“Can you remain in Christchurch as you become a global business?” the Herald asked Partly co-founder and CEO Levi Fawcett.
“The honest answer is ‘no’,” Fawcett said.
The ex-Rocket Lab engineer’s firm makes software that helps carmakers, organisations and marketplaces source, manage and sell hundreds of thousands of different car parts - a process that was largely manual until Partly’s clever algorithms entered the fray.
Its early customers include the UN’s World Food Programme (which operates a 30,000-vehicle fleet), eBay and Amazon. Last December, it raised $37 million (a New Zealand record for a Series A round) at a $180m valuation. It aims to nearly double its headcount to 100 this year.
“The long-term goal for us would be to have an engineering hub here, and probably an engineering hub in Auckland as well, and then a larger hub in Seattle or London, closer to where our core customers are.”
“Christchurch is a great place to start. We [Cantabrians] have a Number 8 wire mentality. There are a lot of people who just get sh*t done. And that has really helped us get started,” Fawcett said.
“But the reality is Partly is relatively small at the moment. There are 60 of us at the moment, but that’s going to double each year - and you just you can’t do that from Christchurch.”
Had the recent round of layoffs by the multinational tech giants made hiring easier?
“The reality is that most of the people being laid off are not very good,” Partly’s Fawcett says.
“That might not be generally true, but that’s what we’re seeing. On top of that, they’re often not engineers; they’re that extra layer, like product managers.”
Having said that, Fawcett notes that the recent squeeze on Big Tech helped Partly lure an engineering manager, formerly with Microsoft in Seattle, to a role in Christchurch.
Fawcett made his comments during a panel session organised by ChristchurchNZ, and during which he perhaps did not quite always head in directions anticipated by the development agency.
Nevertheless, with Partly’s success so far, from its record-breaking Series A raise to attracting talent like ex-Amazon general manager Tony Austin, Fawcett is living proof that Christchurch isn’t a bad place for a startup - from software firms like his to those that actually make stuff like Dawn Aerospace, Kea Aerospace, Syft and hydrogen storage and refuelling player Fabrum.
And the panel also revealed a surprising win in the video game sector. (Surprising because it was staged before Budget 2023, when many in the video gaming industry were still bubbling with anger about the Government’s failure to match Australia’s tax incentives for the sector, pushing talent across the Tasman. In the event, the Government came to the party on May 18 with a 20 per cent rebate.)
Robert Grant appeared for XR Games, which had recently opened a studio in Christchurch - its first development centre out of its home base in the UK. XR Games CEO Bobby Thandi later told the Herald his firm would hire at least 15 people in the city by year’s end.
The decision to base XR Games’ first international expansion in Christchurch came after Thandi visited the city in 2022. He said he found a great talent base and a supportive economy, as well as a fantastic lifestyle and work-life balance.
The clincher was partnership discussions with Canterbury University’s Digital Screen Campus, and Game Development programme, which Thandi said was a “huge pull”. The $96m programme, which involves a new degree and a new centre for special effects and other technologies that cut across film and gaming, was announced in September last year.
In other fields, tech firms have been able to grow globally from Christchurch. In March 2021, Seequent was sold to Nasdaq-listed Bentley Systems in a US$1.05 billion ($1.45b) deal. At the time, the maker of geologic modelling software had 430 people.
Today, it employs around 700, and it retains a large degree of independent operation from its US owner, external comms lead Liz Crawshaw said.
Most of Seequent’s customers had been overseas. Through its new owner, it had been able to expand into civil engineering.
Seequent’s technology has been used to help model Wellington’s sub-surface to better understand earthquake risks; to help Contact Energy drill wells for its Tauhara geothermal power station under construction near Taupo; and on Auckland’s City Rail Link to help ensure the tunnelling avoids the foundations of buildings and other man-made obstacles.
It’s also used for mapping unexploded ordnance for companies building windfarms in the UK’s North Sea “who don’t want to get blown up in the process”.
It’s all being driven from Christchurch, Crawshaw said.
“Essentially we’re a standalone business unit of Bentley Systems. We continue to work as a standalone business unit from New Zealand and have no plans to change that.”
