Endeavour Capital invests NZ$3 million
21 April 2005
Endeavour Capital invests NZ$3 million in
Beca start-up Derceto following sales in USA of world leading energy efficiency technology Derceto to leverage Endeavour Capital’s North American expertise and target US$250 million market
AUCKLAND, 21 April, 2005 – Endeavour Capital, one of New Zealand’s leading venture capital firms, today announced a NZ$3 million investment in software innovator Derceto, a subsidiary of Beca, the largest New Zealand owned professional services group. Initially stimulated by New Zealand’s deregulated electricity market, Derceto now develops energy efficiency software for large water distribution companies in the United States and Australia, optimising water pumping schedules and creating significant savings in power.
The US$104 billion water utility market in the United States accounts for 75 billion kilowatt hours per annum or 3% of the total electricity consumption in that country. In 2004 Derceto began targeting the 210 largest utilities, each serving more than 200,000 customers, where sales opportunities alone total more than US$250 million. In the last eight months Derceto’s American client base has grown to more than fifteen utilities across the United States.
The NZ$3 million investment from the Endeavour i-Cap fund, managed by Endeavour Capital under the Government licenced Venture Investment Fund scheme (NZ VIF), will be made in two tranches over 12 months culminating in a shareholding of approximately 40% in Derceto.
Beca Executive Chairman, Gavin Cormack, said the Endeavour Capital investment will enable Derceto to reach its full potential as a stand-alone commercial entity. “Derceto has successfully transformed innovative technology from within the Beca Group into a unique product with a huge international market, especially among the more than 200 major water utility companies in North America” he said.
Mr Cormack said that Endeavour Capital’s proven success and extensive business network in the United States made the firm a natural fit for Derceto. “In Neville Jordan and Dr Dennis Row, Endeavour Capital has two outstanding New Zealand entrepreneurs with proven commercial success in the North American market.”
Neville Jordan, the founder and Chairman of Endeavour Capital, became the first New Zealander to successfully list a local company, MAS Technology, on NASDAQ. Endeavour Capital partner Dr Dennis Row, who becomes a Derceto director, has also achieved significant business success in the United States. He spent more than two decades in California where he was founding partner and CEO of Rebis Inc, and Senior Vice President of Cyra Technologies.
Endeavour Capital’s Neville Jordan, said he had known Beca founder Sir Ron Carter as well as Gavin Cormack for 20 years. “I admire the outstanding work started by Sir Ron in building the Beca Group into a world class engineering consultancy business with extensive success in many countries,” he said. “The innovative New Zealand technology that Beca has spun off into Derceto signals a bold new step for the group. We look forward to committing our resources, both financial and commercial, to help grow Derceto into the dominant international player within its niche industry.”
Derceto director Bryce Whitcher said the company had been faced with a raft of financing options including interest from overseas venture capital firms. “We wanted external funding to take the business to the next level and, given our New Zealand heritage, we are proud that a locally based investor such as Endeavour Capital has come on board as our partner,” he said. “In addition, three of the principal executives in Endeavour Capital are professional engineers which means they understand both the Derceto technology and the target market, making Endeavour Capital an ideal mentor and partner.”
Endeavour Capital partner Dennis Row said he saw huge opportunities in developing the company into a global innovation leader in its field. “Derceto is a truly unique product developed in New Zealand for a very specific yet commercially significant world market, the water distribution industry. In the United States alone, where Derceto already has traction, the market opportunities are immense. This makes Derceto a compelling investment for Endeavour Capital,” said Dr Row.
Derceto’s success in the US market to date includes the implementation of its software by California based East Bay Municipal Utility District, a recognised innovator among North American utilities. East Bay MUD, which service 1.2 million customers in and around Oakland, estimate that their annual energy savings will reach US$500,000, based on the first eight months of Derceto operation.
For further information please contact:
Simon Walter, GM Marketing, Beca
DDI: 09 300 9116, Mob: 021 770 962, email@example.com
Simon Hendery, Bullet PR
Tel: 021 503-181, email: firstname.lastname@example.org
Notes to editors:
Auckland-based Derceto is a software company focussed on delivering award winning energy efficiency software for water and wastewater utilities. The company grew out of Beca’s development of software designed to take advantage of New Zealand’s deregulated electricity market by optimizing territorial local authorities’ water pumping schedules, allowing significant power cost savings. Derceto emerged out of the Beca Group as an optimisation software company in 2003. US subsidiary, Derceto Inc. headquartered in San Francisco, provides sales and support services to clients in the USA and Canada. For more information on Derceto visit: www.derceto.com
About Beca Group
Established in 1918, Beca Group is the largest New Zealand-owned professional services company, employing over 1500 staff in 13 countries and with projects in over 63 countries.
Beca works in five key sectors: industry, building, infrastructure, environmental and resource management, and delivers engineering, planning, project management, applied technologies and valuation services.
Headquartered in Auckland, Beca operates from three market hubs: New Zealand, Australia and Singapore. The employee-owned practice designs and supervises projects with a total value of over $N2.4 billion annually.
Recent projects include terminal expansion at the Wellington and Auckland international airports, Britomart Transport Centre in Auckland, Westpac Stadium in Wellington, Sky Tower and Casino in Auckland, Manukau Wastewater Treatment Plant in Mangere, Auckland City Hospital and the 338m Macau Tower in China.
For more information on Beca Group visit: www.beca.com
About Endeavour Capital
Endeavour Capital was founded by successful businessman Neville Jordan as a result of his desire to put something back into the New Zealand economy and to help ensure that small companies based on science and technology had access to vital venture capital funding.
As a licensed manager under the New Zealand government’s Venture Investment Fund scheme, Endeavour has raised more than $40 million of investment funding. This is presently being invested in exciting New Zealand-based companies working on world-class developments in biotechnology, ICT, the creative industries, and advanced manufacturing.