also organized angel groups around the state of Texas into the Alliance of Texas Angel Networks, which represents over 300 investors and investment in over 60 companies in 2012. He is vice chair of the board of directors of the Angel Capital Association, a national organization spun out of the Kauffman Foundation representing seed stage investors.

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Meet the trio in person, along with a host of angels from New Zealand’s angel investment community and the world at the Asian Business Angels Forum, Queenstown, October 14-15. Seats are now very limited. Be quick to register yours. ABAF2015, NZ

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#ABAF15NZ Speakers – Carolynn and Jon Levy

Meet the speakers #ABAF15NZ – Carolynn and Jon Levy

Hosted by the Angel Association of New Zealand, the 2015 Asian Business Angel Forum brings together leading investors and early stage business specialists from around the globe to share their knowledge make their New Zealand connection.

They join a carefully curated audience of investor members of Angel groups, network and fund members from across this dynamic country bought together by the AANZ to celebrate this small country’s big contribution to early stage investment and build international relationships.

Among the highly experienced line up of speakers AANZ is extremely pleased to be able to bring Carolynn and Jon Levy from Y Combinator, one of the most successful incubators in the US to ABAF to share their insights and experience at #ABAFNZ15.

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Carolynn Levy is a partner at Y Combinator (YC). She was previously at renowned West Coast US firm Wilson Sonsini Goodrich and Rosati, where she helped hundreds of startups with legal questions and acted as Y Combinators counsel for 6 years. She has a BA in political science from UCLA and JD from the USF School of Law, and is a member of the State Bar of California.

Jon Levy, is also a partner at Y Combinator and previously counselled public and private technology companies as an attorney for Wilson Sonsini Goodrich and Rosati. He ran ThinkEquity’s private placement department and worked as a Managing Director at Merriman Curhan & Ford. Jon earned a J.D. from the University of Michigan Law School, and a B.A. in English Literature and Religious Studies from Wesleyan University.

Both Carolynn and Jon are skilled and experienced in dealing with entrepreneurs at all stages of the lifecycle, offering services to those beginning their ventures, those exiting and experiencing the process of merger or acquisition and those that recycle their capital investing in the new. They make themselves available for office hours at YC and Carolynn is active in entrepreneur education via Stanford University providing insights to founders Finance and Legal Mechanics for Startups helping them to get the structure right at the start.

Joining YC was a natural move for the couple, Carolynn says “YC was becoming bi-coastal and needed legal help on the west coast.  So for years, as an associate at WSGR, I helped YC’s portfolio companies with formations, fund raising, etc.  YC kept getting bigger, and my husband Jon joined YC as a legal consultant.  Jon was (is) so happy working with YC because of the people and the culture.  So eventually, since YC kept getting bigger, I decided to leave WSGR and come to YC as a full time partner.  It was a great decision.”

She councils startups with pragmatic guidance, for instance “It doesn’t matter who thought of the idea, who did the coding, who built the prototype, or which one has an MBA. It will feel better to the whole team if the allocation is equal because the whole team is necessary for execution. The take away on this point: in the top YC companies, which we call those with the highest valuations, there are zero instances where the founders have a significantly disproportionate equity split.

Y Combinator itself has an impressive track record, so in their time as independent and in-house council Carolyn and Jon have been involved in some of the biggest deals and best known companies in technology today, including: Airbnb (valued at approx $10B), Dropbox (valued at approx $10B), Stripe (over $1B and growing), Twitch, Heroku and Reddit. Twitch (formerly known as Justin TV) was acquired by Amazon for $970M, Heroku was acquired by Salesforce for $212M.

As detailed by investors following YC’s progress tens of other YC companies have been acquired, those “based on reports had a price greater than $10M were Parse (Facebook, $85M), SocialCam(Autodesk, $60M), Xobni (Yahoo, $48M), Cloudkick (Rackspace, ~$50M),Loopt (GreenDot, $43M), Wufoo (SurveyMonkey, $35M), Omnisio(Google, ~$15M), 280 North (Motorola Mobility, $20M), and Appjet(Google). Parakey‘s acquisition by Facebook likely involved Facebook stock which is now worth a greater amount also. Others that were smaller but non trivial and were likely deemed successes by the founders were Auctomaticand Zenter.