Kiwi-Dutch firm Dawn Aerospace currently has 134 staff, with 71 in Christchurch - including chief executive Stephan Powell - and the balance in offices in the US and the Netherlands. That total includes 30 hired since January.
Powell anticipates taking on a total of 60 new staff this year as it continues to develop its prototype space plane (still some distance from commercial launch) and its propulsion and control systems that already power 12 operational satellites, with more on the way. The company recently signed a major deal with Lynk, which is in the early stages of building a network of 5000 low-Earth orbit satellites to compete with Elon Musk’s Starlink, and numbers 2degrees among its trialists.
Lynk and 2degrees revealed new details of their trial. And Lynk confirmed its next six satellites, launching in January, would be powered by Dawn Aerospace systems.
Powell said room to expand, access to the Glentanner strip for testing, and the Government and local agency-fostered Christchurch aerospace cluster were the key reasons that his firm relocated south from its original base in Auckland. Dawn Aerospace is near neighbours with Kea Aerospace, co-founded by Mark Rocket - Peter Beck’s one-time partner in crime at Rocket Lab.
Fabrum, which raised $23m in a Series A round in February, has entered a new phase of hyper-growth since it expanded beyond systems for cooling nitrogen and oxygen into the suddenly hot (so to speak) hydrogen.
“Twelve months ago, we had a staff of about 30. We’re now approaching 100,” global business manager Nigel Bartlett told the Herald.
“I’d say by this time next year, when we get into full swing, we’ll probably double our workforce again. It’s a good problem to have; it’s a challenging problem to have.
“They will be reasonably high-skilled - fitters, turners, engineers. But we’re not going to do it ourselves. We work with 14 other Christchurch businesses to create what we think is a world-leading technology.”
That includes cooling systems for the first hydrogen electrolyser - which will be in Gore towards the end of this year - for Southland trucking and fuel firm HW Richardson, which has one hybrid hydrogen truck on the road now with another 10 to follow, and the first lightweight composite liquid hydrogen tank for aviation, which Fabrum recently delivered to GKN Aerospace in the UK.
Bartlett said Fabrum’s approach partly sees it working with NZ universities on training and internships - “But we’re not so arrogant as to say ‘You must stay’, because it’s part of the Kiwi way to go overseas when you’re young.” But his firm is angling for some of them to come back.
Fabrum’s co-founders - chairman Christopher Boyle and technical director Hugh Reynolds - were both in Europe when the Herald visited Christchurch last month, meeting with customers and attending a trade event.
Sound on (spoiler: there’s not much to hear) pic.twitter.com/JeYuDLBt9J
— Chris Keall (@ChrisKeall) May 4, 2023
“When the guys are in the UK, they’re going to be catching up with a couple of former employees,” Bartlett said. The aim was to lure them back into the fold.
HamiltonJet global marketing manager Albear Montocchio told the Herald that his firm is committed to retaining its centre of operations in Christchurch, simply because that’s one of the tenets of the Hamilton family, which retains ownership of the firm founded by Bill (later Sir William) Hamilton in 1939.
The firm has had a recent burst of growth with the EV revolution, and a new line of business in electric and hybrid systems for the likes of coastal patrol vessels and ferries. It now employs around 250 in Christchurch.
While it is working on a propulsion and control system for Auckland’s first hybrid electric ferry, due next year, some 90 per cent of HamiltonJet’s business is now overseas, with builds currently on the go for customers in the US, Sweden and Australia.
Montocchio delivered his update during a spin on his company’s hybrid demonstrator boat Aria, which can switch between diesel and battery-powered propulsion - although the electric system is modest, offering 50 minutes at 5 knots or 10 minutes at 9 knots, suiting it to docking, with diesel power used for the main part of the Herald’s trip.
For a period over the pandemic, the firm had to fight to bring in enough skilled workers from the Philippines, Montocchio said, but it was now pretty much up to speed. He said the firm’s first preference was to hire locally, with in-house training where necessary, but the labour market has simply proved too tight.
Embracing the electric revolution seems, on the face of it, to involve a degree of risk. But Montocchio said the firm’s number of orders was strong, and that the new hires had all been funded via cashflow. Another of the Hamilton family’s tenets was: Never take on any debt.
NZ GDP falls 1% in September quarter; analysts expected 0.4% decline.