KEY POINTS:
Auckland contact centre software company Datasquirt has chosen to list on the Australian Stock Exchange rather than the New Zealand market to raise up to A$12 million ($13 million) for international expansion.
Founder Mark Loveys says the step reflects the state of the Australian market, rather than a lack of confidence in the NZX.
"We looked at both. We just felt more enthusiasm in the Australian market. We had access to larger amounts of money, and larger institutions were interested," Loveys said.
"The Australian sharemarket is healthy, it's in a cash rich situation at the moment. It's harder to raise money here. The New Zealand psyche is we tend to be a bit harder on ourselves than other economies."
The presence of two Australian-based directors on the Datasquirt board tipped the balance. Lindsay Phillips from Nightingale Partners chairs Flat Glass Industries, which listed on the ASX in November.
Datasquirt will remain a New Zealand company, retaining its head office in Auckland.
The float is being handled by Melbourne-based Bell Potter Securities. There is a fully underwritten minimum subscription of A$10 million, or 11,111,111 shares at A90c, and a maximum subscription of A$12 million. This values the company at A$28 million.
Loveys said in line with Australian listing rules, existing shareholders, who include the founders, staff and venture capital partners, can't sell their shares for at least a year.
An ASX requirement is that there be a minimum of 450-500 shareholders.
"We'd really like to have a New Zealand base of shareholders," he said.
Loveys has been involved in a series of successful start-ups, but this is the first time he has taken one public. He was part of the team that set up PC Direct, which was sold to Gateway.
Some of the systems developed for that company were the springboard for accounting software package Exonet, which was sold to Solution 6 in 2000.
Loveys and Aaron Ridgway set up Datasquirt in 2001 to look for "the new big thing" in business software.
"We could see the prevalence of text messaging taking off at that time and other mobile technologies. We thought let's have a go, let's see if we can find a useful application for this technology for businesses," Loveys said.
For the first couple of years the company developed tailored solutions for organisations, such as a bus timetable lookup system for the Auckland Regional Council.
"It's very much a Kiwi software development approach. We try to be all things to all people, then after a year or two we see common threads with these applications."
Businesses wanted a lot of automation in the way non-voice messages such as text, emails and faxes were handled.
If the message couldn't be handled automatically, it needed to go to a call centre. "After three years we redefined ourselves as non-voice messaging enablement for call centres, and developed a product called Contact," Loveys said.
Contact is used by organisations such as Elections New Zealand for voter registration address changes via SMS, the Ministry of Justice for fines collection reminders, Fonterra for order processing and Coca-Cola Amatil for staff communications.
Datasquirt is forming partnerships with companies in the US, Europe and Australia. Datasquirt's Initial Public Offering (IPO) closes on August 16.
THE IPO
* Datasquirt is to list on the ASX.
* The float will have a minimum subscription of A$10 million, or 11,111,111 shares at A90c.
* The maximum subscription is A$12 million.
* The float values Datasquirt at A$28 million.
* The IPO closes on August 16.