Meet Carolynn and Jon Levy, along with a host of angels from New Zealand’s angel investment community and the world at the Asian Business Angels Forum, Queenstown, October 14-15. Seats are now very limited. Be quick to register yours. ABAF2015, NZ

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Small Business: Eyes on the US

In this insightful article, angel-backed Fuel50 talk about the really nitty gritty aspects of entering the US market and have some lovely accolades for angel investment.

Small Business: Eyes on the US – Business – NZ Herald News
In October last year the folks behind Kiwi company Fuel50 won big in Las Vegas – but the source of their winnings wasn’t the roulette or blackjack tables.

Instead the company’s offering was awarded as one of the best new human resources technologies at the HR Technology Conference, which is held annually at the desert resort mecca.

Fuel50 creates career path software, typically aimed at companies with a high concentration of knowledge workers and with 1000 or more employees, and its CEO Anne Fulton says the win opened the door to coverage in the Wall St Journal and other US publications.

It all helps when you’re a tiny Kiwi company targeting major US-based customers in a competitive landscape that includes the likes of technology giants Oracle and SAP.

“In the US there are 11,000 companies in our target market versus 100 in New Zealand and 444 in Australia.

So there’s no question that’s the market we want to be in,” says Fulton.

“We’re trying to build a really big business brand, so our marketing has been critical to us acting like a bigger company. We talk about being David and Goliath; we’re a micro business down here in New Zealand, but we market like we’re a large enterprise.”

Like Fulton, many New Zealand small business owners making inroads into the US cite the scale of opportunity as a reason for their focus on the market, but the sheer size of the US also means small Kiwi companies need to direct their efforts carefully.

“We’re such generalists and in the US you really need to narrow your focus, and even as you keep narrowing it you find you’re still dealing with opportunities far greater than you could ever get here,” says Ben Ridler, CEO of business management software firm Results.com, which has a San Francisco office with around a dozen staff.

Ridler says hiring Americans is helping mould the company’s thinking.

Ben Ridler, CEO of Results.com.

“I think they’re the most advanced society when it comes to sales and marketing. Both our head of US sales and our head of marketing are American, so they’ve knocked the Kiwi thinking out of us a bit. But I think Kiwis have a lot to offer too. We’re very good at delivering a product or service to a client need and we innovate really well, so I think between us it’s a really nice mix.”

Hiring locally has also been important for Spotlight Reporting, a software as a service (SaaS) company that produces business intelligence add-ons to online accounting software platforms Xero and QuickBooks Online.

The firm has one US-based staff member – sales director Leslie Riggs, a Californian – who Spotlight’s CEO Richard Francis says “already has great knowledge of different ecosystems in the US”.

But it’s still crucial for Kiwi company leaders to regularly get on a plane to the US, he says, and that all efforts in the market are adequately resourced.

“The main thing that’s distinguishing the companies who make it in the US and the ones who aren’t is investment,” says Francis. “If you’re going to go there, you’ve got to do it seriously, and for investors, particularly in the SaaS world, you have to have a US market play.”

Q&A: Anne Fulton, Fuel50

Anne Fulton is the CEO of Fuel50 / Career Engagement Group, which creates career path software and has offices in Auckland and New York.

When did Fuel50 first start engaging with the US market?

We took on our first angel investment at the end of December 2013, started looking at establishing our US operation in January 2014 and had appointed and trained staff by April that year. So we’ve been going for about 15 months in the US. We’ve learnt a lot.

Why is the US market such a focus for the company?

The US market for HR tech is the most sophisticated in the world; it’s valued at $14 billion a year and it’s still growing. We work with enterprise clients who have a high concentration of knowledge workers and typically with 1000 or more employees – so banking, finance, health care, higher education, technology companies. In the US there are 11,000 companies in our target market versus 100 in New Zealand and 444 in Australia. So there’s no question that’s the market we want to be in.

The US really leads the way when it comes to thinking around HR technology. The companies are so sophisticated and they use multiple HR technologies to support their people strategies, plus the HR technology landscape up there is super exciting. Our product fits a niche in the market – currently there’s very little dedicated technology to support career pathing – so that’s our opportunity, to become the leading career pathing technology in the US and globally.

What’s the current state of your business in the US, and some of your goals for growth there?

We have a goal to have 100 US clients by the end of next year; we have five now, but that includes some big names and some Fortune 100 companies and 100 best places to work in the US. At the moment everything is trending in the right direction. Last year we doubled our recurring revenue, and we’ve doubled that again in the past six months.

What do you think has helped you get your foot in the door of that market?

