Angel investment in two firms backs new particle analysis technology

The technology aims to make it easier and quicker to test and treat animals in the field. Photo / Tania Webb

Greg Mirams’ initial foray into the investment world didn’t go so well. The founder of animal parasite diagnostics company Techion Group was no stranger to capital raising, having set up, sold and bought back Techion. But when he tried to get investment for a new technology that could transform his business he was left out in the cold despite an intensive six-month courtship.

“It was crushing,” he says.

Mirams was seeking $300,000 for Menixis, a start-up company he co-founded with nano-scientist and director of Otago University’s applied science programme Stephen Sowerby.

Menixis holds the intellectual property to a new particle analysis technology developed over more than two years by Sowerby and Mirams. It could transform particle analysis in the field, replacing the need for microscopes or the skills to use microscopes to accurately identify and count particles, such as the number and type of parasitic eggs in a sample of animal faecal matter.

Mirams developed the technology to update Techion’s internationally popular parasitic diagnostic tool Fecpak to make it easier and quicker for farmers to test and treat their animals in the field.

It will also bolster Techion’s revenue by increasing its own monitoring and advisory capacities.

To Mirams the whole deal was a no-brainer. Why wouldn’t you invest in a new technology that already had a customer not only willing but keen to sell it to its significant local and international customer base, built up over more than 20 years?

Fortunately Mirams had been introduced to angel investor Bill Murphy, who decided to champion Mirams’ cause in his Bay of Plenty Enterprise Angel group.

“I just passionately believed we shouldn’t let this opportunity to invest in some significant new primary industry technology pass us by,” says Murphy.

Mirams pitched again, but was thrown when told the Angels liked the product, but wanted to roll Menixis’ technology into Techion and then invest in Techion. “We wanted to secure the connect between the IP and the market,” explains Murphy.

But that didn’t work for Mirams.

He argued that first, Techion had multiple business activities, complex operations and an established shareholder structure; second, Menixis co-founders Sowerby and Otago Innovation would end up with a relatively small shareholding in Techion, which wouldn’t give them as much incentive to continue to develop the technology; and third, the technology itself had far more potential than just animal parasitology (Techion’s focus).

“There are potential applications for this technology in the area of microscopic analysis of any small particle including algal blooms, pollen analysis and in the petrochemical and forensic evidence industries, none of which I know anything about, so Techion just isn’t the right vehicle for that. There’s also this massive opportunity for improving the speed of human parasite diagnostics.”

Murphy and his 13 co-investors at Enterprise Angels agreed and a novel deal was struck to invest in both Menixis and Techion to give Mirams the capital he needed to turn the technology into a commercially saleable product.

Mirams and Murphy say this deal could have implications for investors and companies. Both get the security of investing in growing existing revenue streams, plus the upside of investing in new and potentially even bigger revenue streams.

“My hope is this deal becomes a kind of blueprint for a new New Zealand growth model,” says Mirams.

Produced in conjunction with Angel Association of New Zealand

First published in the New Zealand Thursday November 21 2013

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Firm uses cell network, cloud for surveillance work

Imagine you’re charged with managing a number of rural properties from a distance. Private landfill sites or parks and forestry land, for example. How would you protect against fly-tippers (illegal dumping), vandals or arsonists?

Video surveillance is expensive and technically difficult, especially when your locations are far from your base. Transferring your surveillance footage from one place to another needs a high-capacity broadband connection, which isn’t available in many remote locations.

Husband and wife entrepreneurs Helen and Scott Wattie founded their business Mi5 Security with business partner and director Nick Mooyman and decided to target this untapped potential market.

“Technology’s solving a problem where once only a human response was possible,” Helen says.

Mi5 uses the cellular network and its proprietary cloud computing platform, iDefigo, to keep tabs on remote locations.

This simplifies surveillance and monitoring of remote environments, even where power and Wi-Fi aren’t readily available.

Surveillance footage can be transferred using only modest amounts of bandwidth.

The business is based on four interwoven revenue streams – video surveillance as a service subscription via the cloud, mobile data services, platform licensing fees and hardware sales.

