Capital Markets report: Sharesies - sharing Kiwi ingenuity with the world

Allbirds founder Tim Brown visits Northburn Station where Allbirds source the wool for their products. Photo / Vaughan Brookfield

Whether you measure a country's technological prowess by its research and development budget, percentage of foreign venture capital dollars, start-ups per capita, or global market share in tech-heavy areas such as cyber security, Israel generally shows up at the top of the lists. Arrays of innovative start-ups attract a lot of attention. This leads to Israeli companies often merging or becoming acquired by larger multinationals.

But some choose an international IPO, often on a large exchange. The Nasdaq's orientation toward tech companies makes it compelling for Israeli companies to list there.

With 79 companies and a combined market capital of $US88 billion, Israel represents the only Middle Eastern country listed on Nasdaq. In short, Israel is a powerhouse country for the exchange.

NZ-founded company Allbirds is set to follow Rocket Lab as the second company founded by a Kiwi to line up a multibillion-dollar Nasdaq listing this year. The manufacturer of footwear made from New Zealand merino wool and recycled materials was founded in 2006 by ex-All Whites captain Tim Brown and Joey Zwillinger, a renewables engineer Brown met in San Francisco, where the company is now based.

Allbirds, which sells more than 1 million pairs of shoes a year, is reportedly interviewing banks ahead of a possible IPO, while the shoe company's online sales success during the pandemic has attracted calls from SPAC (special purpose acquisition companies) that are now driving many public listings.

Rocket Lab announced in February that it planned to list on the exchange with a valuation of US$4.1b (NZ$5.7b) through a merger with a shell company, Vector Acquisition, set up for the purpose.

New Zealand, for what traditionally is considered to be a utility-based market, has some exciting growth opportunities in the tech sector, according to Craig Investment Partners senior adviser Peter McIntyre.

"It's interesting that you talk about Israel, because probably a decade ago, the NZX was really looking at the Israeli market with their tech-savvy stocks. The ASX pretty much has got in there as well. But Rocket Lab and Allbirds have global brands and awareness, and when you have global awareness, and brand power, those two things are key attributes for listing on the American market."

Benefits from these high-profile listings include increased analyst coverage of their stock performance and access to a larger pool of investors with large appetites for risk.

McIntyre says companies like Xero who move to primary listings on other exchanges from the NZX, do so because the access to capital is greater, there's a greater range of fund managers, and consequently, a greater amount of investors prepared to take risks.

New Zealand companies that are listing on the Nasdaq or contemplating such a move can look forward to analysts working with fund managers or broking houses to push out research to their clients, so, again it goes out to a "greater universe".

Most NZ tech companies start off with three or four people, but in time grow to where they are valued at $50 million to $100m, and they are attractive buys to a larger concern.

Dunedin-based cloud software firm Timely provides a cloud software service to help businesses like hairdressers and beauty salons manage appointments. It's been sold (subject to Overseas Investment Office approval) to US technology firm EverCommerce for more than $100m.

In New Zealand, McIntyre thinks the mindset among some NZ tech companies that their payday comes once they are bought out is subtly changing, as they become more global and inclined to become "a little more world-conquering" and start listing in their own right.