It was big news in the Kiwi start up community last week when Apple confirmed it would acquire Auckland start up PowerbyProxi.
And NZTech’s CEO Graeme Muller says that the deal is confirmation that New Zealand is on the right track to become a global tech story - and be known for our technology just like we are for tourism.
“When the world’s largest tech firm purchases our technology, in this case PowerbyProxi, we know we are on the right track, doing some great things,” adds Muller.
“The purchase of PowerbyProxi by Apple is another sign of the growing strength of New Zealand as a leader of tech innovation. The top 200 tech exporters are now selling more than $7 billion a year into offshore markets while employing thousands of Kiwis here in New Zealand.”
Muller says employment across New Zealand’s tech sector increased by 22% between 2015 and 2016 and now accounts for 6% of the national workforce.
“The University of Auckland has become a global centre for wireless charging research and has a faculty built around inductive power transfer, a field pioneered by two Auckland University professors and now used globally.”
“Having licensed the technology to PowerbyProxi, the university will probably continue to gather licence returns from Apple, and others, as this technology goes mainstream.”
Muller continues, “Apple plans to keep the PowerbyProxi business and team in New Zealand, no doubt to stay embedded within the world leading wireless charging faculty at Auckland.”
“As well as licensing returns for the university and ongoing job growth, the government would have had a decent tax take from the sale as most businesses like PowerbyProxi typically have employee share schemes of about 10% of the value of the business.”
“If Apple purchased Power by Proxi for $100 million, which isn’t beyond reality given Funderbeam estimated their valuation at $112 million late 2016 and if they had 10% secured as employee share options, then the purchaser would have had to pay millions in tax.”
Muller says this is not the first time a multinational tech giant has acquired a successful and growing New Zealand tech firm, which is evident in the recent TIN Report.
The report finds that 16% of New Zealand’s leading tech exporters have some international ownership.
“They continue to invest into these local entities, often for the R&D capabilities, employing more than 5000 people. Not only are they good export earners and employers, the proceeds of the sales usually find their way back into the local tech ecosystem.
“When the owners of TradeMe cashed up many of them invested into Xero to help the next big tech story grow. Other examples of global players still invested in New Zealand include Allied Telesis, BCS Group, Dynamic Controls, Intergen, Skope and Schneider Electric.
“In tourism, New Zealand has been rated one of the top 10 hot spots to visit in the world in 2018, we will soon see in the coming years that, per capita, New Zealand becoming one of the top 10 tech countries in the world.”
“We are not just rugby and tourism anymore.”