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Yet another NZ tech company sold offshore as UK outfit buys eBus

Auckland-founded eBus Media Network has been sold to London-based IMD.

Both companies specialise in the digital delivery of video for the advertising industry. They use cloud computing technologies to distribute commercials quickly to TV broadcasters, plus web and mobile channels.

eBus shareholders include its founders, Sam Morgan, Movac’s Philip McCaw and The Icehouse’s Ice Angels seed investment fund.

Terms of the deal are confidential, but Icehouse CEO Andy Hamilton says his organisation’s Ice Angels seed investment fund made a positive return.

The sale raises (yet again) the awkward issue of why so many NZ tech companies – such as Navman, Right Hemisphere, Next Window, Endace, Sonar6, EMS-Cortex and Zeacom – end up in the hands of foreign owners, many after getting a helping hand from the Crown.

“It is what it is,” Mr Hamilton says.

eBus began life in 2005 as one of the companies under Icehouse’s business incubator programme in Auckland. The driving force behind it was CEO Carmine Marsiello, who came to New Zealand in 2004 from his native Italy, where he had already built then sold two multimedia production companies.

In operational terms, the company has already become a lot less Kiwi. Mr Maisello and eBus’ development team moved to Singapore in 2009, bar one staffer who remained in Auckland.

It was always the plan to get as close to the market as possible, Mr Hamilton says. Singapore was literally at the centre of the action.

eBus investors knew the US and European digital ad delivery markets were already spoken for, but that there was an opportunity in Asia and Australia.

If things took off, the plan was to buy a competitor, The Icehouse boss revealed. If not, "we knew people would come hunting". And hunt and buy they did.

The sale has brought money back to New Zealand, Mr Hamilton says.

The process of growing then selling eBus has also yielded an important contact, The Icehouse boss says: Singapore investor Jayesh Parekh, whom he hopes will back other NZ startups.

More by Chris Keall

Comments and questions

Perhaps your reporter should have asked whether eBus ever approached a broker about floating on the NZX and if so shame the broker by naming them. There are brokers that are willing to raise capital and float tech companies, and show the old adage that you get the best price from a trade sale to be not always true.

A question: has there ever been a company progress from the Icehouse to listing on the NZX?

eBus is far far too small for listing, and that was never in the company's strategy, unless its growth was so massive that significant sums were required. That growth has not come to-date. Icehouse has not had any companies list, work in progress and lets hope we don't have another 11 years without one!

More taking of the p*ss by chaps in this industry who forever harp on about being the "good guys". If you are going to get taxpayer funding and sell your business good on you, but pay the help back. Students have to with their loans.

That they are sold offshore rubs salt further into the wound, but the primary question should be asked why the funding is dished out in the first place. Want to be considered an entrepreneur stop dipping into PAYE taxpayer cash of those working for wages and put your own up.

Cactus is right.
Indeed all government grants and other help should be tracked versus tax received from that company. Publicly.

With no capital gains tax, and probably little if any income tax paid on the way, the value here has disappeared for NZ taxpayers. In that case we should have grant clauses that claw back a percentage of the exit.

I agree that all government grants shoud be repaid in the event of a sale, especially if the sale is to an offshore owner. Surely this can easily be made a condition iof the grants. As someone else said, if the co won't accept this they don't need a grant!

Picking up the question of why so many companies are sold in this way and at a relativley early stage, I suspect that in many cases the guys driving the business get ground down by the physical and emotional stresses of traveling around the world and the extended working hours needed to compensate for the time zone issues. When a decent offer appears they are happy to take it and get off the treadmill. Ian McCrae is the standout exception to this but I suspect he doen't do as many miles now as he used to.

There's no way of knowing if US tech entrepreneurs would do as well as they do without a huge market on their doorsteps, but there is no doubt it is a huge advantage for them and disadvantage for our guys.