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Tech company ikeGPS signals IPO

Tech company ikeGPS Group has confirmed it has plans to raise up to $25 million in an IPO and listing on the NZX main board.

Forsyth Barr and Deutsche Craigs have been appointed joint lead managers of the offer.

The Wellington-based firm has developed tools for businesses such as electricity utilities to photograph, measure and GPS locate objects such as telegraph poles.

Current shareholders include Jenny Morel's No8 Ventures, the government-backed New Zealand Venture Investment Fund and US conglomerate General Electric.

The company came onto NBR’s radar in December 2013 with a successful campaign on crowd-funding site Kickstarter.com.

The company raised a small amount of money for “Spike”, a smartphone accessory that uses a camera, laser and compass to take accurate 3D measurements of any object you photograph. The measurements can be geotagged and instantly shared.

This morning ikeGPS confirmed it was stepping up to the big league.

“We are considering raising up to $25 million of new capital to accelerate ike’s growth, particularly in the United States," ike chief executive Glenn Milnes says.

“The net proceeds of the proposed offer would be used to recruit additional sales and marketing staff, develop new products and extensions of existing products and generally meet the costs associated with ike’s growth plans.”

In conjunction with the issue of new shares, there will be a sale of up to $6 million of existing shares.

The proposed offer of ordinary shares to the New Zealand public and selected institutional investors is expected to be announced in late June this year, the company says.

More by Duncan Bridgeman

Comments and questions
7

Without trying to sound negative there just too many tech companies being listed at the moment. They won't all succeed and some will be overpriced from day one which is a recipe for future disaster if they fail to deliver - we will end up with more disasters like the Christchurch based light bulb company.

The NZX and brokers need to be more prudent and spread the listings or there will be a tech bust not long after they all list which won't be good for the companies, investors or more specifically the market

Why don't NZX create a mini NASDAQ here or a separate board for tech companies so if the bust does happen the whole market is not affected. A separate board would also ensure that the listings on the main board are not affected by big swings and roundabouts in the tech listings

Well said.

Agree - to many to quickly. Would be much better if they were spread over a longer period of time.

There is the NZAX but why would anyone list there - it is a graveyard with no liquidity. HOpefully the new (renamed NZAX) NZGX will remedy this, with a lot more options, hopefully some compliance listings of existing established private companies rather than just IPO wanting to raise funds.

Having said that, these guys a minnows so any bust will not effect the index.

I understood that was exactly what they were doing with the retirement of the AX in favour of a simpler listing process for smallcaps. I wonder if t here isn't room for some simple transition process for those that raise money through equity crowd sourcing to such an exchange f or liquidity and credibility?

It will be interesting to see what the 'reduced' listing costs are. Equity crowdfunding will be kicking off soon and those that are successful, will need to give liquidity to shareholders at some point. Will that be through the likes of the NZGX or will the crowdfund providers have to set up their own exchange?

Equity Crowdfunding is being overhyped. A UK group operating since 2010 has raised around NZ$54 m (GBP27m) across 124 projects. So that is something like NZ$12-15m a year. An average of around $400k per deal.

If you adjust the figures for population size then we might be talking $1m a year in the NZ market. I suspect it will be more, but it is not going to be the size that some suspect.

That platform had around 75,000 registered investors (less than $1k invested per person over 3-4 years), one local player is hoping to have 2,000 registered investors.

Note: one crowdfunding platform reports something like 1 in 4 making it through the screening process and then only 1 in 4 raising the capital they are seeking - so that is around 5-6% of all companies interested.

Equity crowd funding may help but it will not be a solution in the short term for most businesses. i hope I am wrong but i don't think I will be.

It would appear someone at NZX about to miss their bonus target for IPO's so a flood

Too many, too fast. Like old days when you could float a brick

Most way too small + will be unable to manage any regulatory requirements.

Most pipelines have water or sewerage, few of oil but none of gold