We’ve heard it all before: ‘Somewhere or other is destined to be the next Silicon Valley!’ But this time could it actually be true? And could the Garden City really be NZ tech’s next big thing?
Ask any of the wannabe entrepreneurs orbiting one of Central Christchurch’s myriad cafes and they’ll tell you — something is rumbling underground in Christchurch, and it’s not the Greendale Fault. Rather, this underground murmur is emanating from the city’s shiny new innovation precinct.
Supported by the Canterbury Development Corporation (CDC) and the Ministry of Business, Innovation & Employment (MBIE), the burgeoning innovation hub covers three city blocks bounded by Lichfield, Manchester, St Asaph, High, Tuam and Madras Streets. The Precinct forms part of Christchurch’s revitalisation project and is designed to concentrate technology-based firms — from start-ups to global organisations — in the central city.
There’s already real pedigree in the zone — including anchor tenants Vodafone, Wynyard Group and Kathmandu — but one of the most exciting facets of the project are the hubs set up to support start-ups and early stage firms, such as EPIC, or Lichfield Street-based GreenHouse, a communal space housing Banqer, Property Plot and debtor management software solution, Debtor Daddy, among others.
“The tech start-up scene is gaining momentum in Christchurch,” says Debtor Daddy CEO and GreenHouse resident, Matt McFedries.
“The idea is that ‘if you build it they will come’, and that’s what’s happening. People are putting their money where their mouth is. We’ve got big guys like Vodafone, Wynyard Group and Kathmandu here, and The GreenHouse is growing every day.”
“To me it's about creating the environment where there’s an expectation that this can be done — the idea that a startup is a viable career trajectory for somebody. And part of that is we should be celebrating our achievements because there are some great software companies here. Banqer is doing great things in banking education. And look what Wynyard Group is doing on the global stage in security software.”
But building a new hot spot for tech innovation — especially one so far south — isn't without its challenges, and that included issues around securing investment.
“The culture is in it’s infancy here and that plays out in investment activity,” says McFedries. “Christchurch investors need to get out there and represent. I know that, for Debtor Daddy, if it hadn’t been for investment from Auckland and Wellington, we would have been out of luck.”
“There are investor groups here which are great, but the fact is, there’s simply more experience in investing in start-ups in Wellington and Auckland. In Christchurch there’s a lot of property investment — the safe stuff — but less so for tech start-ups, so a lot of it comes down to comfort and experience I think.
“A start-up coming out of [Kiwi business accelerator] Lightning Lab could have a million dollar-plus valuation and may have only been around for three months. That’s a high risk investment, and I think that investing in Lightning Lab is considered a bit left-field at the moment. That’s got to change and luckily it is changing.”
And while location and investment dollars are both crucial to start-up success, some Christchurch firms are finding securing top line talent locally a challenge. In fact, all four of Debtor Daddy’s most recent hires have come from outside of Canterbury.
“There are more developers in Wellington and Auckland, probably because the software scene is there is bigger,” he says. “They are further along the the path, therefore they've attracted, trained and built up a high level of talent. So, right now it’s a case of trying to bring some of that talent down here.”
“There are some really strong software houses down here already — like Resolve Digital and Trinio — but that in itself can make it hard to extract people from those companies. There’s a demand for talent that’s currently very difficult to satisfy. Developers are the shovel in the gold rush of building software.”
So are we on the cusp of a start-up boom time here in Christchurch?
Absolutely, says McFedries.
“Cloud software, the low cost of creating an app, the process around Lean Startup, everything has come together to make this a viable way forward for a lot of people, and the Innovation Precinct is really supporting that. The Polytechnic and the University are churning out more developers, there are meetups happening all the time that make them easier to find, and for an entrepreneur, you can go to a start-up weekend and hit the ground running after three days. That wasn't around ten years ago. It’s a perfect storm in a way and all the building blocks are right here.”
And all the signs indicate that the hub is gearing up to expand, with Science and Innovation minister Steven Joyce saying that growing the innovation precinct further makes a lot of sense.
“The aim is to attract a critical mass of talented people and businesses, and ensure a thriving, competitive and knowledge-rich local innovation ecosystem,” he says.
“We know that clustering firms and researchers together generates economic benefits through creating scale, providing an attractive environment for skilled workers, and encouraging knowledge sharing.”
"This is a city of innovation – it always has been – and it is innovation that will take us forward from here."
Article by Jonathan Cotton, content marketing manager at Debtor Daddy