Auckland Company Signs Deal With Us Investors
Auckland Company Signs Deal With Us Investors; Significant Number Of New Jobs To Be Created
An overnight photo restoration service is soon to be established for North Americans, creating jobs here in New Zealand where the digital processing will take place.
A group of American investors has signed an agreement with Auckland-based Photopages Global Ltd (PGL) to launch PGL’s 24-hour digital photo restoration service in the United States, Canada and later Europe.
The American consortium is led by US investor Ed Bernstein of Creekside LLC in San Francisco and the new partnership is expected to create 100+ jobs for New Zealanders, and boost our growing reputation for producing world-leading technology.
Under the trademark Photopages, and using unique digital technology developed in New Zealand, PGL offers an overnight service to restore damaged, torn, worn or faded photos to a high standard at an affordable price. The images are printed on photographic paper with 100% UV protection, which sets the product well ahead of most others on the market.
The American investors were attracted as a result of work by Trade New Zealand and have used the New Zealand law firm Chapman Tripp to assist them with finalising the agreement.
Trade New Zealand has been working with PGL for more than two years, helping it to successfully establish Photopages in the United Kingdom and Australia. Last November the organisation brought US journalist Hal Josephson to New Zealand to write a series of articles on New Zealand IT capability. Josephson was so impressed with the companies he saw, including PGL, that he introduced Trade New Zealand’s investment promotion agency, Investment New Zealand, to Ed Bernstein and the other investors.
The investors were brought to New Zealand earlier this year, under the Visiting Investor Programme, and were hosted by Investment New Zealand IT sector specialist Paul Gestro.
The trio visited 22 of New Zealand’s leading technology companies, including Photopages Global Ltd, with a view to forming strategic partnerships.
Although the initial meeting with PGL in February lasted just 30 minutes, the American investors immediately saw an opportunity to enter the US market with Photopages and negotiations began shortly afterwards.
As a result, a distribution network for Photopages is to be established throughout the United States and Canada with expansion into Europe expected further down the track. Photos will be scanned at source and sent via the Internet to New Zealand for restoration. The service will still be fast – what it takes many photo restorers four to five hours can be done with PGL’s technology in 10 to 20 minutes.
The technology behind Photopages was developed by Ian Handricks of PGL, who says the company will enjoy phenomenal growth over the next three years as the global service is established.
PGL currently employs four people at its Auckland processing facility and Ian Handricks says a significant number of new staff will be needed over the next 12 months, with additional jobs created as a result of the introduction of Europe and the continuing development of the North American market.
The volume of work handled by PGL is expected to grow from the 25-30 photos being restored each day at the moment to thousands every 24 hours.
Last week the company and its new American investors signed a 5-year agreement, with a 10-year renewal provision, and the possibility that the business could be listed on NASDAQ after two years.
Ed Bernstein says PGL provides exactly what he was looking for in New Zealand - smart technology with consumer applications.
“Photopages combines very strong technology with very innovative processes. The American market is ripe for this product but no one in the US has the tools to do the job as quickly and efficiently as PGL. That, combined with our marketing and distribution skills, makes this a very exciting venture,” Ed Bernstein says.
He says US investors are becoming aware of the great talent that exists in New Zealand, both in terms of technical ingenuity and a high quality pool of labour.
“The big challenge has been New Zealand’s distance. We were looking for a product or service that didn’t have to be put on a boat and could be transmitted electronically – Photopages exactly fits the bill,” Ed Bernstein says.
Creekside’s New Zealand lawyer, US-trained Michael McNeil of Chapman Tripp in Wellington, says the deal structure plays to the strength of both parties.
“Combining Kiwi innovation with US capital and market access makes a formidable combination. Each player brings what they do best and I’m confident we’ll see more deals with this structure coming in the future,” Michael McNeil says.
Ed Bernstein agrees, adding that his firm is ‘actively looking for opportunities to follow this model’.
Both Ed Bernstein and Ian Handricks say their new venture has strong potential to unlock opportunities for other high-performing New Zealand technology companies.
“The success we have had provides a model for other New Zealand companies with innovative technology,” Ian Handricks says. “You have to believe in your product or service, don’t give up, be prepared to take risks and make sure what you produce is marketable and workable – there’s no point in whiz bang technology that looks great but no one knows what to do with it.”
Ian Handricks says it also makes sense for businesses to use the services that Trade New Zealand and Investment New Zealand offer.
He says Trade New Zealand’s Trade Commissioner Technology for Australia, Catherine Dunkerley, was pivotal in securing a successful distribution arrangement for Photopages through the David Jones network of retail stores across the Tasman. In other markets, Trade New Zealand has carried out research, held launches and both Trade and Investment New Zealand have introduced PGL to distributors.
“The time they spent with us and the support and encouragement they gave has been crucial,” Ian Handricks says.
Trade New Zealand Account Manager Dominic Cavanagh has been working with Photopages Global Ltd for the past few years. He says the software which underpins the Photopages service is ‘incredibly innovative and in a league of its own’.
“The service itself will have huge consumer appeal. We are thrilled that they now have the opportunity to reach a very wide market,” Dominic Cavanagh says.
Investment New Zealand IT Investment Manager Paul Gestro says the Photopages expansion shows the value of the Trade New Zealand network offshore and inward investor programme, which combine to find investors, bring them to New Zealand and show them our technical capability.
“We’re delighted to see such positive results from our Visiting Investor Programme. The beauty of this deal is that the intellectual property and on-going software development all remains in New Zealand. This is a great example for other New Zealand companies which have technology that can work seamlessly across the oceans,” Paul Gestro says.
He describes the increase in jobs and export earnings for this country from the PGL venture offshore as ‘staggering’.
“We endeavour to find strategic partners around the world for New Zealand companies and this is a perfect example of a global partner that can not only provide capital but the right distribution channels,” Paul Gestro says.
“The US investors can build a business in the USA with their expert knowledge of the market, allowing the New Zealand company to grow rapidly and focus on managing its business here.”
Photopages Global Ltd was formed in 1992, initially as a division of New Zealand Contact Lens Supplies Limited, one of the world’s longest surviving and New Zealand’s foremost contact lens laboratory.
PGL has been at the leading edge of work with
high technology computer products for the last 10 years, and
has been particularly instrumental in the development of
photo-digital imaging in New Zealand.