Seeby’s $10m Net24 play
Seeby Woodhouse, who has up until now dabbled with comeback, is now back in the ISP game boots and all.
In 2007, Seeby sold Orcon to state-owned Kordia for $23.4 million, pocketing $19.44 million himself.
Since, there have been some serious initiatives such as his GreenCarbon consultancy. And others more in the playboy vein, such as joining the New Zealand Segway polo team, endless social page appearances and opening his $8 million Castor Bay cliff top home to house Master Chef and Top Model contestants.
In 2010, a restraint of trade clause with Orcon lifted, and Seeby immediately got back into the ISP game, founding Voyager Internet – resurrecting a brand name from the early days of the New Zealand internet scene (at one point in the mid 1990s it rivalled Telecom Xtra in customer numbers, and its part-time employees included an 18-year-old Mr Woodhouse – then studying electrical engineering at the University of Auckland).
At the time, Voyager was essentially Seeby plus a PA.
He told NBR ONLINE he would grow the business by chequebook, and that’s what he’s done.
Over the past 18 months, the entrepreneur has quietly bulked up Voyager with the acquisition of Affordable Domains, Digital Genus (an IT integrator), and IVP (a VoIP provider).
Now he’s just done a deal, due to close May 14, to buy 100% of Net24, founded by brothers Nikolai and Michael Schupbach (who will join Voyager’s management team).
Net24’s core business is centered on a Christchurch data centre. The Orcon founder sees growth potential as the UFB fuels cloud computing and other hosted services.
Net24’s business also includes web address companies 1st Domains, Register Direct, Expired Domains and IronStor, an online backup service.
$10 million turnover
While shy on specifics, Seeby says Net24 is “very profitable.”
He told NBR ONLINE it will boost his total group annual turnover (including Voyager) to $7 million.
He hopes to raise that to $10 million by the end of this year - "assuming no more acquistions."
The combined Voyager business now includes 75,000 domain names managed, 25,000 email accounts provided, 10,000 websites hosted, 1000 virtual machine or "cloud servers" deployed, and several hundred VDSL, Fibre and UFB services for a total of 27,000 customers.
Seeby styles it as a high quality, boutique ISP service, with enough grunt to offer the likes of cloud services but "small enough to care".
In Orcon's early days - especially when many were on dial-up accounts - owning an ISP was a license to print money (it did help that Seeby was deft at navigating the arcane world of wholesale pricing and the associated, never-ending regulatory scrapping).
Am insider told NBR ONLINE that in the mid-2000s, Orcon made a profit margin of around 30% on revenue in the region of $8 million to $10 million (a work-hard/play-hard ethic saw the Orcon crew at Crow Bar many nights; Seeby bought it as a side project, selling it in 2007).
Today, it's a very different landscape. As a Kordia division, Orcon had $73.4 million revenue in 2011. A profit/loss statement wasn't released for the ISP, but NBR understands that in dollar terms in was much different from when Orcon's revenue was a tenth what it is today.
There's been lots of industry change and consolidation. Some ISPs have complained to NBR that crunched copper pricing, and the tightly regulated UFB, give them little room for manoeuvre.
Seeby brushes aside such concerns.
"We're doing great In the small to medium business market at the moment," he says.
There are certainly challenges ahead. Many ISPs are wondering, for example, what will happen when Chorus stops its early-stage free connection promotion for the UFB. Can fibre connection costs that could run into thousands be passed on to business or residential customers?
"Everyone is providing crap service and it's fun to be back to what I'm good at - which is exceeding customer expectations at a particular price point," Seeby says.
More acquistions on the way?
Is Seeby's chequebook still out?
"I'll buy anything that comes up that's a great company, but obviously I have to balance that with making sure I can integrate all the pieces and not end up with a mess," Seeby says.
"I'm quite happy with what I have so far, but also keen to grow."
We don’t hear so much these days about another Seeby project – consultancy Green Carbon (its business manager is now running Seeby Properties).
How’s that going?
“Green Carbon ticks along,” says Seeby.
“But I guess telecommunications is what I was born for.”