Greenwood Technology takes on investors

By DANIEL RIORDAN

Deutsche Capital Partners, Direct Capital Partners and American venture capitalist Chris Coffin now have a 32 per cent stake in Auckland software developer Greenwood Technology.

The parties will not reveal the size of the investment, but Greenwood will use the money for an aggressive expansion plan that includes doubling staff to 110 within a year and likely acquisitions in Australia and Southeast Asia.

Greenwood was founded as Software Mechanix in 1992 by managing director Simon Greenwood, his brother Craig Greenwood and Geoff Greenwood, who is no relation.

It makes web-based business solutions and its customers range across the logistics, health, insurance and construction industries.

Greenwood is also a leading player in the rapidly growing ASP (application service provider) market, which allows companies to rent applications online rather than incur the capital, maintenance and obsolescence costs of owning systems.

Chicago-based Mr Coffin became interested in New Zealand technology investments during his time managing the America True campaign in last summer's America's Cup.

He says he is investing in a private capacity because of timing pressures but expects Vision Ventures, the venture capital company he heads, to commit money later.

Deutsche Capital, the private equity arm of Deutsche Bank, has spent more than $50 million on more than 10 investments in Australia and New Zealand, according to Deutsche Bank's New Zealand chief executive, Scott Perkins.

He said Deutsche Capital was impressed by the value Greenwood added to its customers' operations.

Direct Capital director Bill Kermode noted that the application service provider sector was still in its formative stage in New Zealand, but had a growth potential "greater than just about any other IT [information technology] sector today."

Direct Capital has invested more than $135 million in 22 unlisted companies since 1994.

The new Greenwood board will be Mr Coffin, the three Greenwoods, two Deutsche Capital representatives and one representative of Direct Capital.