An ambitious initiative to develop 100 Māori technology businesses, including five unicorns, is claiming to have generated more than $17 million worth of value in just 48 hours through one hackathon, with millions more to come from deals in an international trade mission.
Te Tira Toi Whakangao, or T3W, is a group of Māori tech export companies and Māori investors formed to accelerate entry to market and foster investment relationships. Pilots for the programme are underway in Gisborne and Hawkes Bay with technology communities in both regions ‘coalescing’ together.
Barry Soutar, T3W project lead for New Zealand Trade and Enterprise, says the programme – which took more than a year to put together – has been developed to address the issue of a ‘disconnection in the ecosystem’, with a lack of support and access to soft and hard capital for budding tech companies, particularly in the regions which are ‘disconnected from economic growth engines such as the tech sector’. The programme also aims to encourage investment from the significant Māori economy, which while significant is highly concentrated on primary industry.
“Having a target of $60 million for this Ireland trade mission is fairly consistent with our previous achievements.”
“What we are doing is fixing the problem of all the gaps between the players in the ecosystem. We’re not replacing players or assets but connecting it better to ensure the rate of attrition is mitigated.”
T3W aims to provide access to both soft capital, such as education and support services, along with hard capital in the form of investment, government resources and infrastructure.
The five year programme aims to roll out to 30 target regional centres by 2020, with Auckland as the key path-to-market hub.
Rollout is expected to begin next year in the lower half of the North Island.
In order to create the planned 100 tech companies in the next five to 10 years – which Soutar says will add revenue of $500 million and an additional 2,500 jobs to the Kiwi economy. He’s claiming in the six months he’s been working in the Gisborne region on the project he’s already generated six new companies.
Those companies came via the 48-hour Hack Tairawhiti hackathon in Gisborne earlier this year which he says generated $17 million in value through staff relocation to Gisborne and IP on the prototypes created during the hackathon. The hackathon was lead by NZTE and T3W with support from Datacom, Māori technology companies and Māori investors.
Soutar says immediately after the hackathon Auckland’s Straker Translations began relocating staff to Gisborne, creating a satellite office.
He admits that while he would love to say it was all on the back of the hackathon and good will, it was also helped by Auckland’s house pricing. Twenty staff are expected to relocate to the region.
“I’m now partnered with another company to do a joined-up solution in Gisborne and between the two of us we’re bringing 20 companies to Gisborne in under a year flat.”
The hackathon is just one of a multitude of initiatives Souter has on the go. Next month he will take 25 ‘leaders’ to Ireland on a trade mission which he claims will bring home $60 million in deals. Gisborne mayor Meng Foon is among those attending the 10-day Ireland mission.
“We are going up there to celebrate the trade deals and help sign them.”
“This is my third trip. I did $28 million on my first one, and $20 million on the second one – with another $18 million [deal but the company] was snowed under and couldn’t sign them.”
“So having a target of $60 million on this one is fairly consistent.”
‘Coalitions’ of 10 companies will be developed around specific technology areas with each coalition ‘adopting’ a region and having a Māori player somewhere in the coalition.
Soutar admits the Māori component could be as simple as funding from Māori asset holding companies, or an IP holder or inventor being part of the coalition. “It doesn’t matter so long as there is linkage to Māori and regional.”
In fact, he admits that 95 percent of those involved will likely not be Māori. “It depends on your definition of Māori. My definition is are you going to help the Māori economy?’
“It’s not about being selective. Very bluntly, if you’re solving the Māori problem you get a lot of airtime. It’s highly political.”
A key part of the programme will be calling on New Zealand’s successful ex-pat community to help with funding, with Soutar aiming to call on successful ‘high net worth’ Kiwi expats. He says after discussions with CIOs in Gisborne he can name 20 high net worth people from Gisborne now living overseas.
“I’ve spoken to three of them who have said if we come up with a proposition in Gisborne they’ll put $100,000 in. We, as New Zealanders don’t know how to leverage whakapapa.”
That’s something Ireland does well, he notes. He’s hoping to convince the founder of an Irish programme that encourages funding from Irish ex-pats to allow a similar programme to be used in New Zealand.
Soutar is also keen to harness ‘global transformation ecosystem’ ExO Lever, which provides a methodology on ‘exponential transformation’.
Soutar says ExO Lever founder Salim Ismail is keen to democratise the system and Soutar says T3W will be working with the company on its ‘next global flagship project’.
Soutar says Ismail’s team will be visiting Gisborne in November to help build a business model which will then be added to their global platform to help other countries with an indigenous platform.
T3W participants will ultimately be run through the ExO Lever methodology, which validates business models and ideas and puts it on to a global platform for investment, before being released into the market.
Soutar says the T3W programme is ‘extremely deal focused’.
“We have to be because nothing else is going to gas our country. Robbing Peter to pay Paul domestically doesn’t do anything. You’ve got to bring money in from overseas so we have a very hard optic on deal making.”
Soutar says a Māori Angels Network is already kicking off with personal funding from the founders of Robotics Plus and Straker Translations, with discussions for a Māori Venture Capital sidecar fund also now underway.
He notes that there is an extensive Māori economy: “Here in New Zealand you probably have towards $50 billion in value across the Māori economy.”
He says while those companies have been ‘clinically economic’ the pressure is now on for ‘quadruple bottom line’ – a practice that requires purpose/spirituality/culture to be added to the more traditional three bottom lines of people, planet and profit.
“My job is to help educate those very conservative asset holding companies to technology as an investment class. Hence the Ireland mission – to get them on a bus for 10 days and fall in love with tech companies and understand the profile of technology as an investment class,” he says.
“There is a gap in the New Zealand market around technology investments. We believe it [the Māori Venture Capital fund] will be about $90 million with $30 million from Māori, $30 million from government and $30 million from overseas.”
Soutar was somewhat coy on how much funding has been allocated to get T3W up and running, noting that he has only just seconded out of NZTE to Callaghan Investment to lead the formation of the programme, with funding so far limited to people and time from existing resources within NZ Inc.