But the Watties soon realised having a product on the market and their business processes and structures in place weren’t enough if they wanted to develop the business quickly. They approached angel investor and entrepreneur Scott Gilmour for advice on raising capital to fuel their expansion plans.

They’d first met Gilmour through the Software Association. Initially, it was not their intention for him to invest in the business – they simply wanted his advice on where to look for investment, says Helen.

“Scott quickly introduced us to the possibility of gaining angel investment at a critical growth stage of our business.”

Gilmour, meanwhile, was an established angel investor, having worked at Intel for more than 12 years and was founder of the “I have a Dream” charitable trust in ths country.

Mi5 security was an interesting-sounding investment opportunity, he says, but he was initially more attracted by the founders’ commitment to the company.

“I got to know them and the company and I just thought they were good people, which is my prime requirement for getting involved.”

Gilmour is a founding member of the Ice Angels, the largest group of angel investors with more than 100 members. With a decade of Ice Angels experience, as well as seven years on the advisory board of Trade and Enterprise’s Beachheads Initiative (which connects companies to a network of private sector advisers), Gilmour says between 30 and 40 companies present their business plans to him every year, but few grab his attention like Mi5 did.

Gilmour became chairman of Mi5 Security in July last year and has since raised more than $1 million in two finance rounds, helping pave the way for the company’s expansion into Britain.

From their earliest discussions Gilmour understood Mi5’s proposition, Helen says, and having such a good and committed chairman has been instrumental in helping the company to grow quickly.

“Without Scott as the communication gateway between ourselves and our investors, we’d find ourselves crippled by paperwork and frustrated by the time spent educating people on our business and justifying our decisions.”

Like many high-tech start-ups Mi5 isn’t profitable yet as it’s reinvesting for growth, but it already has many customers here and in Australia and channel partners, as well as a growing UK and mainland European presence.

But it faces the same challenges all Kiwi tech companies do, says Gilmour: access to capital, management capabilities and distance from market. So the Watties are now based in London.

Produced in conjunction with the Angel Association of New Zealand.

First published in New Zealand Herald on Thursday November 7 2013

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Angels found, angels wanted

First published in the New Zealand Herald Friday October 11, 2013

Antony Dixon is bubbling with excitement. The chief executive of electronics-technology company Times-7 has just returned from Hong Kong, where the firm was named in the prestigious Red Herring Top 100 Asia awards.

The awards celebrate emerging technology companies from the Asia-Pacific region, so it was a big deal for a small company from New Zealand, says Dixon.

Even bigger, however, was what happened between the pitches and the handshakes. Dixon used the awards as an opportunity to visit his Asian contacts; confirming two new distributors in Hong Kong and Singapore and netting a new client in Japan in the process. “It was all really worthwhile, we got international recognition for our technology and we signed up a couple of new partners,” says an obviously delighted Dixon.

All this is a far cry from a year ago.

Times-7’s business is supplying equipment for the radio-frequency identification (RFID) or “smart tag” market.

Back then Dixon had been knocking on doors for almost a year trying to raise enough capital to develop and market the company’s new robust, slim-line antennas. His invitation to pitch at the 2012 Angel Summit – the annual gathering of the country’s angel investors (individuals who have a bit of spare cash to invest in tomorrow’s Kiwi companies) – was his last attempt to raise the $600,000 he badly needed.

“Before the summit we still didn’t have enough money on the table to make the [investment] round worthwhile. So we had to really put our best foot forward – which we did.”

Times-7 was one of 13 budding Kiwi companies asked to pitch at last year’s summit and one of six profiled by The Business last November.

It was one of the successful ones. Others were equally or even more successful; a couple, far less so. One is still trying to close the capital raising round it embarked on more than 18 months ago, making the Summit showcase a small part of what is now a long and arduous journey.

Even those who were successful, however, still have capital raising firmly on their agendas. That’s a fact of life for early-stage companies that doesn’t surprise Angel Association chairman and investor Ray Thomson.

“One of the problems with early-stage companies in New Zealand is they tend to run on the smell of an oily rag,” he says. “They don’t have enough capital to get themselves to market fast enough. It’s one of the major problems we have around commercialising Kiwi technology.”

