Rich lister Guy Haddleton saves failed start-up Nyriad as Exaba rises

Guy Haddleton says Exaba will shortly have one of the largest data storage centres in New Zealand. Photo / Jason Oxenham

The once super-hot, supercomputing firm Nyriad – the Waikato-founded start-up which once employed 100 – is being wound down by its US-based leadership. But Kiwi rich lister Guy Haddleton has revealed a cunning plan for a phoenix company that’s rising from its ashes – which will, in part, cash in on the data centre boom.

First, the bad news: Nyriad’s Austin, Texas-based chief executive Derek Dicker has confirmed a leaked memo that said the firm – which sells technology to supercharge huge amounts of storage – is in the process of “an orderly wind-down”.

The company was founded in Cambridge, Waikato in 2014 - scoring two $350,000 dollops of Crown funding as it sought to exploit opportunities around New Zealand’s bid to co-host the multi-billion Square Kilometer Array radio astronomy project.

After our Government scaled back its SKA participation to next to nothing in 2018, Nyriad refocused on the commercial market for its graphical processing unit (GPU)-based technology. IBM veteran Herb Hunt – later replaced by Dicker – helped establish a US office from 2019, raising tens of millions in venture capital as New Zealand tech entrepreneur Guy Haddleton stepped in as chairman and a key financial backer.

But Nyriad failed to get product out the door and only managed minimal pilot sales before a round of layoffs last year, an attempted sale earlier this year, and now the decision to wind down the company.

“I had always thought the company should offer a universal storage software platform across all hardware platforms. Thus, I made an offer for some hardware and software assets that was robustly declined. The directors were intent on securing a market price for all assets and I withdrew from direct negotiations,” Haddleton said.

Now, the good news.

Although Haddleton failed in his purchase bid, he did underwrite a bid by two senior Nyriad staff to pick up key assets – which have been bundled into the Hamilton-based Exaba, registered in March.

Dicker declined questions about the negotiations and other topics, but confirmed the sale of patents and “the vast majority of Nyriad’s remaining system inventory. All creditors would be paid as part of a managed wind-down”.

Tech entrepreneur Guy Haddleton has an estimated wealth of $800m from the sale of two business software planning start-ups to US giants, his early stake in Xero and other investments. Photo / Jason Oxenham

“One of the largest data centres in NZ”

Haddleton sees Exaba as Nyriad reborn with a software focus. But it also has a high-capacity data centre in Hamilton – necessary for testing but which the rich-lister saw doing brisk business in the data boom too, which is only intensifying with the rise of AI. Its doors will be opened to customers who need to store a petabyte (that is one million gigabytes) of data or more.

The phoenix company is gearing up for its commercial launch.

“Exaba will shortly have one of the largest data storage centres in NZ and while we are developing our global software offerings we anticipate our early customers to be NZ businesses that have a requirement for a petabyte or more of storage at the most competitive prices and who seek NZ-based data sovereignty,” Haddleton says.

How the deal went down

Haddleton – who remains a true believer in Nyriad’s tech – identified two of the start-up’s staff, chief technology officer Dr Stuart Inglis and head of development Peter Boyle, as the firm’s key innovators.

“I indicated to these two executives that should they attract at least their top five developers to join them, I would fund them with $2.5 million to develop a best-in-class software solution for next-generation object storage and then scale-out file systems for AI and high-performance computing markets,” Haddleton told the Herald.

SKA tissue: Nyriad, founded in 2014, had its genesis in big data processing required for the multi-billion Square Kilometre Array radiotelescope project – but New Zealand scaled down its involvement in the multi-country initiative to almost nothing in 2018. Photo / Getty Images

“Pete and Stu took my challenge to heart. Not only did they secure seven of the very best Nyriad developers they persuaded Nyriad to sell them the NZ Nyriad data centre equipment – some $6 million of high-performance computing equipment, when purchased, and a freedom-to-operate software licence in return for a very small Exaba stake, less than 10%.”

Haddleton has means. The latest NBR rich list estimates his wealth of $800m from the sale of two business software planning start-ups to US giants, his early stake in Xero and other investments. His current projects include medicinal cannabis start-up Helius, backed by around $60m in investment, and solar farm builder Lodestone, which has raised $600m and counting. But he didn’t need to draw on much of it as the Hamilton data centre was picked up for a song – in server farm terms – amid Nyriad’s collapse.

The few customers loved it

“Nyriad had superior technology and its few customers loved it,” Haddleton elaborated.

“But gaining market traction to support additional financing was challenging as the solution was incomplete and as we discovered, complex to prove value during a proof-of-concept. Sadly, Nyriad ran out of time and money and the directors made the tough decision to sell the company.”

‘Vast’ AI growth ahead

“What was clear to me were two things. One, the data storage software market for cost-effective, performant, exabyte-scale data analysis and artificial intelligence applications would become vast over the forthcoming decade. And two, Nyriad had gathered together some of the most talented software developers with deep experience in the industry,” Haddleton added.

“Personally, I am very excited about this opportunity. A proven, very talented team ready to transform global data storage markets for exabyte scale applications – with a massive data centre capability at minimal cost.”

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.