New Zealand startup companies to watch in 2021
The New Year holds new opportunities for these five local technology startups, each of which is poised major growth in 2021.
Lockdown pain – or at least beverages glugged to numb it – has been Winely’s gain.
The startup, founded by Abbe Hyde and Jacob Manning in Dunedin two years ago, makes a wireless sensor that checks the quality of wine during its primary fermentation. It feeds data via the Internet of Things and the cloud to Winely’s app.
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“Demand for our technology has exploded this year,” Manning says.
Brits and Yanks in lockdown are chugging through more New Zealand wine than ever before (exports were up 10 per cent by value in the eight months to August), and Winely’s “smart wine” technology helps vineyards product better product, and cutout repetitive tasks.
Winely completed its first field trials in Central Otago in 2019, before expanding to other major wine regions in New Zealand, Australia, and California.
Winely’s founders bill their technology as a world-first. Manning said the idea for the startup emerged from “Academic research on wine phenolics” (he has an MSc in plant biotechnology, Hyde a master’s degree in management.)
“We save our customers six-10 hours a day for every 50 tanks they have, by removing the need to manually retrieve and run lab samples in the primary fermentation,” Manning says.
It’s slow, laborious and even dangerous.
Winely, by contrast, “Provides consistently accurate data, enabling the winemaker to make quick and easy decisions on interventions and additions.”
The startup just raised $2m in seed money, which will be used to “substantially increase manufacturing capacity to match demand”; further expansion into Australia and the US, and to keep adding to a staff that’s already doubled to a dozen over the past year.”
Manning and Hyde have the outward appearance of a slacker-hipsters, but their goal is global. They say, “Winely is set to disrupt the $3.5 trillion fermentation market and is positioned to be the world leader in the Yeast 2.0 the emerging synthetic biology market.”
And they’ve gained some serious fans in tech and investment community. Backers of Winely’s $2m raise included two California-based VC funds, Uncork Capital and Quidnet Ventures, and investors from two of Australia’s hottest software companies, Canva and Atlassian, as well as more usual suspects NZGCP and Canterbury Angels.
“We don’t do sales or marketing. [It’s] not necessary and a waste of time,” says Manning.
He won’t give any financials but says Winely’s customers already supply 77 per cent of total wine volume in the US.
Product development is partly in-house, and partly via partnerships.
“Our team are all experts in their respective fields, and due to the complexity of the technology, we have headhunted most of the global experts as advisers to Winely,” Manning says.
A project is under way with the Australian Wine Research Institute, while Winely is assessing partnerships with the NZ Winegrowers-owned Bragato Research Institute in Marlborough and UC Davis (the University of California’s Davis campus), which Manning describes as the world’s best wine research university.
Are Manning and Hyde wine buffs themselves?
“Certainly, we are,” Manning says. “We often share our favourite wines from each region with our investors and advisor network – except they often mop up their inventory.
“Currently, we’re drinking a Māori Point Pinot Noir from Central Otago. Absolutely delicious. Matt Evans, the winemaker, was one of our early advisers.”
Evans was a natural fit.
The US expat traded a career as an investment banking analyst at the likes of Goldman Sachs and Morgan Stanley, then a product management role Silicon Valley’s Nvidia, for winemaking. At Māori Point (2016 Pinot Noir: $84) he mixes organic vintering with science-based fermentation.
This year could be something of a make-or-break year for gaming studio RocketWerkz.
The Herald has been chronicling its progress for a while, describing how founder Dean Hall spent two years in the army before heading to Europe where he worked as a game developer, before returning to NZ to found his own studio – with multi-million dollar backing from Chinese giant Tencent, which now has a 47 per cent stake).
October saw RocketWerkz move into the top two floors of the new PwC Tower at Auckland’s $1 billion Commercial Bay development, complete with a $5m fitout to make the new digs look like a spaceship (see video below).
Rocketwerkz has had a steady output of games over the past two years, but its main mission has always been to create an A-list, blockbuster-budget multi-player game – the kind of title that will have tens of millions around the world glued to their screens (in the manner of Path of Exile, made by West Auckland’s Grinding Gear Games – now majority-owned by the busy Tencent after a $100m-plus deal).
It now has a name: Icarus, and a release date, or at least timeframe, and the first images are starting to be shared online.
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“Icarus, it is a sci-fi survival game where players explore a hostile alien world either alone or co-operating with their friends,” Rocketwerkz chief operating officer Stephen Knightly says.
“Sixty-five people are working on the project, including alumni from Weta Digital, Grinding Gear Games and Electronic Arts,” the COO adds.
“It is being built using the latest version of Unreal Engine, the same software that runs Fortnite and powered the virtual sets pioneered by Disney’s The Mandalorian.
“The game will launch in the second half of 2021, but will then continue to expand with regular updates and new ‘seasons’ of content for several years after that.”