Thomson says he encourages companies to raise as much as they can, whenever they can. Too many raise too little, slowing their potential progress and leaving them at risk of being overtaken by competitors or new developments.

Finding enough capital, however, is a problem Thomson shares with the companies. A key function of the association and its annual Summit is to encourage new angels to join the ranks and share their money, and the risks, with other angels in order to grow the total pool of money available to early-stage companies.

“That’s why we have the Summit in a different part of the country each year, to encourage more local interest.”

Last year’s Summit in Wellington, co-hosted by the local angel group Angel HQ, helped swell the capital’s angel numbers by 50 per cent, from 31 to 45. The association’s push to grow numbers also seems to be working across the country, with the official number of angels now at 420 compared with 368 this time last year.

Thomson and his association colleagues are beavering away on other initiatives in an effort to continue the momentum. A women-only angel group called Arc Angels is being launched this month in Auckland and Wellington. The group is the brainchild of Kiwi expat and staunch early-stage company supporter Bridget Liddell, now a senior partner with US investment company 212° Equity. Liddell is earmarked as chairwoman of the new group, and communications consultant Alex Mercer has been signed up as executive director.

Women-only angel investment groups are very successful in the US, says Thomson, especially at finding capital for businesses led by female entrepreneurs.

Golden Seeds, which started as a women-only group focusing primarily on women-run businesses, is now one of the largest and most active angel investment organisations in the States, investing US$58 million in 58 companies since 2005.

Thomson’s aim is to increase New Zealand angel numbers to more than 550 next year and he expects the Arc Angels to provide a significant chunk of that target.

There’s also a push to develop dedicated angel groups in some of the smaller centres, including Whangarei, Hamilton, Oamaru and Invercargill.

The latest Young Company Finance Index, produced by the Government’s NZ Venture Investment Fund, shows that angel investment increased 18 per cent to $36.5 million in the year to June, compared to $30.9 million in the year to June 2012. Cumulatively, $274 million has been invested in early-stage companies by angel investors since data was first recorded in 2006.

But Thomson says the numbers don’t reflect the true health of New Zealand’s angel sector, which is second only to the States, based on the number of angels per head of population.

“Twenty-three New Zealand angels went to the US Angel Summit this year. We were the largest country represented outside America, so there’s a huge amount of interest [in angel investing] here.”

This passion for angel investing is a large part of the reason why New Zealand can attract big international names to its Summit, says Thomson. “[International] angels like coming down here because this is one of the most vibrant angel communities in the world.”

This year the Summit’s line-up includes Canadian technology entrepreneur turned angel guru Basil Peters, a regular speaker on the US angel circuit and a strong advocate of early exits for angel investors. He is speaking for the first time outside North America, says Thomson. Others on the list include well known US angel and Kiwiphile Bill Payne; Singapore-based British angel investor Hugh Mason, who runs the emerging company accelerator JFDI Asia; and Stuart Fox, principal of one of Australia’s larger angel funds.

Driving best practice and angel numbers goes hand in hand, says Thomson. “It’s all about supporting the ecosystem. It’s no use the Government helping to build these little companies, and get the intellectual property out of our research organisations, if there’s no capital around to help them reach their targets.”

So how did our pick of companies from last year’s summit showcase go?

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If you would like to find out more about the 2014 Summit, please see AANZ Summit 2014.

Rehab firm needs more to take the next step

Elliott Kernohan, chief executive of rehabilitation technology company IM-Able, embarked on a $1.25 million capital raising round at the 2012 Angel Association of New Zealand Summit in Wellington.

Before the summit he’d had $640,000 pledged from Cure Kids Ventures, which is interested in the company’s technology for children with cerebral palsy, so the end was in sight. But no end came.

The company managed to attract only another $200,000. Not enough to close the round, take the money and put it to work, says Kernohan. “we’ve moved away from the angel networks to focus on investors who have experience in the healthcare sector. So the conversations we’ve been having have been a lot more successful.”

