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Waikato-founded tech firm Nyriad has encountered more choppy water and is laying off some staff in the US.
But rich lister Guy Haddleton - who shifted the firm's incorporation to the US following a US$20 million raise last year - told the Herald that the cuts were small.
He's standing by the firm, and remains bullish on its long-term prospects to upend the storage technology industry - to the point where he's tipping in more of his own money to help tide the firm over until the suddenly-dark venture capital skies clear.
The trim related to two factors, Haddleton said.
First, a decision to locate Nyriad's US headquarters in Austin, Texas - home of new CEO Derek Dicker - rather than the west coast.
"When launching a new territory - or in this case a new country - first decisions often aren't the best decisions. We thought we were going to be headquartered out of Silicon Valley. But then we recruited Derek Dicker as chief executive who comes from Austin - and that is where Nyriad's center of gravity will be, going forward."
Secondly, a decision to delay a "major" raise until late next year amid a "big chill" that has swept through the venture capital sector.
More broadly, global supply chain disruption had also been a "massive problem" for Nyriad, which claims its "UltraIO" hardware offers breakthrough performance, scalability and reliability, by dint of harnessing the power of GPUs (graphical processing unit chips) for a "revolutionary" new storage system for large organisations.
"Given the large raise has been deferred - we need to reduce our ramp and cut our cloth accordingly to where the new HQ will be," Haddleton said.
"The company had planned for a substantial capital raise in early 2023 - to continue a massive growth ramp," Haddleton said.
"Clearly this timing is inappropriate given the state of the markets. As lead investor, my fellow large investors and I will participate in an interim raise for the company until the timing makes sense for a larger raise - potentially from the third quarter of 2023."
Haddleton's comments came after Blocks & Files, which specialises in the storage sector, reported Nyriad was laying off "half its US workforce."
It published a Nyriad "Employment Termination Program" memo, dated October 14, that listed 12 US roles that would be "affected" and 16 positions that would be "non-affected".
"Nyriad's New Zealand organisation has 60–70 people and its fate was not mentioned," Blocks & Files said.
In response, Haddleton told the Herald, "No New Zealand team member has been let go - and there are no plans to do so."
Blocks & Files said, "The US sales team has been tasked with bringing in [US]$8 million in revenues by June 2023 – nine months – to avoid a shutdown.
"We are told that Nyriad has sold less than $200,000 worth of products and services, and effectively has no run rate. The [US]$8 million target seems a bit of a stretch against that background."
Haddleton told the Herald, "As one of the first investors in Xero and on their board for the IPO, as co-founder of Anaplan and a director until its IPO - I rate Nyraid as potentially the best investment I've ever made."
He added, "The qualified pipeline is three times what Anaplan's was at the same stage - again the strongest I've ever seen for a company at this stage."
"We have sufficient supply to deliver [NZ]$15m of bookings. Supply has been a massive problem for us this year. The New Zealand team has done remarkably well resourcing and securing components in the most challenging conditions."
The Auckland-based Haddleton and his wife Susie founded two business-planning software ventures: Adaytum (sold to IBM for US$160m in 2003) and Anaplan, which raised US$263.5m when it listed on the NYSE in 2018 at a US$3 billion valuation.
In October 2020, the rich lister emerged as something of a white knight for Nyriad, leading an $11m raise to fund expansion into the US, where the firm anticipated making its first sales. At the same time, Haddleton became chairman. Geeky co-founders Matthew Simmons and Alex St John exited stage left IBM veteran Herb Hunt was named the new CEO.
Nyriad was formed in 2015, with Simmons initially looking to exploit supercomputing opportunities emerging from the Square Kilometre Array project - a multi-country bid to build a huge virtual telescope by linking radio dishes across a vast area. But both major political parties were dubious about the $2.5b SKA's benefits, and New Zealand scaled back its involvement and then pulled out of the project altogether in 2019.
As the SKA wilted, the revenues-less Nyriad became listless. Interns and staffers had a field day on Glassdoor. It became hard to fathom exactly what the company would eventually sell, or to whom.
There were forays into a number of areas, including the blockchain technology that underpins cryptocurrencies.
After a review, Haddleton said it was decided Nyriad should focus purely on a high-performance storage controller, which it sees as the successor to the RAID technology that has long controlled how data is stored on a drive, or array of drives.
Hunt was named as the firm's new CEO in October 2020. He stepped out on his own in March this year, in favour of Intel and Micron alum Dicker, but still keeps a hand in as executive chairman.
While it's been a bit of a moveable feast over the past two or three years, Haddleton maintains Nyriad has landed on a top team.
"Derek in a very short time period has demonstrated superb CEO skills, Andrew Russell is, without doubt, the best enterprise sales leader I've come across, CFO Steve Lance had led multiple US IPOs," he said.
"And in New Zealand, Peter Boyle [head of engineering], Rob Hocking [CIO] and Dr Stuart Inglis [chief technology officer] have exceeded all expectations. If I had managed to recruit a similarly high standard of execs at Anaplan at the same stage, I would have been thrilled."
Nyriad forms part of what could be called a keeping-life-interesting portfolio of Haddleton investments that also includes vaccine technology maker CVC and cannabis startup Helius.
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