$4m flows into software maker

By DANIEL RIORDAN

AMP Henderson Private Capital and Caltech Capital Partners have invested $4 million in Auckland software developer QED Software to help finance its growing international business.

QED was founded 17 years ago as a bespoke software developer, designing systems from the ground up for clients who couldn't buy them off the shelf.

Chief executive Michael Hartley, 34, led a management buyout with three partners in 1997, with the intention of taking the company's products to international markets.

That plan has worked. From nothing in 1997, export revenues have grown to 60 to 70 per cent of total sales. But the growth requires more capital than the company could generate internally - hence the $4 million investment, the culmination of pitches to venture capitalists that started last year.

QED's key product, Hercules, focuses on transport logistics for small to medium businesses. Clients can access the product through application service provider (ASP) technology in the US, Australia and New Zealand.

Originally built for Tapper Transport in Auckland, Hercules has been sold to other New Zealand trucking firms.

It is also used by Nova Transport, the second-largest container freight station in the Long Beach, California, area.

The total package allows trucking companies to increase efficiency in all transport activities.

AMP Henderson Private Capital head Martin Turner says QED was attractive because of its quality management, its history of success and its blue chip stature among local software developers.

The parties will not say how much equity Mr Hartley and his partners have given up in return for the funding.

The company employs around 60 staff - 40 in Auckland, and the rest in India and California.

India?

Mr Hartley says the flexibility of the Indian workforce was greater than that in New Zealand, allowing the company to employ more or fewer people at short notice as big jobs came up and were finished.

And the Indians available for hire are better qualified than their New Zealand counterparts.

Caltech director Douglas Paul takes a seat on the QED board, which is chaired by Neville Jordan, founder of MAS Technology.

AMP Henderson has invested $150 million in small New Zealand companies over the past couple of years, said Mr Turner. It has about $38 million left to invest from its Private Capital NZ Fund, which closed last year at $51 million. It can also call on funds from AMP Life.