When play money is real money

Games company Kaiparasoft isn't in the big league yet, but the TIN100 list's compilers say it's one to watch.

Keeping their intellectual property means Kaiparasoft controls its destiny, says co-founder Chris Harris. Photo / Brett Phibbs
Keeping their intellectual property means Kaiparasoft controls its destiny, says co-founder Chris Harris. Photo / Brett Phibbs

The idea of a monkey popping a balloon sounds simple enough, but it can help create a $5 million dollar company, as it has for brothers Chris and Stephen Harris.

Their Kumeu-based games software company, Kaiparasoft, made the TIN100 Report's "10 Hot Emerging Companies" list this year with $5 million in revenue, up 67 per cent on the year before.

With their most popular game, Bloons - featuring the balloon-popping monkeys - and some 60 other games, they are making money from advertising on their Ninjakiwi games site, by selling virtual currency and from their apps for Android and Apple devices.

One version of Bloons went live in Apple's App Store on November 2010 and has since been in the top 100 apps in the US.

The company has been growing at this rate for several years, says 37-year-old Chris Harris.

"It's the nature of being in an exciting, growing environment and having some strong IP."

Worldwide, games are big business. Market researcher DFC Intelligence forecast in July that the video-gaming industry will have reached US$82 billion in five years' time, up from US$67 billion this year.

Kaiparasoft, named for Chris' view of the Kaipara when he lived in Woodhill, had its beginnings in late 2005 when brother Stephen called for a chat, wanting to start an e-commerce site.

Stephen, now 35, had a degree in geophysics, but his postgraduate diploma in game design from the Media Design School had led to a job as a Flash developer at Saatchi & Saatchi. Chris was in banking and financial advice, but not particularly enjoying it.

The brothers thought they should start making games instead, and Bloons, one of their first, was a smash hit in late 2006.

So far, Kaiparasoft's path has been relatively free of stumbling blocks.

"We've been smart in managing our IP," says Chris Harris. "We have come close a couple of times to licensing it all away to somebody else, but then taken 11th hour legal advice and not done it - so we've been able to control our own destiny and we are in control of all our own IP."

In 2010 the company had an injection of experience when Scott Walker, from gaming giant Electronic Arts, expressed his interest in working for Kaiparasoft, which Harris thought was hilarious.

"We were seven people at the time and he is a guy from a company with several thousand employees."

Walker's wife was from New Zealand and he wanted to see what the things were like here. The brothers met Walker and realised he would bring experience of managing large teams and multiple projects that could help their business to grow. "He's probably one of only a couple of people in New Zealand with his skillset so that was really, you know, planets aligning for us."

The brothers run their company from New Zealand because this is where they want to live, but it can be hard to lure talented staff.

However a close friendship with the Media Design School has paid off; eight of the 19 people in the office are graduates.

"[The school is] really attentive as to what the industry wants and they offer good courses," says Harris.

In the near future, Kaiparasoft has been working with a Scottish developer, which promises to yield some results soon.

The far future? While someday, someone may come knocking with serious money, says Harris, "for the time being, the cashflow's good, and growing, and it's really fun being your own boss."

Skope Industries

Commercial refrigeration
TIN100 ranking: 15th
Revenue: $105 million

Earthquakes weren't enough to prevent refrigeration company Skope passing $100 million in revenue for the first time - up 12.9 per cent on the previous year according to the TIN100 report, to $105 million.

The Christchurch-based, family-owned business designs, manufactures and supplies commercial refrigeration, food service and heating products to clients globally.

Managing director Guy Stewart says Skope has been growing steadily year on year; 10 years ago annual revenue was $50-$55 million. "It's been a matter of maturity - understanding the customers more - and also a new major corporate beverage partner (Coca-Cola)."

Long known for making heaters, Skope is getting out of that market and focusing on new Australasian target markets. Research and development continues - Skope's team of 400 includes 25-30 designers. Among other achievements they have cut their appliances' power use by 70-80 per cent in 10 years.

Catalyst IT

Open-source IT services
TIN100 ranking: 87th
Revenue: $16 million

A long-time commitment to open-source software is paying off for Catalyst IT. Last month it launched a new online news portal for the South China Morning Post, Hong Kong's leading English-language newspaper. The company is now working on a 2 million-user eLearning service in the Middle East and is also building a North American cloud infrastructure for Totara, a corporate training system.

Director Mike O'Connor attributes Catalyst's 20 per cent annual growth to changing attitudes about the capability and reliability of open-source computing.

The company helps businesses and other organisations set up web services using open-source software, with clients paying for the development expertise, not the software itself, which is free to download.

Local clients include Fairfax's Stuff website, the Otago Daily Times and Scoop sites, the Electoral Enrolment Centre, TAB, Open Polytechnic and Telecom.

SLI Systems

E-commerce solutions
TIN100 ranking: 88th
Revenue: $16 million

Launched 11 years ago, Christchurch-based SLI Systems this year appears on the TIN100 list for the first time.

SLI offers a variety of services to improve the effectiveness of clients' websites. These include search engine optimisation - increasing the chance of an online search finding the site in question - and tools that make it easier for site visitors to find the content or products they want.

Selling to online retailers globally, 70 per cent of the company's sales are in the US. Another 15 per cent comes from Britain and the company is also also doing well in Australia. Now SLI is focusing on its next target market: Brazil.

The company has formed partnerships with two large companies in Brazil and provides its site search services to several Latin American e-commerce brands.

Chief executive and co-founder Dr Shaun Ryan describes Brazil as "a huge market with a lot of potential - and with less competition."

Wyma Engineering

Processing equipment
TIN100 ranking: 69th
Revenue: $25 million

Vegetable experts Wyma lifted revenue 56 per cent in the latest financial year. The Christchurch firm, which began in the 1980s, designs and manufactures machinery for processing vegetables: receiving, washing, grading and packing them.

With about 100 staff, the company supplies 40 countries and 22 dealers globally, and has offices in Christchurch, Australia and the Czech Republic. Main markets are Europe, Australasia and the Americas.

Overseas distributors have been important in spreading the brand name, and in providing an understanding of the local business environment and language skills.

As well as fluctuating exchange rates, the distance to those markets has been a challenge when exporting large, heavy equipment.

However the past year has been good, something managing director Peter Suckling attributes to continuing sales of the company's Vege-Polisher equipment, adding more products to their range, and several new projects.

- NZ Herald

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