The best-case scenario, with the global gaming industry now bigger than movies: hundreds of millions roll-in.
The worst: Another Cyberpunk 2077.
Lockdowns always held potential for online education players, but for Auckland-based Kami, which was already enjoying a degree of global success, the numbers have been phenomenal.
Chairman and chief revenue officer Bob Drummond won’t give detailed financials, but the big picture is one of explosive, profitable growth.
“Our ARR [annual recurring revenue] grew 1000 per cent over the past 12 months,”Drummond says.
“We’re now in the $20m to $50m range.”
“We’re definitely not burning cash,” he says.
Staff numbers have been doubled to 45 (and counting) since January, with no outside money, and no raise is on the immediate horizon.
There are now some 22 million teachers and students using Kami’s app in 180 countries to create more than 100 million documents per month. If printed out, the stack of paper would be higher than the altitude of the International Space Station.
A basic version of Kami is free, but a teacher can pay $99 per year for a premium version that allows them, and their students, to integrate Kami with Google Classroom and other popular education apps, and get priority support.
Kami also does bespoke deals with local and regional education authorities.
“One customer alone, the Los Angeles Unified School District, has 735,000 students using Kami. That’s as many students as in all the schools in New Zealand,” Drummond says.
Like all good startups, Kami was created to solve a real-life problem.
Its eponymous product was developed when Hengjie Wang (today CEO), Alliv Samson (now COO), and Jordan Thoms (CTO) were studying engineering at Auckland University in the twenty-teens, and wanted a better solution for taking and sharing notes.
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Together they created, Kami, (the word means paper in Japanese): a tool for sharing PDF documents, and annotating them with notes. Over time, it’s grown to accommodate many types of file formats, or even snippets of websites.
The trio were joined by Drummond who, like them, was an Auckland varsity grad – only he hit campus in 1979. After a tech industry career at startups including Plexure (where he was COO for five years), Drummond had become a professional investor and director – and was well-placed to help with seed money.
While it’s easy to label Drummond as the designated adult, he says: “We’re a really disparate bunch. But don’t make any assumptions about who’s in charge. We reach agreement on all decisions. Each has different strengths and weakness.”
The reason for this year’s hyper-growth is obvious, but in the Kami chairman’s view, it’s accelerated a trend that will never be reversed.
“Covid has given a real kickstart to the digital transformation that’s finally, finally taken hold,” Drummond says.
And after being forced to adopt online tools during lockdowns, teachers who have been able to return to the classroom are keeping them on.
All of Kami’s sales are offshore. Most of its market was always offshore, but this year the startup decided to make the full version of its product free for all New Zealand schools.
In a way, NZ classrooms are among those in the least need of a leg-up, given the paucity of community transmission since the initial outbreak, and our more-or-less back-to-normal everyday lives.
But Drummond says, in a way, our education system is the worse for our success. In countries where the virus has continued to rage throughout the year, attempts to boost online learning and supply a computer to every pupil have been much more aggressive, in his experience – and he and his workmates are talking to teachers around the world on a daily basis.
“Five years’ of development has happened in the past five months,” in the US, Europe, Asia and even parts of Africa, Drummond says. But in NZ, with schooling back to normal, the seize-the-moment momentum has dissipated.
Another observation from the Kami chairman: New Zealand, for all the things we do well, does not compare well in terms of the kind of centralised, standardised systems that make an education technology programme cheaper and easier to rollout, or troubleshoot.
Here, Drummond says, many schools have a BYOD (bring-your-own-device) hodge-podge, with students variously lugging, PCs, Macs, tablets or Chromebooks into class, to use online systems that often vary school by school (on the network, security and access front, Crown agency N4L or Network For Learning does offer a degree of standardisation).
By contrast he says, many schools in the US – particularly in California and New York – have implemented so a “1:1” approach where every student is issued with the same device, with the same software, and the same controls around internet access.
“The BOYD hodge-podge is obviously very appealing to cash-strapped schools everywhere,” Drummond says.
“But it comes with a cost though the demands on teachers, and through not taking advantage of potential learning benefits as technology gets tossed into the ‘too hard’ basket.”
So while hyper-growth is set to continue for Kami offshore next year, the local market could be a slightly tougher sell.
Others in for a big 2021
• Auckland startup Formus Labs, in the midst of its commercial launch, is using AI to make orthopaedic surgery a bit less like carpentry.
• Mark Rocket – New Zealand’s other rocket man – is developing an unmanned, solar-powered aerial vehicle that will fly for months at twice the height of a commercial airliner.
• Backed by telecommunications rich lister Malcolm Dick, Datagrid wants to build a super giant, $700m data centre in Southland – which would take advantage of the cold climate, and use a whack of the power generation freed up by the closure of the Tiwai Point smelter. And, yes, like Rio Tinto, he’s angling for cheap power.
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