Public service cutbacks: NZ startup Yarken primed to help

Yarken founder and CEO Ravi Kuppan.

An Auckland-based software startup, whose founder has a successful track record, says its new platform can help government departments track and tame their IT spend - offering an alternative to cutting staff as Regulation Minister David Seymour and Finance Minister and Public Service Minister Nicola Willis push for 6.5 per cent cuts to public service spending across the board.

What did you think about while lying on the sofa during lockdowns? Entrepreneur Ravi Kuppan - with a big score in the bank and looking for his next play - spent the pandemic watching the huge surge in digitisation.

His hunch was that with a shift to the cloud happening at such a rate of knots as the remote work revolution sparked record IT spending, organisations would have trouble tracking where it was working out financially, and where it was not.

The idea for his next startup was born: Yarken: A platform for viewing all of an organisation’s IT, and offering transparency about where costs are being incurred and value is being created.

The NZ Defence Force was one of Yarken’s earliest customers. Tauranga City Council is also on board. The AA has just signed on.

Ravi Kuppan with Yarken director David Oliver at Amazon's AWS re:Invent conference in Las Vegas last week.

“For most organisations, IT is like a black box. The CFO [chief financial officer] is over here and the CTO [chief technology officer] over there, and they might only talk at budget time once a year. This is a way to build a bridge between the two. We want to make it transparent. We want decisions to be data-driven rather than fingers in the air,” Kuppan says.

He won’t tie figures to specific customers, but says in one case Yarken saved an organisation $150,000 in the context of a $2 million annual IT budget.

Kuppan spoke to the Herald at the giant AWS re:Invent conference in Las Vegas last week, where he was tapping into AWS’s various partner programmes (his firm is an official AWS Partner and holds equivalent status with AWS rival Microsoft). He was also holding talks with a global systems integrator.

The founder was joined by two angel investors, who are on Yarken’s board, and Ben Kepes, who is chipping in advice (Kepes’ first startup, Cloudability, operated in a similar space. It was sold to US “FinOps” firm Apptio in 2019, with Apptio in turn bought by IBM in August this year).

Yarken's software offers breakdowns of spending trends in various areas, and metrics like support call and uptime trends, plus big-picture dashboards.

“It’s going to be really interesting with the new government. David Seymour has promised to make significant inroads into public spending. And potentially these things [Yarken’s features] offer ways for that to happen without reducing service levels,” Kepes said.

Regulation Minister David Seymour and Finance Minister and Public Service Minister Nicola Willis push for 6.5 per cent cuts to public service spending across the board. The default is analysis is a high body count - which will inevitably feature - but Kuppan and his adviser Kepes see tamed IT spending as a potential part of the mix.

“We’re doing POCs [proof-of-concept pilots] with several government departments at the moment, so we see this as a real opportunity for New Zealand and people like David [Seymour] who want to look at outcomes of value and use software as part of that puzzle as opposed to just making a spreadsheet,” Kuppan says.

But Kuppan stresses Yarken is primarily about transparency, not cutbacks. A client might decide to spend more in an area where a cloud transition is paying off, or decide to slide resources from one area to another.

“New Zealand government and businesses spend $41m on IT every day. Our mission is to help New Zealand companies to become IT Financially literate by having the data they need to make better decisions, spend wisely, show value and be accountable. Understanding just 5 per cent of our NZ IT spend in business services means we could unlock over half a billion that could be re-invested into growing businesses.”

Yarken’s target customers range from large to medium-size organisations, which Kuppan defines as those with around 500 staff.

Real-time alerts, AI coming to the mix

Yarken’s software can be used to gauge the financial merits of on-premise computers versus those hosted by a cloud provider - and, once you’re in the cloud, monitor how much is being spent with different providers.

You set spending thresholds, then receive alerts in Slack or Teams if they’re breached.

Unfashionably, Kuppan doesn’t mention AI until prompted. “We’re in beta with AI,” he says. “The way I see our platform is that it’s API [application programming interface] driven, with AI underneath it, then it integrates into DevOps as well.” In other words, it’s about getting software to talk to other software and serve up simple tracking metrics. Development operations, or “DevOps” is the field of delivering better software, faster, in part through better collaboration and communication.

Earlier startup success

As Kepes and Oliver are keenly aware, most startups fall over.

But this isn’t rookie territory. The UK-raised Kuppan founded his first startup, Tarantula Global, in 2000 - a Singapore-based maker of software that telcos used to manage their cell towers, with an emphasis on the bottom line (its tagline: We make telecom towers more productive and profitable).

Tarantula was sold to Voltaris - the investment arm of Toronto-listed Constellation Sofware - in 2017. If that name sounds familiar, Voltaris is also the party that earlier this year launched a (so far unsuccessful) $232m buyout offer for NZX-listed Eroad.

At the time of its sale, Tarantula’s software was being used to manage 350,000 cell towers across 20 countries, including NZ.

The terms of the deal were not disclosed, but the now Auckland-based Kuppan has been able to build Yarken’s platform and hire 18 staff over the past 18 months, without tapping any outside investment. A seed round is being finalised at the moment. Kuppan anticipates reaching breakeven in 18 to 24 months.

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.