Six up-and-coming startups tipped to achieve great things this year

Business Reporter·NZ Herald·

12 Jan, 2018 05:00 PM7 mins to read

Georgia McGillivray, founder and chief executive of The Social Club. Photo / Supplied

A marketplace for social media influencers, an app to make investing easy and technology to analyse data from the stars are among Kiwi tech companies being tipped to watch this year.

Barnaby Marshall, seed partner at business incubator The Icehouse, says the startup sector is gaining momentum in New Zealand, with software technology blossoming during the past 10 to 15 years.

"What we're really excited about is that it is starting to mature and we're seeing more high quality startups starting in New Zealand and more of them exiting or going on to create big businesses, and that's a really important barometer for New Zealand growth and the economy for the future."

There were three successful exits last year — Stretch Sense which was sold for more than $120 million, PowerbyProxi which sold for more than $100m and iMeasureU which sold for more than $9m.

Marshall says successful firms were those who solved "pain points" and problems.

"The thing that ties all good startups together is that they find an underserved market and create a product innovation that serves the market in a unique way, that either reduces cost or creates new value."

Marshall is picking six emerging companies to watch this year.

The Social Club

The Social Club, founded in October 2015, is a social media influencer marketplace where advertisers can connect and run campaigns directly with influencers.

It was part of The Icehouse's Flux Accelerator program last year and recently raised $1.2m in capital to fund growth.

Founder Georgia McGillivray, 26, started the business after seeing how under-established the influencer marketing industry was in New Zealand.

"Our platform is similar to Airbnb, where it connects the holiday maker to the home owner, we connect the influencer to the brand," McGillivray says.

"The New Zealand market was quite behind other markets such as the UK and US, and so I saw an opportunity to come back here and build something that could educate the market, making it easy and accessible."

In just two years the company has grown its influencer database to almost 4,000 New Zealand and Australian internet stars and 350 brands, working with big-name clients such as Coca Cola, BMW, Cookie Time and Visa.

Its influencers include All Blacks, TV presenters, actresses and actors, and receives approximately 100 influencer applications to vet per week.

Marshall says The Social Club is generating revenue "in the millions".

"They've really found their niche market which is creating a way for brands to find influencers that suit their brand and then be able to engage with those influencers and start campaigns," Marshall says.

"They are building a product to essentially automate that process."

It has grown 15 per cent per month last year and doubled its staff count to 14.

McGillivray says the company will this year focus on educating New Zealand's influencer marketing space.

"Ultimately we want to acquire more of the New Zealand market but in doing that we want to help grow the New Zealand market as well," she says.

It would also be looking at overseas expansion and developing new platform features.

Jude

Open banking fintech company Jude is gearing up to launch in February next year, targeting students between the ages of 18 and 24.

Jude was founded by Ben Lynch, a former software developer for Xero, who had been working on the idea for four years.

The company recently raised $550,000 in a seed round which will be used to hire two developers early this year.

It is developing voice command-controlled banking, peer-to-peer payments and aimed to aggregate people's finance data into one app.

Marshall says Lynch's vision was "on trend".

"What he is going to do is really going to automate and replace a lot of what banks currently do," he says.

Lynch says the business will not be able to scale until New Zealand legislation changes to allow open banking, enabling banks to give out the personal banking data of their customers.

"The only way to make this work is for customers to willingly break the terms and conditions of banks as there isn't legislation in place."

Lynch plans to introduce messaging interfaces such as Facebook Messenger and voice activated bots such as Google Home or Amazon's Alexia to the product.

Code Lingo

Dunedin-based enterprise software business Code Lingo, scans code for errors and automatically corrects them.

The company raised $540,000 from two Australian venture capital companies, but received offers of $2.5m after initially aiming to raise $300,000.

Code Lingo founder Jesse Meek says the company treats software as data.

"What we're tackling is trying to unlock the knowledge in the software systems and use that knowledge to help orchestrate the process of software development," Meek says. "The central process of managing code quality is still very manual ... that means a human has to eyeball thousands and thousands of lines of code for something that is slightly out of place and it's ridiculous."

Meek quit his job as a software engineer in 2016 to start the firm.

"I wanted to solve this problem and I didn't have the scope to solve this problem within my career so that forced me to go out and create a company."

Code Lingo is fixing an interesting problem, Marshall says.

Meek says the plan for this year is to commercialise the company.

"2018 is where Code Lingo goes from interesting software project to scaling company bringing in revenue."

Nyriad

Cambridge-based company Nyriad has developed a technology for the Square Kilometre Array (SKA) radio telescope in Australia, helping to solve how to store, process and analyse astronomical data.

The company has a team of 60 computer engineers, has recently raised $10m and is working with companies such as IT services provider Datacom.

Marshall says Nyriad's revenue is tracking close to $10m.

"They are taking on a huge market which is replacing the fabric of computers — that's the vision they are projecting."

Sharesies

Everyday investment company Sharesies was launched in February last year, aiming to make it easy for people to get into investing.

It costs $30 annually to buy and sell shares on the online platform with a minimum investment of $5 into all funds.

Sharesies has over 10,000 customers which, combined, have invested $7.5m.

Co-founder Brooke Roberts says the company was set up after a lot of research on New Zealanders' attitudes towards investing.

"There's this perception that the minimum investing you need to get started is in the tens of thousands if not hundreds of thousands," Roberts says.

"The majority of financial institutions only really target the wealthy few, the democratising of investing hasn't happened in New Zealand and that's why we created Sharesies."

Marshall says Sharesies will likely generate $1m in revenue in the coming year.

"What they have done is create an application for young people and old people to be able to invest just like it would be if you were checking out through an e-commerce store," Marshall says.

"It's a really consumer-friendly way to start investing."

Ask Nicely

Consumer insights software company Ask Nicely has raised $6.7m in a capital raise round and has its sights set on becoming a billion-dollar business.

Co-founder Aaron Ward says the business was started three years ago because old-school marketing techniques were no longer working.

"What we know is people make purchase decision based on what they're friends say and what people recommend ... and so Ask Nicely was designed to be a piece of the machinery to make that process happen," Ward says.

Ask Nicely has 1,000 businesses using its service to increase customer attention including Jetstar, Xero and the Dallas Mavericks NBA basketball team.

The company is growing strongly, with the majority of that coming from the US.

"They are the classic well-focused startup — they do only one thing, but they do it extremely well," Marshall says. "They can get you up and running and measuring and managing critical metric in minutes."

Ask Nicely has 30 employees split between offices in the US and in New Zealand.