We’re trying to build a really big business brand, so our marketing has been critical to us acting like a bigger company. We talk about being David and Goliath; we’re a micro business down here in New Zealand, but we market like we’re a large enterprise. In our competitive landscape we’ve got Oracle and SAP, so we’re playing into that space and we look carefully at their marketing and try to emulate or do better than anything they’re doing, particularly in the career pathing research and thought leadership space.

Underpinning our marketing is a foundation of research. We’re aiming to be thought leaders and providing research and insight into what best practice ‘career enablement’ looks like. We’re regularly invited on to the conference speaking circuit, particularly in the employee engagement industry. We were fortunate enough to also get noticed by picking up the award for being one of the best new technologies at the HR Technology Conference in Las Vegas last year, and that opened us up to coverage in the Wall St Journal and other publications, which all helps credibility.

The other thing is engaging with the HR community in the US, so really having quality conversations and building strong relationships with our prospects. We work really hard on what we call our ‘Fuellie’ culture – to be fast, fun and fantastic as a team – so everyone has fun together but they also have aspirational performance objectives. Our US team have some big goals, but they’re incredibly high performing.

How about things that haven’t worked as well? What have been some of your major learnings so far in the US?

Because we’re about the people proposition we really have to live our business values. What’s been interesting in the US is people are more prepared to come and go quickly, so you’ve got to be really focused on engaging them, keeping them motivated and have a good pipeline of talent.

How have you grown that pipeline?

The same way we’ve found our clients – through contacts, relationships and attending events within the HR industry. Having a strong board has also helped us attract great talent and the angel investment community behind us has been outstanding. We wouldn’t be doing what we’re doing, or have achieved what we’ve been achieving without their backing. Being able to tap into people like the ex-chair of Xero, Sam Knowles – who’s one of our investors – has been incredible.

As first published NZHerald 22 June 2015

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Creating our own Silicon Valley

There are so many components in successfully scaling great tech ventures. NZVIF’s Franceska Banga identifies a number of them in this article where she compares Silicon Valley with NZ. Essentially we all have a role to play!

Silicon Valley. Rightly or wrongly it’s the totem pole by which countries judge their transition to a more technology-based economy. But while many want to create the next Silicon Valley, replicating its confluence of factors is not easily done.

There are some features which helped create and continue to make Silicon Valley unique. It helps, for a start, having nearby two top universities – Stanford and Berkeley – with Stanford’s famed electrical engineering department especially important. So, too, does having huge pools of investment capital nearby.

But what might surprise many about this bastion of private enterprise is that it grew out of a long-term partnership with private enterprise supported by decades of US Government contracts and subsidies.

Its 60-plus years of growth has seen three technological waves.

Post World War II, federal Government money to develop new defence and aeronautical technology established the valley’s foundation and the first wave.

Darpa (Defence Advanced Research Projects Agency), created in 1958, is credited with playing a significant role in the development of the earliest version of the internet.

From that base came the second superconductor and PC wave of the 1970s and ’80s, followed by the internet, social and mobile media technological wave since the mid- 1990s.

The venture capital funds, which today underpin so much valley innovation, also enjoyed decades of Government support.

The Small Business Investment Act of 1958 established federal funding for US venture capital firms. In its first decade, the programme invested US$3 billion into young firms – over three times the amount invested by private venture capital funds.

The programme still exists and in 2013 it provided US$2.2 billion of funding investment. Many of the valley’s most dynamic tech companies – Apple, Compaq and Intel – have been backed by Government funds.

While our tech sector shouldn’t try to mimic Palo Alto – our market is very different – there are many reasons to believe we can build a credible and sustainable tech sector that is economically significant over the long-term. Over the past 15 years there has been significant progress in building New Zealand’s technology landscape.

The annual TIN100 survey shows that over the past eight years, revenues from New Zealand’s top 100 technology companies have jumped from $4.7 billion in 2006 to $7.6 billion in 2014.

While NZ has some catching up to do if we want to create a technology sector of significant economic scale, we are well on the way.

The TIN100 result backs up what we are seeing daily in the business news pages, with a stream of new technology companies becoming household names – alongside Fisher & Paykel Healthcare, Datacom and Trade Me are the likes of Xero, Orion Health, Wynyard Group, Rakon and Pacific Edge.

The innovation pipeline of the next generation of technology companies also looks very healthy.

