Kiwi firm flies coop

Derek Handley says New Zealand companies can't afford to stay at home forever. Photo / Paul Estcourt

The founder of a mobile marketing company that has closed its New Zealand operations says the move is a natural step because the country has insufficient resources for it to stay permanently.

The Hyperfactory, which less than two years ago sold for a reported US$20 million, closed its office in Auckland this month.

Co-founder Geoffrey Handley, who developed the business with his brother Derek, said it was always sad when an office closed but it was a positive move overall.

It is understood the company plans to focus on the United States, and the cost of maintaining its mobile infrastructure in New Zealand has become prohibitive. It still has offices in India and China.

Handley said New Zealand staff were told a year ago about the plan and any who wanted a job in the US were offered one. Six staff in the Auckland office have been made redundant.

"Over the past 10 years we have employed more than 200 people in New Zealand, contributed to the economy and to a lot of people personally."

Former competitor Modica Group picked up the remaining New Zealand mobile infrastructure clients. CEO Stuart Wilson said the company was in talks about overseas clients as well. "It's mutually beneficial for them to focus on the US and leave the rest to us."

He said he was surprised by the purchase price in 2010. "It was a stunning outcome for the owners." He said it would be interesting to see how they returned that level of value to their new owners.

Derek Handley, now chairman of Snakk Media which he is hoping to list as a public company in New Zealand, said: "Companies have natural phases and life cycles. For the Hyperfactory this is the closing of a chapter. However, I feel positive about the future spin-offs of all those who were a part of that journey.

"And there is something to be said about exporting certain types of businesses as a business model for New Zealand until we develop sufficiently experienced talent, funding and vision to create companies that can afford to stay at home forever. We reinvest the learning and proceeds from their early dreams back into new dreams - as Xero and many others are a solid testament to."

He will move into a non-operational role as chairman of The Hyperfactory. Geoffrey Handley said his own job had not changed. He said the brothers' relationship with their US buyers, Meredith Corp, was good and The Hyperfactory was growing well in the US.

One of Snakk Media's partners, Millennial Media, is listed on the NYSE. Stock rose 100 per cent on debut.