The announcements came in quick succession on Friday – first that Christchurch-based geoscience software maker Seequent had been sold, then retailing application Vend too.
The Seequent acquisition was by far the larger of the two, with the Nasdaq-listed engineering software company Bentley Systems paying $1.46 billion for the company.
Vend’s purchaser was one of its chief rivals, Lightspeed, which paid $480 million for the Auckland company in a cash and shares deal. It was a momentous day for founders Vaughn Fergusson and Mark de Freitas. With an 8% stake in the company between them, they will receive $22 million in cash and roughly $18 million worth of Lightspeed shares.
Square Peg, Movac and a list of other investors will also cash in on their stake in a company founded in 2010 and which now has around 460 staff. Vend was closely associated with Xero, as it fits into the accounting software maker’s app ecosystem and focused on making the admin of running a business simpler.
Seequent has been more low profile in New Zealand even as it has grown rapidly around the world. In 2018, 75% of the company was bought by American private equity company Accel-KKR. Founded in 2004 as a one-man band, Seequent has grown to have 430 staff, 173 of them in New Zealand. The plan is for the New Zealand division to remain intact.
“Seequent will continue to operate as a standalone business unit within Bentley,” Seequent’s management said in a statement.
“This change will not impact current staff and active recruitment continues. Seequent is a born and bred Christchurch business and, importantly, its HQ and main R&D centre will remain in Christchurch following the completion of this transaction.”
Shaun Maloney, who has been Seequent’s CEO for over a decade, will retire with the sale to Bentley. The news comes two weeks after Rocket Labs announced its plans to list on the Nasdaq in a deal with an existing listed entity that values the company at over $6 billion.
Kiwi tech is hot at the moment and rightly so. These three companies represent the best in their wildly differing fields. There’s always a tinge of sadness when these big exits are announced. With the end of New Zealand ownership comes loss of control. Seequent and Vend are now at the whim of their international owners.
We’ve seen how that worked out for the likes of Navman and Christchurch company Humanware over 15 years ago. Their acquisition spelled the end of them as significant local tech companies.
But Seequent and Vend both have greater scale and their success is firmly rooted in the teams they have developed locally. So there’s a good chance their R&D and software development will remain rooted here.
The lucrative exits will enthuse the local tech investment community. Capital has traditionally been hard to come by for early-stage tech start-ups here. But as our tech scene has matured, international and local investors have increasingly opened their cheque books.
The key now is making sure we have a strong pipeline of companies coming through, with innovative ideas and the technology to back them up. If the sale of companies like Trade Me is anything to go by, some of the cash from the exiting investors of Seequent and Vend will find their way back into the next generation of tech companies.
Trade Me founder Sam Morgan was an early investor in both Vend and Xero. But he also served on both company’s boards, bringing his considerable experience to them. That experience among the current crop of exiting entrepreneurs will prove as or more valuable than the investment cash they now have at their disposal.