Tech firms need to develop 'AQ', urges founder of Kiwi startup Centrapay
- 24 November, 2020 10:40
Bruce Jarvis (Callaghan Innovation)
Callaghan Innovation is finding many New Zealand technology startups are seizing the opportunities presented by COVID-19 disruption.
The pandemic has created a "once-in-a-generation opportunity" for the digital and software services sector, with many firms buoyant about the future and reporting record growth, the innovation agency said today.
“We went into COVID-19 with a strong, innovative digital sector competing well on the world stage, but the pandemic presented major challenges - especially in funding terms," said Bruce Jarvis, group manager of digital at Callaghan Innovation.
"On the flipside, COVID-19 supercharged global demand for digital services and many of our most innovative companies responded rapidly."
Alternative payment platform Centrapay, for instance, was born in April out of the first lockdown and has doubled its team in the last three weeks.
Centrapay is on track to do $1 million in revenue in its first year and this month released a disruptive payment technology platform with zero transaction fees for processing electronic transactions; either peer to peer between consumers or on merchants existing EFTPOS terminals.
Co-founder and CEO Jerome Faury said lockdown really forced the company to review an earlier business model.
“Covid-19 forced us to look at how we move from being ‘nice-to-have' to an essential offering," Faury said.
"Transactions fees are the third largest cost for most retailers. We remove these transaction fees, allowing retailers and people to transfer value directly, using the digital wallet on their phones."
Faury said that the key business intelligence required for the 2020s was "AQ" – adaptability quotient - especially in the digital sector.
This is an area where New Zealanders absolutely excelled, he said
“Kiwis believe they can solve any problem. Things get thrown at us and we adapt, quickly. It bodes extremely well at a time when entrepreneurs are the business leaders of this time.”
Callaghan's Jarvis said uptake of the agency's COVID-19 R&D Loan underlined the boom in demand for digital services, with many digital businesses needing support to speed up their activities and seize new opportunities.
399 R&D loans have been approved so far, totaling $131.7 million, with $120.2 million of that paid out. Forty per cent (162 loans) were for innovation in the digital sector, averaging around $337,000 per loan.
“It’s encouraging to see them raising investment, hiring and growing," he said. "We expect to see some great success stories out of this sector at a time when our economy is hurting.”
Kiwa Digital, an award-winning media tech company, is forecasting double-digit sales growth through the impact of COVID-19 on the media industry.
The company's VoiceQ software, which automates dialogue replacement in the post-production stage of film and TV shows, is widely used for major studios and video streaming companies like Netflix, Disney, Amazon Prime and Hulu.
Voice-Q has been in hot demand for the dubbing of foreign-language films and TV series this year as streaming services have seen huge demand since COVID-19 hit.
Kiwa Digital's technology helped localise the year's number one drama series, Money Heist, number one documentary, The Last Dance, and four of the current top ten Netflix Originals.
“Our digital technology is world-class and well respected globally,” said CEO Steven Renata.
“For us, COVID-19 simply sped up a digital trend which was already happening. Where before COVID big businesses were slowly considering using our software, they are now seeing it as a must.”
Jarvis says there was real excitement amongst the 300 founders and CEOs attending this year’s Southern SaaS, a Callaghan Innovation organised virtual conference for software-as-a-service businesses.
SaaS businesses are Callaghan Innovation’s fastest-growing customer base, with the agency assisting more than 700 companies across its suite of R&D, commercialisation and innovation services.
“Globally, the sector is very competitive and fast-moving, so our support aims to build the capability and networks local SaaS businesses need for high growth,” Jarvis said.
Export sales from digital service companies between 2017 to 2019 grew forty-seven per cent and that was good for the whole of New Zealand, he said.