Nyriad up for quick sale, rich-lister Guy Haddleton circles - again

Software entrepreneur Guy Haddleton at his home in Takapuna, Auckland, in 2019. Photo / Jason Oxenham

Waikato-founded Nyriad was once billed as The Big Thing in tech. It still might be. But all of its buzz continues to be around ownership changes and restructures - the latest of which involves a tight-line sale, which could draw its one-time white knight Guy Haddleton back into the fold.

Nyriad, the Kiwi-American firm that says its technology can revolutionise computer storage, is on the block following slow sales and difficulty raising capital.

The move follows a period of layoffs, restructuring and relocation - and the resignation of rich-lister Guy Haddleton from the board on New Year’s Day.

A sale memo sighted by the Herald, prepared by accounting and consulting firm Armanino, says offers must be submitted by February 21 and a sale closed by March 8.

Haddleton joined Nyriad’s board in 2020, becoming its chairman, installing new leadership and helping it to raise tens of millions in new capital, and refocus as it moved its corporate headquarters from New Zealand to the United States. A development team remains in Waikato.

Nyriad was founded in the last decade as a firm that could exist in orbit around the publicly-funded Square Kilometre Array project (more on which below).

More recently, it’s seen its ability to “streamline video editing, rendering and delivery with blazingly fast speeds” for the film industry as one of its killer apps - but it appears to have been a Hollywood flop, so far.

The sale memo says despite getting its first product to the market in October 2022, “despite early customer wins and successful proof-of-concept testing at various customer sites, the company encountered prolonged sales cycles, which were exacerbated by the prevailing macroeconomic environment... The sales cycle in the M&E [media and entertainment] market was also impacted by the extended writers and actors strikes.”

Nyriad closed a Series B round - involving an undisclosed amount raised from existing investors - following its first product release, the memo said, but “securing incremental funding proved difficult given limited customer traction”.

It added: “Consequently, the board elected to minimise cash burn and explore the sale of all or part of the company”.

Nyriad’s Austin, Texas-based chief executive Derek Dicker said in an email to the Herald: “Nyriad recently formally engaged with a firm to administer the sales process on an accelerated timeline... The board believes that Nyriad technology continues to hold great promise and that this step is in the best interest of its shareholders and the long-term sustainability of its technology.”

All not quiet on New Year’s Day

Asked why he quit Nyriad’s board on New Year’s Day, Haddleton told the Herald: “I left to explore the acquisition of certain assets. I’m still exploring?”

Which assets?

“Nyriad assets,” Haddleton said.

The entrepreneur, valued at $800 million on the latest NBR rich list would not disclose the size of his stake. Did he want to buy the whole of the firm?

“My offer was rejected, so it’s now unlikely,” he said.

SKA tissue

Nyriad was co-founded in Cambridge, Waikato, by loudspeaker repairman turned acoustic engineer Matthew Simmons and Microsoft US alumnus Alex St John in 2014.

It was initially focused on data processing opportunities arising from a multi-country, taxpayer-funded astronomy megaproject called the Square Kilometre Array (SKA), which required billions from the governments that supported it. The project saw Nyriad receive two $350,000 dollops of Crown funding.

New Zealand was part of a consortium of countries bidding to host elements of the SKA, but downgraded its commitment in 2018, then pulled out altogether in 2019 as costs rose - after which point Nyriad refocused on the commercial market.

Nyriad said its GPU (graphics processor unit)-based technology could deal with a firehose of data at great speed. Nvidia and other firms have made hay with GPU-based technology with the crypto and AI booms, but Nyriad has never got product to market in any volume (the firm has never commented on its revenue, which was put at less than US$200,000 ($327,000) in a 2022 Blocks & Files report).

White Knight, Version 1.0

Simmons said he would employ hundreds of engineers but ended up trimming staff, and allegedly overworked others, before Haddleton stepped in.

The rich-lister emerged as something of a white knight for Nyriad, leading a charge to raise funds for an expansion into the US, where the firm anticipated making its first sales. At the same time, Haddleton became chairman. Geeky co-founders Simmons and St John exited stage left. IBM veteran Herb Hunt was named the new chief executive.

Haddleton told the Herald: “When the company transitioned to the US, we consolidated existing rounds into a Series A - the most recent round as part of that was $20m raised from existing investors in Nov 2021″.

But towards the end of 2022, Nyriad was still struggling to gain momentum. Pandemic-related supply disruption had been “a massive problem”, Haddleton said.

The firm, which had around 100 staff at the point New Zealand pulled out of the SKA, cut about 15 per cent of its work staff as it eliminated a number of US-based roles, leaving it with 60 - 45 of whom were based here. The firm would not say how many staff it employs after its recent expense-cutting drive.

Can afford a few misses

With his wealth approaching $1 billion, Haddleton can afford some of the misses that inevitably land with multiple start-up investments.

He and his wife made their fortune through building then selling two business planning software start-ups: Adaytum (sold to IBM for US$160m in 2003) and Anaplan, which raised US$263.5m when it listed on the NYSE in 2018 at a US$3 billion valuation. The former New Zealand Army SAS captain was also one of the earliest investors in Xero and a director of the Rod Drury start-up for three years from 2007.

More recently, Haddleton has been the primary investor in medicinal cannabis start-up Helius which, like its peers, has been battling to reduce what he sees as heavy-handed restrictions in the sector.

He was also one of the backers of Covid-19 Vaccine Corporation (CVC), which raised $5m from private backers and $1m from the Government to develop “bio bead” vaccine delivery technology that emerged from Massey University. It shut up shop in May last year after trying and failing to secure another $20m in Crown funding.

Haddleton is also managing director of Lodestone Energy, which is seeking to disrupt the energy market. It recently raised $300m from backers including Rod Drury and Sir Stephen Tindall to build half a dozen solar farms around New Zealand.

Construction on the first, a 61,000-panel effort near Kaitāia billed as NZ’s largest solar power project, was switched on last November. And earlier this week, Lodestone broke ground on a 30MW, 70,000-panel farm near the Waiotahe River in the Ōpōtiki District which will generate enough power for about 9500 homes.

Last week, OneRoof reported that Haddleton was selling three adjoining properties on Auckland’s Takapuna Beach, with a combined CV of nearly $30m, after pulling the pin on a plan to bowl the homes to build a large, European-style mansion.

The plan changed following the deaths of his wife and business partner Sue in 2022 and his stepson Matthew last year, both from cancer.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.