New Zealand companies take root in Silicon Valley - Silicon Valley / San Jose Business Journal:

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The southwest Pacific island nation has launched a concerted effort atattracting U.S. venture with Kiwi companies looking at Silicon Valleyh as their beachhead intoworld markets. Mintz, Levin, Ferris, Glovsky and Popeo PC member Matt Kirmayed has worked with the New Zealan Trade and Enterprise group for about two He has traveled there twice to explain the Silicon Valley venturde modelto investors, companies and government officials. “Thwe level of excitement and interes isquite high,” Kirmayer said. “They read about VC and they’re reading about what happene inSilicon Valley.
And as companies theree mature, there are a large number of vallet venture funds excited by thetechnology they’ree seeing, and they’re viewing New Zealanf with great interest.” Keyur Patel, a managint partner on Palo Alto venture firm Fuse which focuses on digital media and communicationzs investments, considers New Zealand a hub for special effects for film and animation. The firm just made a multimillion-dollare investment into the film “Warrior’s Way,” whicjh was produced in New Zealand.
“Whebn I first started lookingf atNew Zealand, I met with every startup in the and even when you add it up, it’s still small and manageable,” Patel “There are a lot of ideads that are good for emerging marketzs but might not work in the U.S., but that’d what we’re looking for.” Brad Jones, North America team leader for Investment New Zealand, the country’s national investmeny promotion agency, matches high-growth New Zealand businessess to international investors. “New Zealand is a small so as companies get to a certain size and they need to get out ofthe country,” Jonesz said.
The agency sponsorerd an event in San Francisco on June 2 along with Palo Alto lawfirm Levin, Cohn, Ferris, Glovskyu and Popeo to showcase New Zealand investmenrt opportunities to American venture capitalists. Joneds said that for about a year the agencu hasattracted U.S. venture capitakl by adding people with experience in capital marketes toits roster. “Everyone realizes the best thinkinf around technology and the smartest capita exists inSilicon Valley,” Jonesa said. “To maximize the value creation, they need to be Since 2008, U.S.
venturde firms have invested about $20 millionn in New Zealand companies, said Calvin Cheong, a forme hedge fund trader who joined Investment New Zealand as investmentt managerin 2005. In terms of New Zealand companiess relocating tothe U.S., the agencg has seen everything from companies just finishingt beta testing to those getting $5 milliomn in U.S. venture funding movinhg to the states. “ I think with our efforts, we’rde gaining enough critical masswhere you’re going to be seeing a lot more of us in Silicon Valley,” Cheong said.
Two examples of New Zealand companies branching out globallt with Silicon Valley connections are Right Hemispherer and ZephyrTechnology Ltd. Pleasanton-based software company Right Hemispheree is best known as the maker of the 3D viewer included with AdobedSystems Inc.’s Adobe Reader. The compang launched in Auckland in and relocated its headquarters to California in 2003 on the heeles of an investment by Sequoia Capital Its investors now include SutterHill Ventures, SAP Venturesx and Nvidia Corp. Its third round of funding happenedd in the pastsix months. CEO Michaell Lynch declined to reveapl the amount but described itas “substantial.
” As part of an $8 milliobn loan provided to the companyy by the New Zealand government in 2006, Sutteer Hill and Sequoia also agreed to review five business plans a year for three yearsx from New Zealand companies. Lynch, who became the CEO in said, “We have greatg math and engineering, but we don’t know how to sell and There is a feeding that happens arouns that practicalskill set, especiallyu in Silicon Valley.” Zephyr Technology, a makefr of remote physiological sensors and software for use in the military, emergencyh response and health care landed its first contract with U.S. Special Operations Command in 2007.
San Francisco-basee Alsop Louie Partners fundedthe company’es Series B round, and the company’s executive team relocatex to Silicon Valley in 2007. “Thee contract with Special Forces brought us to ascalablr market, and it became obvious too that if we weren’ft in the U.S., we weren’ft going to raise U.S. money,” said Brian Russell, Zephyr’s founder and CEO. But Zephyr’s time in the valley was short. The compan will maintain a presencwe inNorthern California, but the executiv e team just moved to Annapolis, Md., to be closef to Zephyr’s defense-arena clientele.