Rocket Lab's new, larger, crew-capable Neutron Rocket, scheduled for its first launch in 2024. Video / Rocket Lab
EDITORIAL:
It's amazing to think that two of this year's hottest new Nasdaq listings are likely to be companies founded and steered by New Zealanders.
But it shouldn't come as a surprise given this country's rapidly evolving technology sector.
News that New Zealand-born shoe brand Allbirds is talking to banksahead of a possible initial share offer in the US comes hard on the heels of Rocket Lab's confirmation last month of an upcoming listing.
Allbirds founder Tim Brown visits Northburn Station. Photo / Vaughan Brookfield
Both would be huge deals, not only for the founders and other existing shareholders, but also for New Zealand's reputation for spawning successful tech companies.
Rocket Lab's planned US$750m capital raise could value the Peter Beck-founded company as high as $4.1 billion ($5.7b), while Allbirds – co-founded by ex-All Whites captain Tim Brown – was last valued at US$1.7b ($2.4b) following its most recent capital raise in October.
Now based in San Francisco, Allbirds sells more than a million pairs of shoes a year and includes high-profile customers such as Barack Obama and Leonardo DiCaprio.
The company is still a high-volume purchaser of New Zealand merino wool from sheep stations in the South Island. It now has more than 20 retail stores in the US, Europe, Japan and China.
Rocket Lab has a much bigger profile and is shooting for the stars with its plan of building bigger rockets capable of carrying people into space, not just cargo.
These are fantastic Kiwi success stories that will only get better with the increased access to funding, market discipline and profile that comes with listing on the public markets.
The only downside to their global aspirations is perhaps a lost opportunity for the New Zealand sharemarket.
Rocket Lab founder Peter Beck with a mockup of the nose cone for his company's larger new, crew-capable Neutron Rocket, due to be launched in 2024. Photo / James Rattray
But these Kiwi entrepreneurs are putting New Zealand on the global map like never before and interest from investors is spilling over.
March saw two substantial technology companies sold offshore, with Auckland-based retail software firm Vend going to NYSE-listed Lightspeed for $450 million, and Christchurch geologic 3D modelling outfit Seequent acquired by Nasdaq-listed Bentley Systems for $1.45b.
Again, these developments - while a lost opportunity for the NZX - are not a bad thing. Jobs are expected to stay in New Zealand – the two companies employ some 400 locally between them. And early investors like Movac, Punakaiki Fund and Pencarrow can recycle money back into the local tech ecosystem.
What the likes of Allbirds and Rocket Lab have also done is put further acid on the Government to support innovation and investment in the tech sector.
New Zealand's R&D spend remains woeful at less than half the OECD average.
The Government doesn't necessarily have to spend more to boost this. What it can do is encourage and enable investors to come here and set up shop.
A thriving local tech sector should include multinationals and overseas high net worth individuals who can provide the opportunity for Kiwis to gain global experience, grow the "ecosystem" and find new companies to invest in.
Hats off to the likes of Peter Beck and Tim Brown for showing the way.