Kernohan echoes Polybatics head Tracy Thompson when he says capital raising is difficult in New Zealand for budding healthcare companies. He also suspects IM-Able (pronounced “I’m able”) was a little too far down the track for angel investors, requiring perhaps a little too much money for their comfort. The trouble is, to take these projects any further requires capital, says Kernohan. The grand scheme to translate its technology to the web, to give clinicians the ability to develop large-scale rehabilitation programmes for stroke victims and others who suffer from neurological problems, is also on hold until the round closes.

First published in the New Zealand Herald on Friday October 11 2013

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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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BioLumic raises GD1 funding for offshore growth

Plant science company BioLumic has successfully completed a new investment round with backing from the Global from Day One programme (GD1). The investment will finance customer trials and a foray into international markets.

BioLumic is a Palmerston North company which is commercialising ultra violet light technology developed to improve crop growth within large scale horticultural systems. Its proprietary UV and ‘Smart Array’technology is able to control plant size, growth, stress tolerance and a range of consumer quality attributes in a way that has never beforebeen commercially achievable. “BioLumic is a very attractive investment proposition due to the significant potential of its technology to increase returns for high volume vegetable and algae growers internationally,” says GD1 chief executive Greg Sitters.

“The company is still at an early stage of developing technology that has massive worldwide applicability. The technology will revolutionise the way plants are grown. This kind of early stage investment in companies with immediate global potential is precisely the sort of opportunity which GD1 is very interested in backing.”

“BioLumic is fortunate to have the backing of a GD1 investment to follow our initial fundraising through the MIG Angels’ Fund 1 and the New Zealand Venture Investment Fund’s SCIF fund,” says Warren Bebb, BioLumic general manager.

“This latest investment enables us to conduct extra customer trials and engage more with potential international partners and markets. As a result of this funding, we will be in a strong position to have our first product in market by the end of 2014.”

The science behind BioLumic was developed by Dr Jason Wargent, an applied plant physiologist at Massey University. The company was founded in November 2012. Palmerston North-based BCC has to date managed the commercialisation process, and the company has also received a Callaghan Innovation Project Grant and a loan from the Central Energy Trust.

“The MIG Angels identified BioLumic as a company with high potential and invested in it through MIG Fund 1,” says Mike Creed, who represents MIG Fund 1 on the BioLumic board. “We are happy with the progress the company has made so far and absolutely welcome the investment by GD1. Increasing the cash on hand will give the company a bit more breathing space as it works towards its milestones.”

Bebb says BioLumic will soon begin customer trials at two sites in the North Island; the company will start small-scale customer trials later this month, and larger scale customer trials are scheduled to begin in November.

BioLumic has recently completed filing its PCT patent in New Zealand and, over the next year, says Bebb, the company will determine in which other countries to file. He expects the first commercial prototype to be available for testing by the end of 2013 and the second prototype, incorporating modifications of the first, is planned for trials in mid-2014. The company expects to be in production towards the end of 2014.

BioLumic (www.BioLumic.com)

BioLumic is a plant science company based on science developed at Massey University. Through manipulating exposure to doses of UV light, BioLumic’s IP has been shown to optimise plant growth for desired effects including yield, disease control, colour and flavour. Current applications of the technology are being developed that include treatments for transplant crop seedling quality; growth and quality regulation of fully indoor produced leafy vegetables and high-value salad herbs; and pathogenic disease treatments for a range of horticultural crops. The company is also investigating other applications of the technology such as manipulation of desired characteristics in the biological material for nutraceuticals, pharmaceuticals and algae.

Global from Day One (www.globaldayone.com)

GD1 is a seed investment fund which has up to $4.6 million available for investment – having raised $2.3 million from private investors and with access to matching co-investment from the New Zealand Venture Investment Fund. It aims to invest into around 25 start-up companies with international ambitions over the next four years. Nationally-focused early stage investor Sparkbox Ventures is managing the fund.

