Plexure boss Craig Herbison has hired 60 staff so far this year and is looking for another 50. Photo / Dean Purcell
In Harold and Kumar Go to White Castle, a pair of stoners have trouble even locating one of the fast-food chain's restaurants.
In real life, the US White Castle chain has turned to Kiwi company Plexure to get more customers in the door.
So has McDonald's, which will soon begin a "geo-fencing" trial that will see orders prepared once Plexure's app senses a smartphone-toting customer is close to arriving. Some 2600 McDonald's outlets in Japan will use the technology.
Big customers have meant a big hiring drive. Auckland-based Plexure has taken on 60 staff this year, boosting its total headcount to 100, and chief executive Craig Herbison says it's looking for another 50.
It's a familiar theme. While economic sentiment overall hangs in the balance, the tech sector is generally bullish.
The Herald has recently reported on Vend's push to hire another 125 staff and Rocket Lab's efforts to get another 100 bodies onboard. The Technology Investment Network says the number employed across the tech sector as a whole rose 4.7 per cent last year to 47,417.
Like many of its peers in the software industry, the NZX-listed Plexure is New Zealand-based but, thanks to its product being sold and served through the cloud, easily able to operate globally.
Its software, which works through smartphones on the consumer side, is designed to manage mobile orders and payment, loyalty payments, personalised offers, analytics and operations integration.
Herbison says its target clients are anyone who owns physical stores and wants to use mobile phone-based marketing to lure more people to those stores, then get them to buy more once they arrive.
Plexure's largest customer at this point is McDonald's, which is using its app to market to about 130 million punters in 50 countries.
At this stage in Plexure's lifecycle, the golden arches loom large over its business.
Herbison says McDonald's accounts for about 80 per cent of his company's revenue.
And in April, the giant fast-food chain paid $5.4m for a 10 per cent stake in Plexure, making it the largest single shareholder (smaller investors include the taxpayer, via an ACC holding).
While the McDonald's investment was a vote of confidence, it also came with a caveat: a restraint of trade clause that means Plexure can't do business with key McDonald's competitors including the giant Yum Brands, which includes KFC, Pizza Hutt and Taco Bell in its stable.
Still, Plexure was able to get a new deal with another US fast-food chain, White Castle, over the line in July - by dint of negotiations beginning before the McDonald's deal. While it's tiny beside McDonald's, which has about 14,000 outlets in the US, White Castle still has 400 restaurants in 13 states.
Herbison notes that McDonald's did not get a board seat or advisory position as part of the deal, and highlights the fact that his company has big-name multinational customers beyond McDonald's, including Ikea and 7-Eleven.
He sees further growth in areas like "grocery, hotels, fuel and convenience like we do for 7-Eleven and of course big box retail, which is what we do for Ikea."
And regardless, Plexure's work for McDonald's is rapidly expanding, too.
The location-based ordering pilot will shortly begin for about 2600 McDonald's outlets in Japan, managed through Plexure's smartphone app. The idea is that you order your Big Mac, but the kitchen only prepares your order once you hit a "geofence" - as captured by the GPS on your phone. It could be, say, once you're within 2km of the drive-thru or a table - depending on how long it will take to get your order ready.
It's no small exercise. McDonald's has about 16 million Japanese customers registered for its Plexure-powered app.
In the near-to-medium term, most of Plexure's growth is likely to come from the US, says Herbison, who spends about two weeks of every month offshore, often in the States talking to potential new customers.
He says the overall mobile marketing industry is worth about US$53 billion ($83b) worldwide, with the US accounting for some 41 per cent of that total.
But for now at least, Herbison sees no reason to shift the business from Auckland, which is home to almost all its staff, beyond a handful of account managers in the US and Europe, and six staff embedded with McDonald's Japan.
"The development community in New Zealand is particularly strong," he says. "We seem to be able to get the technologists and the data scientists we need from the local market.
"We get plenty of overtures from parts of the world where labour is cheaper. But we like the culture we've built up here. And I think in terms of the quality of the work, we just need to make sure we keep our arms wrapped around what we're doing and we're not really at that point where we need to offshore any of it.
"We are constantly asked if we're [located] in the right market given we don't actually have a deep pool of customers or customer opportunities in New Zealand. But the core of what we do today is still that we're a software company that builds software. We're committed to New Zealand."
He says immigration and a steady stream of graduates - particularly from AUT - means there hasn't been any skills shortage to hamper Plexure's hiring drive.
Plexure has been an NZX star this year. Even after a recent dip, its stock is up 366 per cent over the past 12 months thanks to the McDonald's investment and other positive news, taking its market cap to more than $122 million.
Things weren't quite so sunny when Herbison arrived two years ago.
"When I came to the business, the revenue was a little bit soft and we were burning a lot of cash so the first phase was to steady the ship and get us right-sized," he says.
Today, the numbers are looking a lot healthier.
For the year to March, Plexure's net loss shrank to $703,000 from $1.7m a year earlier, and it would have been in the black had it not recognised a $1.7m change in fair value when holders of a convertible note chose to convert that debt to equity.
Revenue climbed 44 per cent to $16.9m, with the bulk of that growth coming from McDonald's adding 17 more countries in the year.
The company's operating net cash inflow rose to $3.9m from $2.6m and it scaled back spending on software development to $628,000 from $944,000.
Like many tech companies, growth is the operative word.
When asked when Plexure could hit profit, Herbison defaults to a riff on growth and the potential, after a successful year, to use some of his company's cash to "go harder" in its efforts to bring more customers onboard.
Plexure is sitting on $12.7m in cash, and chairman Phil Norman recently said it is looking at acquisitions to accelerate growth.
Herbison says the mobile marketing sector is growing at compound annual rate of around 23 per cent, and direct competitors like US companies Airship, Vibes and the Salesforce-backed SessionM are expanding fast.
Plexure has to keep piling on bodies, and customers, to keep pace.
The Herald has previously encountered Herbison in various corporate guises, including brand and marketing director at Spark and director of retail banking and marketing at the BNZ.
Did he find it something of a culture shock to move to Plexure - which then had a couple of dozen staff occupying a small office above a restaurant - in 2017?
"Yeah it was," he says. "But in the early part of my career, I worked in digital agencies and web development companies, so it was a little bit back-to-the-beginning before I became a marketer and ended up in larger organisations."
He adds, "I like the entrepreneurial spirit. When you lead a business like this, the impact you can have is pretty immediate, which is great. But the big-governance way of doing things can help. You can bring some of those elements to a business when it starts to evolve from being very entrepreneurial to become more enterprise. With big brands like McDonald's, Ikea and 7-Eleven, there comes a point where they like your entrepreneurial spirit but they do want you to start working in a far more enterprise-type fashion."
And even though Plexure is still relatively tiny, he says it helps to know how multinationals think, which is where his BNZ brain is useful.
"When I pop into a C-suite to talk to the CEO and CMO, I understand what the business case is in their mind and what they're trying to construct," he says.
Long term, does he see Plexure following some of its rivals onto the Nasdaq or NYSE?
He says to seriously foot it on the US bourses, you need annual revenue of at least US$100m.
"That tends to get you a $1b valuation. If we look at our direct competitors, a couple of them are already in that space in the US, which really speaks to the market opportunity.
"That would be a great ambition for us and I'm sure we'll be there at some point."
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