I do a lot of startup mentoring both in New Zealand and overseas – I don’t have the temperament to focus on one thing and commit to a startup 100% but, in the absence of that focus, it’s super exciting to be involved in a bunch of different startups. I’ve been investing, advising and mentoring for a few years and have had some nice success stories (in particular Connect2Field acquired by US listed company Fleetmatics and Appsecute, eventually acquired by Hewlett-Packard Enterprise.) I’ve also had a good share of failures, with companies entering the colloquially-known “dead pool” and ceasing operations.

Anyway, with my mentor hat on, I’ve been involved in a number of iterations of LightningLab. LightningLab is a product of Wellington’s CreativeHQ, and is a 12-week incubator that gets early-stage startups ready for investment. I’ve been a mentor for the various LightningLab programs to date – in Wellington, Auckland and Christchurch, and have invested in half a dozen of them.

One of my earliest forays, was only a few weeks into the initial LightningLab program. Alongside one of the most respected startup advisers, mentors and general wranglers in the New Zealand ecosystem, Dave Moskovitz, I made a very small investment into Publons. Publons was set up to create a platform to change the way academic peer review happens and was co-founded by Andrew Preston and Daniel Johnston – two very smart, and very focused entrepreneurs.

After the LightningLab program, Publons was successful in raising more funding, and the team got heads-down focusing on executing their opportunity globally.

That culminated (although, I have to say, their journey continues, just my part of it ends) with the announcement last week that academic publishing behemoth Clarivate has acquired Publons to apply what the team is doing to their broader stable of publications.

While the terms of the deal are confidential, I have some general comments about the exit and how it impacts upon our local technology ecosystem.

Some of these comments are, at least in part, a reaction to the general trend towards the public criticising when a company is sold offshore – seeing it as a failure for the local economy. I have a different perspective, for a number of reasons:

The ecosystem needed this

In New Zealand, we have a small, but active group of angel investors. in recent years, however, I have detected a degree of fatigue amongst these investors. Frankly speaking, there have been very few successful exits for New Zealand companies and people were getting a bit anxious about that. The Publons deal will give a much-needed confidence boost to the local ecosystem which is very positive.

Investors can recycle their cash

Looking at the investor list in Publons, and the reality is that few of the people on that list really needed the money. I have every expectation that the vast majority of the funds that those early investors gained will be reinvested into the local ecosystem. One company’s success will generate funding for a whole raft of new companies and that is an incredibly positive thing.

The founders can rinse and repeat

It’s fair to say that Preston and Johnstone are enjoying their pay day – and they deserve it! But the reality is that they are a couple of young guys who, I would imagine, see this as only the first of their startups. They’ve now got fantastic experience, and a fair chunk of cash, to use for their next business. This theme of “rinse and repeat” means that, rather than waiting for a massive payday and sitting back and relaxing with a windfall worth hundreds of millions of dollars, these two have the cash and motivation to do it again – exactly the sort of thing that a budding ecosystem needs.

MyPOV

The Publons deal is, obviously, good for me as an early investor. but with all honesty, I’m excited about this deal because of what it means for the NZ tech ecosystem. Congrats to the team, and in particular to Dave Moskovitz who has been a passionate and committed chairman. Here’s to the next one, lads.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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