MIG Fund 1 (www.thebcc.co.nz/cms/page.php?view=mig)

Established in 2007, MIG Fund 1 targets potential investments at the seed and start-up phase of emerging businesses. Potential investments can be in any sector and come from across New Zealand, although MIG Angels are particularly interested in potential investments from the wider Manawatu region. With the fund nearly fully-subscribed, the MIG Angels are planning to launch MIG Fund 2 in 2014.

BCC (www.thebcc.co.nz)

Based in Palmerston North, BCC turns innovative ideas into thriving new businesses. It secures investment funding to grow technology businesses, offers management support and mentoring for start-ups, and facilitates the journey from concept to commercialization.

Media contact
Warren Bebb
General Manager
BioLumic Ltd.
DDI +64 6 352 0102 M +64 21 799 257
[email protected]

For GD1, contact David Lewis 021-976 119

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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Pigment firm’s founder impresses investor

First published in the New Zealand Herald on Thursday August 22, 2013

Angel investor and promoter Brent Ogilvie is tickled pink about his latest investment, colour company D’Arcy Polychrome.

The startup – which has come up with a way to encapsulate and deliver colour through dry pigments to colour paint, concrete and plaster – has a disruptive technology, solid IP position and large and multiple potential markets on its hands.

But ask Brent Ogilvie, angel investor and director of science and technology investment firm Pacific Channel, what attracted him to back the Auckland-based company and he’ll tell you first and foremost it was the person behind the venture, founder Rachel Lacy.

“She has an enormous amount of energy, as well as experience in the paint industry,” Ogilvie explains. “Her mother had a chain of upmarket paint stores in New Zealand and her father is an architect, so she literally grew up in that paint and decorative industry.

“So when she said she had identified a niche you’re more likely to believe that and it’s easier to get the data to validate that.”

Pacific Channel was also impressed by overwhelming expressions of interest in the technology from the paint and concrete industries.

The incumbent technology to tint paint involves dispersing a limited range of liquid colourants through a tinting wheel at your local paint shop. But changing the form in which colour comes – from liquid to dry – opens up a world of new possibilities, including the ability to buy colour separately from a base paint, to distribute it directly online, or develop whole unique colour palettes for high profile designers.

The company now has its first customer, Sto, a billion-euro turnover premium paint company, which is using D’Arcy’s “drikolor” system in Australasia.

The company closed a second round of investment in May, bringing in more than $500,000.

Pacific Channel focuses on companies in the clean-tech and material and life sciences sectors. The firm looks for proprietary technology, a substantial marketplace, and people with deep expertise and passion for their field who they can work with, says Ogilvie says.

As an angel Ogilvie says he tries to focus his efforts on what he can he execute at the micro level; helping to develop the D’Arcy Polychromes of our country, for example.

Produced in association with the Angel Association New Zealand.

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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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For more information on SmallWorlds click here

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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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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Aduro Biopolymers secures investment from Wallace Corporation

Hamilton-based Aduro Biopolymers, a natural resource materials and biopolymer company, today announced it has secured investment from Wallace Corporation, by volume New Zealand’s largest service rendering business, processing a variety of co-products from the meat processing industry. Aduro Biopolymers is a spin-out company formed by WaikatoLink Limited, the technology transfer office of the University of Waikato. The company was formed to develop and market materials and biopolymers for use in the manufacturing sector. The company is currently developing a novel material based on an unconventional idea; turning bloodmeal into bioplastic.

“Aduro Biopolymers has developed an innovative method for the production of bioplastics made from by-products of the red meat and poultry industries,” says Graham Shortland, CEO of Wallace Corporation. “We’re always looking for innovative ways to turn new and existing raw materials into higher value products in order to sustainably deliver superior returns to our meat processing partners.”

“We’ve been very impressed by the team at WaikatoLink and their track record in commercialisation as well as the quality of research from the University of Waikato. This investment is part of a broader strategy and the start of a partnership that will allow us to bring new research from the University into our business.”

Duncan Mackintosh, the Chief Executive of WaikatoLink says, “It’s fantastic to secure investment at such a key point in the company’s development. We’re also delighted to have Sir James Wallace join the Aduro board. Aduro Biopolymers is a great example of an early stage innovative company based on publically funded research. It’s encouraging to see a successful established company like Wallace Corporation value this innovation and its commercial promise as part of its strategy. This partnership will help the success of Aduro and open up new opportunities too.”