New Zealand’s tech sector is being built through the application of innovation and technology across multiple sectors led by the software industry. There are many other sectors where unique technology solutions are being developed.

Healthcare integration, helicopters, paint, parking, apples, animal health, surgical dressings and cystic fibrosis are examples where local innovation is leading the world.

There is no single factor driving this innovation. The role of successful private sector leaders and entrepreneurs is crucial. But so, too, is the support from the Government, from establishing Callaghan Innovation, developing business incubators, encouraging more R&D, commercialising more university research and strengthening our capital markets.

We know it takes a long time to develop a sustainable venture capital sector – the Valley’s VC sector took 40 years to develop. And while our VC market is likely to remain boutique, servicing local start-ups as they grow, their role is critical in filling the $2 million-$10 million funding gap – beyond crowdfunding and angel investors, before traditional capital markets.

We may never rival the US but we need to ensure our VC sector reaches a critical mass to meet the needs of New Zealand’s growing tech sector.

Since its establishment as a Government-owned and funded company, NZVIF has partnered with 10 venture capital funds. Alongside its fund partners, NZVIF has invested into some of New Zealand’s most promising growth companies – including Orion Health, Xero and PowerbyProxi.

For every dollar invested by the Government through NZVIF, there must be at least 1:1 matching investment from private investors. The public/private sector investment leverage runs significantly above that. To date, a total of $1.1 billion has been raised for NZVIF VC-funded companies of which NZVIF’s contribution is $100 million.

Overall the VC fund has returned 5.6 per cent per annum. Post-GFC, VC fund investments are showing returns of 26 per cent per annum.

New Zealand has made significant progress over the past two decades and the results can be seen in the array of emerging technology companies with good growth prospects. If every year we have two to three VC funds investing across 10 companies in the $2 million-$10 million funding gap, the impact could be significant.

Building a vibrant early stage investment ecosystem is not an insignificant goal. Look at the countries which have succeeded – the US, Israel, Finland and Singapore. In all, government support behind private sector endeavour has been instrumental.

Franceska Banga is chief executive of the NZ Venture Investment Fund

First published NZHerald 26 March 2015

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‘Chunk of capital’ puts Rocket Lab on launch countdown

Congratulations to the team at Rocket Lab on raising their latest round of funding. Andrew spoke compellingly at the Angel Summit last year about the ability to build global companies from NZ and this is another proof point.

Rocket Lab has attracted new financial backing from one of the United States’ oldest venture capital firms and aerospace giant Lockheed Martin to put it on course to launch its latest vehicle into orbit this year.

The Auckland-based company aims to send satellites into space for a fraction of the price of bigger existing ventures. Founder and sole director Peter Beck said the latest financing round would allow the company to test launch its Electron rocket this year and a commercial launch next year. Existing backers have also committed further towards the firm.

“The size of the investment is commercially sensitive [but] you can see by the size of these projects these are not trivial amounts of money. This is a significant chunk of capital that will hopefully bring us into commercial operations in 2016.”

The company said it would soon announce its New Zealand launch site.
The 18m tall carbon composite Electron could be launched from a site the size of a rugby field. The site required a northeasterly aspect and had to be clear of populated areas.

The firm aims to transport small satellites into space for less than $6 million, compared with more than $160 million for an average launch overseas using rockets 60m tall.

The lead-time for businesses to launch a satellite would be reduced from years to weeks.

Beck said Lockheed Martin has had a relationship with his firm for the past five years but the strategic equity funding was the first financial investment it had made.

While the Maryland-headquartered firm is among America’s military giants, Electron rockets had no weapons capability because they couldn’t carry sufficient mass and flew on the wrong trajectory.

Lockheed has been involved in the US space programme since its inception and launched satellites using Atlas rockets. Last year it earned more than $10 billion from the services and “strategic missiles lines of business”.

Venture capital firm Bessemer Venture Partners is more than a century old and has provided seed funding for companies ranging from International Paper, retailer Staples to high-tech firms Skype, and LinkedIn.

David Cowan, a BVP partner, has joined Rocket Lab’s board as part of BVP’s funding.

The Electron rocket would revolutionise aerospace, Cowan said.

Existing backers, Silicon Valley’s Khosla Ventures and Sir Stephen Tindall’s K1W1 investment fund participated fully in the latest funding round, Beck said.

The eight-year-old company has developed and launched a number of rockets and received up to $25 million of government funding over five years.

He said Rocket Lab was able to raise funds from venture capital firms very quickly which was important as there was growing competition in the small rocket market.

