Helen Twose

Personal finance and KiwiSaver columnist at the NZ Herald

Success: Export sales in company's DNA

Auckland biotech firm's focus on fast growth and international markets.

Before Biomatters, Andrew Steel's diverse career included vodka maker 42 Below and fashion label Trelise Cooper. Photo / Brett Phibbs
Before Biomatters, Andrew Steel's diverse career included vodka maker 42 Below and fashion label Trelise Cooper. Photo / Brett Phibbs

Clever New Zealand technology will soon be on tap to help doctors around the world diagnose and treat serious illness.

Auckland firm Biomatters has spent the past decade developing and selling tools used for number-crunching vast amounts of molecular information.

Its main software product, Geneious, is used by universities, research institutes and companies in more than 100 countries to better understand living organisms at a genetic level.

Now Biomatters is taking that technology expertise and applying it to real-world uses, such as the treatment of cancer, in the next stage of its growth as a company.

Chief operating officer Andrew Steel, 37, says in a research environment customers work in a free-form manner, applying algorithms to test and compare genomic data.

In the more commercial, applied space, DNA data can be run through a pre-set sequence of tests built into applications aimed at churning out reports to be sent to clinical specialists treating patients.

Steel says it would be similar to ordering a blood test from a pathology lab - the doctor doesn't stipulate how the test is run and is interested only in the results that come back.

He says applying genomic research done over the past couple of decades has the potential to deliver significant health benefits for people, as well as having an impact in a range of areas from animal health to creating environmentally friendly fuels.

The technology category that includes Biomatters is set to grow phenomenally, with conservative forecasts suggesting annual growth rates of 15 to 20 per cent for the next 10 years, Steel says.

"What I think Biomatters is really well positioned to do is take advantage of some of that." The company has strong links to significant organisations in the industry, including the United States Centers for Disease Control and Prevention and the US Department of Agriculture, and users in all the top 100 universities around the world, he says.

"The Biomatters success to date has come from really trying to be very close to what the people who use the software need and continually adapting to their needs." That includes harnessing the power of cloud computing to allow very large datasets to be analysed in a way that is beyond the processing capability of a desktop computer.

The company has been working with major players in the cloud computing industry, including Illumina, a US-based hardware and software supplier that runs Biomatters applications on its BaseSpace analysis platform.

Creating a suite of diversified offerings beyond its original Geneious product shows the company has reached a degree of maturity, says Steel.

"We tend to think of it now as beyond the start-up stage." For British-born Steel, high-growth companies are where he loves to be, having come to New Zealand eight years ago to take up a contract role with vodka maker 42 Below, before working for fashion label Trelise Cooper.

While genome sequencing might seem a world away from booze and frocks, in each of the businesses there was a focus on growth and overseas markets.

International sales drive revenue growth at Biomatters, which Steel says fits in the under $10 million bracket, with most of its single- or site-licence purchases coming from overseas.

"But I think if you want to grow a company of any size or significance from this country you have to internationalise and that's a huge challenge." About half of Biomatters' sales are to North America and the company has worked to establish a permanent presence in the United States.

"Our relationships with some of the larger organisations have come about because we've repeatedly had Biomatters staff in-market talking to those people, even if those staff members are based out of New Zealand." The company gained a funding boost for its overseas growth in 2009 when it was a joint winner of the University of Auckland Business School Entrepreneurs' Challenge.

"What that loan facility allowed us to do is it gave us real comfort that we had sufficient funds to perhaps take a little bit more risk than you would take if you didn't have the back-stop of those funds." With the Entrepreneurs' Challenge loan repaid, the company is in the comfortable position of being profitable, cashflow positive and debt-free, says Steel.

In the near term any growth will be funded internally, but if the firm gets to a point where speed is of the essence in getting a new product to market, then it will look at funding options.

"Where that funding comes from is an interesting question. I think at this stage we're open to a range of options and whether or not that were to come from private sources, industry sources or perhaps some kind of public listing or something at some point in our future."

- NZ Herald

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