Aduro Polymers aim is to develop environmentally conscious materials for the manufacturing and construction sectors. The company’s first product is Novatein, a bioplastic that will be price competitive with petrochemical plastics. The global plastics market is worth over a trillion dollars and currently bioplastics represent 5-10% of that market, with a compounded annual growth rate of almost 20%.

Darren Harpur, Acting CEO of Aduro Biopolymers says, “The manufacturing process for Novatein is quite simple. This means the capital costs required to commence manufacture will be relatively low and should enable the cost effective production of Novatein. There is a growing demand for environmentally friendly plastics but they need to be at the right price point for consumers. We are confident we can achieve this price point with Novatein.”

The science behind Novatein originated and continues to be developed by the University of Waikato’s Dr Johan Verbeek and his team, where bloodmeal produced by the red meat industry is processed into granules which have been modified and optimised to suit a chosen product’s attributes. The granules can then be manufactured into injection moulded or extruded products using industry standard equipment. Novatein has been in development since 2007 and has received investment support from KiwiNet’s PreSeed Accelerator Fund from the Ministry of Science and Innovation.

Harpur says, “As consumers, we’re all aware of the effects of plastics on the environment. Novatein will help solve some of those problems by introducing a bioplastic made from naturally occurring materials that on their own quickly degrade in the environment. We think that this aspect combined with a simple manufacturing process will enable our technology to be adopted quite rapidly.”

University of Waikato Vice-Chancellor Professor Roy Crawford says the work done by Dr Verbeek and his team has garnered much interest as it has developed and it is pleasing to see the investment by Wallace Corporation. “At the University of Waikato we promote the delivery of world-changing and relevant research. In this case we have research that takes low value co-product of the red meat industry and creates a biodegradable plastic. I consider that highly relevant to our world and is an excellent example of research that is making a difference.”

Aduro Biopolymers is working with commercial partners in New Zealand and Australia to develop Novatein for a range of product lines. The company is also looking to work with New Zealand research organisations to develop new and novel materials from other natural resource polymers.

Further information:

Sandra Lukey
Shine Group (PR for WaikatoLink)
Mobile: +64 21 2262 858
Email: [email protected]

About Aduro Biopolymers

Aduro Biopolymers is a natural resource biopolymer company. Their lead product is Novatein, a biopolymer formulation using bloodmeal which is a co-product of the red meat industry. Aduro Biopolymers is a spin-out company formed by WaikatoLink Limited, the technology transfer office of the University of Waikato. For more on Novatein see www.novatein.co.nz

About Wallace Corporation

Wallace Corporation Limited was formed in 1994 to consolidate several unique businesses. One of those businesses had been operating a rendering plant, principally for dead cows, at Waitoa since the early 1930’s, and was purchased by Mr JD Wallace in 1939. The other businesses, established by James H Wallace, were Wallford Meats (NZ) Ltd, Eureka Hides & Skins Ltd and Wallace Industries Ltd. Recently Wallace Meats was acquired by Silver Fern farms. Today Wallace Corporation employs up to 150 staff. The Company is a significant exporter with over 80 percent of sales being to the Europe, Australia, China and Southern Asia. Wallace Corporation has a commitment to building an industry based on the future rather than on the past. www.wallace.co.nz

About WaikatoLink

WaikatoLink Limited is a world class technology development and investment company, with a strong track record in translating research outcomes into commercial applications and technologies. As a wholly-owned subsidiary of the University of Waikato, it achieves this by identifying, managing and commercialising the University’s intellectual property. WaikatoLink works closely with industry, investors and researchers to identify and develop market opportunities for new technologies, and plays a key role in University knowledge transfer for economic transformation. Since its establishment in 2002, WaikatoLink has completed numerous licensing deals and established more than 12 start-up companies and joint ventures, which have collectively created more than 138 full-time equivalent jobs and achieved market capitalisation nearing NZ$200 million. Three of its start-ups have already been successfully exited. www.waikatolink.co.nz

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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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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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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