“The market opportunity for small satellites is massive at the moment and we see a number of competitors in the US. Their biggest issue is trying to get funding.”

Lockheed Martin chief scientist Ned Allen said his company invested in technology to help keep up with innovation across the industry.

“Rocket Lab’s work could have application in a number of aerospace domains, and we look forward to working with them to complement our overall efforts in small lift capabilities and hypersonic flight technologies.”

Rocket Lab expects to unveil further details about the Electron at the Space Symposium in Colorado Springs next month.

First published on nzherald.co.nz 3rd March 2015

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Web design aid catapults students from Dunedin to Silicon Valley

George Phillips and Mike Neumegen were a couple of Dunedin uni students when their part-time work as freelance web designers led them to hit on a business idea.

Less than two years later that idea has taken them to Silicon Valley, garnered them customers in Europe and the US and been backed by big-name Kiwi investors like Trade Me founder Sam Morgan.

It’s been a wild ride for the pair behind Cloud Cannon, a software company whose solution is aimed at making life simpler for web designers by automating some of their backend work.

“I still have moments where I’ll sit back and listen to one of my team talking about why we should be doing something, and how it fits with the company’s philosophies, and I’m like, ‘Holy crap, this isn’t two guys just making something in their bedroom anymore’,” Neumegen says.

Phillips and Neumegen were computer science students at Otago University and freelancing for local companies in their spare time when they first hit the pain point their company Cloud Cannon aims to soothe.
As designers their brief was to come up with a web design for clients, get sign-off on it, then create the site itself. At that point clients were thinking the job was done, but in reality the designers then had to spend hours on back-end coding and other work that would then allow the client to edit the site themselves.

The pair began spending their evenings working on a solution. Their initial project looked at solving the core issue, but also aimed to address a whole host of web designers’ needs. But the solution ended up being bloated and unusable, says Neumegen.

They scrapped all their code and started over.

The pair launched a pared-back and far more defined solution. After a handful of people started using it, they got a lucky break, featuring in tech industry blog TechCrunch.

“Startup entrepreneurs would chew their own arm off to get on TechCrunch and we just randomly happened to get covered by it,” Neumegen says. “Out of that we got a lot of traction, and a few months later we put in a business model, started charging and found people were willing to pay for it.” Early last year, Cloud Cannon was among the companies accepted into the Lightning Lab digital accelerator in Wellington. While there the pair met John Holt, managing director of the Kiwi Landing Pad – the government-funded base for Kiwi tech companies in the US. Holt sensed their potential and organised funding through New Zealand Trade and Enterprise to put Neumegen on a plane to Silicon Valley to fast-track networking.

Neumegen returned to New Zealand in time to prepare for Demo Day – the penultimate event in each Lightning Lab intake where companies pitch for investment. Cloud Cannon ended up gaining $650,000 from 16 investors including Sam Morgan, Datacom deputy chairman Simon Holdsworth and early stage investment company Movac’s managing partner Phil McCaw.

Among the investors was Laura Reitel, the former manager of the more well-known TechStars digital accelerator in Boulder Colorado, who later mentored Neumegen and Phillips at Lightning Lab.

“The funny thing is I’ve never made an investment before,” Reitel says. “But I found myself thinking, ‘If I’m ever going to bet on any team it’s a team like theirs’. I’ve seen a lot of investment activity and I’ve seen a lot of teams, and you always bet on people who you know you can work with and who really pour their heart and soul and energy into a venture.” Reitel says the ever-increasing number of websites being created annually means Cloud Cannon is in a fast-growing market.

“And there’s real demand for tools that help make websites more beautiful and easy and intuitive to use.” The investment has allowed the company to grow to a team of four and for Neumegen to spend six months in the company’s primary markets of Europe and the US.

Growing the number of freelance web designers using its software has been the main focus of the company in recent months. Connecting with those prospects has been made easier because web designers tend to be well-connected and vocal in online communities, Neumegen says.

Another opportunity the company is now pursuing is the enterprise market, and they’re currently talking to some large organisations about how they might use Cloud Cannon’s solution.

“Enterprises have a lot of websites they’re managing and they need non-technical teams to be able to update those websites. That’s not something we had really thought of, but once we started looking at it we realised we could solve some big problems for some very big companies,” Neumegen says. “And that’s a great feeling.”

First published on nzherald.co.nz 22 January 2015

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