500 NZ SaaS companies
You may be surprised to learn (we were) that there are more than 500 exporting B-to-B software-as-a-service companies in New Zealand. That’s according to Serge van Dam, who runs the informal industry group Kiss my SaaS and who has a collated a list of them.
Van Dam is a pioneer of the New Zealand SaaS community, having been part of M-Com, a mobile banking and payments company that was sold to Fiserv in 2011. Since that time he’s been an active investor in a raft of early-stage SaaS companies, including Tradify, AskNicely, and Uneeq (to name just three), and he was named New Zealand Arch Angel in 2020.
He spends 80% of his time working with the companies he’s invested in, and 20% of the time on helping and promoting the SaaS ecosystem in Aotearoa.
Why the latter? “For a variety of reasons. One is because it has a massive opportunity. Software is eating the world and a lot of NZ software is doing a lot of the eating. The second thing is we need to re-gear our economy away from what I think are ultimately dead-end things, like tourism and animal agriculture. If we are going to have, in a 50-year time frame, a serious economy it’s got to be based on ideas and intellectual property,” he says.
There is no formal New Zealand SaaS industry association because the companies all sell different things to different markets. “If you’re selling software to accountants in Australia, why do you want to be in the same room as someone who is selling software to mechanics in the Midwest of the US?”
SaaS companies do have a couple of things in common, though. One is they want to ensure New Zealand is an easy place in which to do business. The other is the availability of talent. Yes, the perennial skills issue strikes again.
With the borders closed due to COVID-19, SaaS companies are finding it tough to get good talent. Van Dam says most are dependent on immigration, with migrant workers responsible for up to a third of their staff count.
He questions why tech skills aren’t being seen as more valuable when decisions are made about who comes into the country. “It is right now holding almost every one of the companies I’m involved in back. I don’t think there is an easy resolution, but I also don’t see it prioritised. Especially when you read something like 400 fishermen are in MIQ, doing a really low-value job that plunders our oceans, versus high-value [skills] with people that pay ongoing tax in high value businesses not being allowed in.”
Three categories of SaaS
Skills shortages are biting SaaS companies because the pandemic is accelerating demand for their products. Van Dam says almost every company he is involved in “grew substantially” in 2020 and is continuing to do so in 2021. For example, Mobi2go, which enabled digital ordering at fast-food restaurants grew the team from 25 to 55 last year and is on track to double its staff count in 2021.
Van Dam says the rise is due to the necessity for online alternatives (restaurants can’t open in lockdowns) and a greater understanding of the possibilities of technology (remote working is entirely doable for a large percentage of the workforce). In addition, the anticipation of a recession has focussed many industries on the bottom line, so areas such as automation and smarter ways of working can assist with cost-cutting.
There are, according to Van Dam, three categories of SaaS in New Zealand:
- Companies that have found niche areas that were previously not being served. For example, Auror, which uses AI to help retailers detect shoplifting.
- Companies involved in deep techn that solves difficult problems. For example, Montoux, which is using hardcore mathematics to create actuarial automation for the health and life insurance industries.
- Companies that have momentum by doing a great job “nailing predictable market opportunities”. For example, Tradify, which provides management software specifically for tradespeople.
Government agency seeks to define broadband
What is a reasonable broadband service? Is it 3Mbps download, or 20Mbps? And how does that translate into what a user can actually do?
So many questions, but Crown Infrastructure Partners (CIP), the government agency responsible for the Rural Broadband Initiative, has helpfully provided a minimum of what an user can expect to do:
- Stream a high-definition video onto a large-screen TV.
- Participate in a video conference on a computer monitor.
- Simultaneously browse the internet and download emails.
- Receive data at 20Mbps outside the ‘busy hour’.
The definition is provided in CIP’s request for information to network operators for data on their coverage and capacity. The government has ponied up another $46 million to improve broadband capacity in the provinces (with the potential for a further $60 million), in what it’s calling the Broadband Capacity Programme (BCP). It appears that during the Level 4 lockdown last year congested networks prevented some customers from getting connected.
Something called the Infrastructure Reference Group is responsible for handing out the funds to network providers, but it wants to ensure it doesn’t encourage duplication. “We do not want to provide grant funding to a network operator that would enable that network operator to increase capacity in an area where sufficient capacity is already being provided or will be provided in the medium terms by a current network operator,” the IRG said.