Pacific Fibre attracts investment from Facebook billionaire
Pacific Fibre -- the company set up to build a fibre optic cable between New Zealand, Australia and the United States -- has attracted investment from PayPal co-founder Peter Thiel.
Trade Me founder Sam Morgan, The Warehouse founder Sir Stephen Tindall and Xero founder Rod Drury are among the backers of Pacific Fibre. Other founders include former Vodafone chief marketing officer Mark Rushworth, who is chief executive.
Today the company said it has raised over $5.5 million in a fourth round of financing that was supported by existing external investors and also attracted Mr Thiel's New Zealand investment vehicle Valar Ventures LP. Valar Ventures invested $4m in New Zealand accounting software company Xero last year. Mr Thiel was also an early investor in Facebook.
"We very happy to have Peter and the team at Valar Ventures on board," said Mr Rushworth.
"Their west coast networks and Wall Street experience will be a great help to us as we enter the major financing phase, and their commitment to helping technology companies strongly aligns with our founding purpose."
Pacific Fibre's statement quoted Mr Thiel saying Pacific Fibre offered a strong proposition to investors.
Pacific Fibre said last year that it planned to build a 13,600km cable that will land in Sydney, Auckland and Los Angeles and Pacnet has joined the project.
The estimated cost of the project has fallen to $US400 ($NZ526) million from an original $US900m figure.
The new cable is expected to be built using a partnership model that allowed Pacnet and Pacific Fibre to each own and operate a fibre pair on the new cable system.
Pacific Fibre also said today that New Zealand Trade and Enterprise's strategic investment fund will provide up to $250,000 in matched funding for feasibility studies when the project has good prospects of generating significant economic benefit for New Zealand.
The cable will compete with the Southern Cross Cable Network, which links Australia, New Zealand and Hawaii to the US. Southern Cross is part owned by Telecom.