High-flying DNA company Biomatters sold offshore

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New Zealand tech business Biomatters, a leading provider of DNA data analysis solutions worldwide, says it will be acquired by US company GraphPad.

None of the parties involved would comment on financials, but Biomatters - a darling of the business and tech press - has grown quickly to become a substantial operation.

"We have 65 staff - 47 here in NZ, 8 in the United States, and 10 in our office in Denmark," chief executive Brett Ammundsen told the Herald this morning.

"We have around 4000 customers worldwide, ranging from individual researchers who download the software from our website, to top 10 pharmaceutical companies. Our active user-base is over 50,000 scientists."

Biomatters has had a leg up from taxpayers at various points.

In 2010, it was one of three companies that shared $1 million growth funding through the University of Auckland Business School Entrepreneurs' Challenge.

Crown agency NZVIF (the NZ Venture Investment Fund) invested in Biomatters, and it was also backed by business incubator IceAngels.

IceAngels wouldn't comment on financials. NZVIF head Richard Dellabarca said the sale was "was outstanding for the company and NZVIF as an investor," but declined to detail gains. Biomatters was part of a $50m NZVIF funding round in which investments were in the $2m-$4m range.

While Biomatters' intellectual property, and the future profits it will earn, are now lost to the US, Robbie Paul - who heads the new Icehouse Ventures says: "Every time there has been an exit of this magnitude we have seen significant re-investment of capital and talent into new startups."

Icehouse Ventures, which formally launches next month, will invest more than $100m in early-stage companies alongside partners Simplicity KiwiSaver, FNZC, and Sir Stephen Tindall's K1W1.

And Biomatters boss Ammundsen says the offshore sale is the best course for his company, which will continue to be run out of NZ.

"We are operating in a highly specialised scientific domain, and have spent years building a team with deep expertise and knowledge of the needs and challenges faced by researchers working with DNA data," he says.

"That deeply embedded domain expertise is a large part of our business value. GraphPad intends to continue to invest in us to further develop our software solutions and serve the scientific research community. No major operational changes are planned.

"I'm personally delighted by the quality of the incoming investors. Sixty per cent of our customer base is in the United States - the remainder is mostly in Europe - so we have been very engaged and active in those geographies throughout the growth of the business. Being acquired by a US entity is a natural next step for us."