For New Zealanders whose lives have been dominated for 18 months by Covid-19, Dunedin’s renaissance may not have registered on their radar. Yet quietly the southern city has sprouted some of NZ’s fastest-growing hi-tech businesses.
Once a city that was home to some of the country’s biggest companies, Dunedin had several decades during which many of its brightest and best migrated north and its life appeared to revolve, as the rest of NZ saw it, about its university (and the Highlanders).
Whereas once it had been the country’s financial capital, home to the head offices of many of the NZ’s leading companies, it ceded that title first to Wellington and then to Auckland.
But almost mysteriously, it has found a new life and suddenly the rest of NZ has woken to the new era which is enveloping the city. It is somewhat like the gold rush which promoted it to be at the front edge of NZ’s first wave of prosperity more than 150 years ago.
Just last week global investment firm Kohlberg Kravis Roberts announced it is acquiring a majority stake in Dunedin-based tech company Education Perfect, in a deal that values the enterprise at $435m.
A month previously cloud software firm Timely was sold for a sum reported to have topped $100m. Timely offers cloud software services for appointment management, often used by those in the beauty or fitness industries.
The KKR deal steps up a notch from that. The world-renowned firm is taking a majority stake in Education Perfect, alongside Australian-based private equity firm Five V Capital which invested into the company in 2017 with Malaysian group Mulpha Credit.
The equity investors bought the then majority stake from co-founders Craig and Shane Smith, who launched the concept nearly 20 years ago as a vocabulary tool to help pupils come to grips with modern language learning.
The company now has offices in Australia, NZ, Singapore and Dubai, and is being used by 1 million pupils and 50,000 teachers in 3000 schools across 50 countries.
According to Deloitte Fast50 calculations, the company recorded a 90% revenue growth path from 2016 to 2018 to about $21m. KKR is investing into Education Perfect from its Global Impact Fund, which is focused on investing in market-leading companies whose business contributes towards the UN Sustainable Development Goals.
KKR says it will leverage the firm’s experience in investing in technology and education companies to support Education Perfect and the management team’s vision to grow into a major edtech business globally, with a mission to improve education efficacy and outcomes.
Education Perfect’s CEO, Alex Burke, said the investment by KKR’s global impact fund validated the company.
“Covid-19 has put education technology in the spotlight, and our amazing team and world-class data, technology and content have been the foundation of our success”.
The KKR investment marks a key moment in the company’s journey and sets EP up for its next phase of global growth, he said.
Other significant Dunedin-based tech companies have won their place in the world in some surprising niches. ADInstruments, for example, is one of the world’s leading creators of DAQ software and hardware, which is used for a wide range of university research applications.
Among other successful tech companies include CodeLingo, which automatically scans and corrects coding errors.
One company said to have found great success is Pocketsmith, providing software for personal finances that is now used across 191 countries worldwide.
Dunedin is also where Sir Ian Taylor started his firm Animation Research, which specialises in computer animation.
EnergyLink , too, has become very successful with its technology being used by most of the companies in the energy industry.
Many tech startups have found a home in the Warehouse Precinct whose owners are planning another development with what they call The Investors Lab, a workshop for prototyping to be used by gadget and hardware startups.
The success of the tech companies stands alongside other Dunedin-based companies like A2 Milk and Pacific Edge which emerged from research by academics in the city.
Pacific Edge is one of NZ’s remarkable stories, a company that has turned the outcome of years of research by Professor Parry Guilford into a commercial success.
Guilford is both co-founder of Pacific Edge and its principal scientific officer. He discovered and developed the patented Cxbladder test for cancer which has been adopted by some of the biggest healthcare groups in the US, including United Healthcare and Kaiser Permanente. The consequence is that Pacific Edge’s shareprice has climbed 347% over the past year and the company is now capitalised at $895m.
Only a few weeks ago the company told the market Kaiser Permanente is about to begin commercial use of a second Cxbladder product, Cxbladder Triage, from July.
In June 2020, Kaiser Permanente approved the commercial use of Cxbladder products by its urologists for patients being evaluated and managed for bladder cancer. Kaiser Permanente commenced its commercial use with Cxbladder Monitor for patients being monitored for the recurrence of bladder and urothelial cancer.
The Cxbladder Triage is to be used for patients presenting with haematuria (blood in the urine and a key indicator of bladder cancer).
Kaiser Permanente will start its commercial use of Cxbladder Triage in a single clinic comprising six urologists. This initial clinic is also using Cxbladder Monitor. Kaiser Permanente plans to progressively roll out Cxbladder Triage, alongside Cxbladder Monitor, across their network.
No wonder Professor Guilford is recognised as a world-leading cancer geneticist. His work with both a fatal form of inherited stomach cancer, and bladder cancer, has had a profound effect on saving lives. It won him the Distinguished Research Medal, the University of Otago’s highest research honour.
Previously his work had been recognised by the award of the top Health Research Council of New Zealand medal, the Beaven Medal, for his contribution to translational research, and the Royal Society of New Zealand’s Sir Charles Hercus Medal for biomedical sciences.
Point of Order, after sampling the vibrancy of Dunedin’s tech and science sectors, is convinced fresh chapters will be added in the next few years in what could be another (metaphorical) gold rush.