Prism eyes blueprint for expansion

Homegrown software developer Prism is seeking Kiwi capital to help it move ahead in the United States market. DANIEL RIORDAN reports.

Chris Johnson took Prism Group to Australia and Britain the hard way - by raising money from venture capitalists. Now he wants more to take on America.

Prism's last round of venture capital was $5 million from AMP Private Capital and Caltech Capital Partners in mid-2000, and three years before that Australia's St George Bank and Nanyang Ventures came to the party.

Now Prism, which develops software for the printing and packaging industries, is looking for a further $3 million. Managing director Johnson, based in London, was back in New Zealand last month doing the rounds. He says there are about a dozen investors - institutions and high net worth individuals - worth targeting for this sort of money. He expects some to come in with bundles of between $50,000 and $100,000.

"We looked at [going to] capital markets in the US and Britain but decided to come back here."

Johnson says New Zealanders have a strong interest in software companies.

Prism already has strong contacts here, and the investment climate is improving all the time.

"Five years ago it was hard work getting investors for software companies. Today there's been a big turnaround on valuations and attitude. New Zealand investors come in now on global standards - there's been a big increase in their maturity."

Johnson says Prism is past the hard yards growth years and nearing the time when investors look at exit strategies, such as a sharemarket listing or trade sale. He says no timetable has been set for this, but the company is looking for a new chairman, preferably a New Zealander with experience in taking a business from the $20 million turnover stage to something beyond $50 million and closer to $100 million.

The company, which has 93 staff, expects March year sales to be $22 million, and is targeting $30 million for next year.

Prism consolidated its US presence through an acquisition almost a year ago, and wants to carve out a bigger slice of a market worth close to $1 billion.

By March next year, Johnson expects US sales to be about $15 million compared with $3 million two years ago.

The company's potential customer base there is about 156,000 printers and graphic artists, compared with 15,000 in Britain.