Arria aims for NZX debut amid new listing drought

Arria is headed up by Sharon Daniels, a co-founder and former executive director of Diligent. Photo / supplied.

New Zealand's stock exchange is expected to get a new member before the end of 2018 amid a drought of new listings.

Fledgling artificial intelligence company Arria NLG expects to list on the NZX in the fourth quarter of this year.

If that comes to pass, it will be second listing on the NZX this year, following on from the QEX Logistics compliance listing in February.

Christchurch International Airport and WEL Networks have joined the NZX's debt market this year.

Arria, which de-listed from London's Alternative Investment Market in 2016, plans to debut in New Zealand as a so-called "compliance" listing, which entails the listing and quotation of existing securities without raising new capital.

The company - which has historical links to the now de-listed Diligent Board Member Services - is also looking at new technology as a source of funding, such as distributed ledger technologies associated with blockchain, and digital security tokens used in crowdfunding.

Arria NLG - for natural language generation - specialises in artificial intelligence that can read data and convert it into language.

Executive chairman John Joyce said in businesses were faced with an increasing load of data generated in the digital era.

"Being able to deal with the amount that is out there is next to impossible," he told the Herald.

"We are all struggling with that," he said. "What the technology does is that enables you to take that data and narrate it and focus on what matters and get to the point where you can start making decisions off the data rather than having just reams and reams of data," he said.

Arria is headed up by Sharon Daniels, a co-founder and former executive director of Diligent, which delisted in 2016 after its was bought by Insight Venture Partners.

Daniels said the executive team will remain in the US. The technical base will remain in Scotland, with a development centre in Sydney.

She said a listing on the NZX would prepare the company for growth and would give clients a greater level of confidence.

Arria has about around 300 shareholders - many of them New Zealanders and many of them former Diligent shareholders.

Ownership is spread across there shareholder base, and no one shareholder has more than 5 per cent.

Joyce said the company is nearing the end of a funding round, which is aimed at raising US$17 million.

"We will raise additional capital as time goes by, but we feel very comfortable with the fact that if we raise US$17m that we should get go break-even," Joyce said.

The company's revenue is expected to grow year over year from US$2m in 2018 to US$10m in 2019 (March 31 YE), he said.

Joyce spent 30 years with IBM in senior management positions including serving as its CFO under then-chairman Lou Gerstner.

When Joyce retired from IBM he took up a role with private equity company Silverlake.
Arria approached him 18 months ago.

"I said the company needs to do a few things to get itself ready, which is what it has been doing for the last 18 months."

Auckland-based CM Partners is acting as the capital markets advisor and NZX sponsor for the listing.