Kiwi tech firm scores NZ Rugby deal
While Diligent targets corporates, BoardPro is aimed at small to medium-size organisations and non-profits
Auckland-based BoardPro has won a contract with NZ Rugby that will see 26 provincial unions, five Super Rugby franchises and the NZ Maori Rugby Board adopt its boardroom governance software.
BoardPro founder and chief executive Brett Herkt often puts his company in the same frame as Diligent Board Member Services when discussing customer numbers — Diligent being the NZX-listed company in the same market that had a remarkable $1 billion sale to a New Yorkbased private equity outfit.
But while Diligent targets corporate boards, BoardPro is aimed at small to medium-size organisations and non-profits.
In February, Herkt said his company had around 400 customers in New Zealand to Diligent’s 450. “They have saturated their market. At our current growth rate, we’ll overtake them within two months,” he predicted.
So how’s that tracking? Herkt says BoardPro now has 600 customers and 4000 monthly users — though he says that still represents just 7 per cent of the NZ market for his privately-held startup.
Worldwide, it now has 650 boards with a paying subscription, with most of the extras in Australia.
BoardPro has also just had a seed round. The amount raised was a modest $600,000, but Herkt says the main aim was to broaden his company’s share register with some name investors ahead of a Series A round in a few months that will target a raise of around $3 million.
And indeed three high-profile investors came on board in the seed round: Sir Stephen Tindall’s K1W1, Sir David Levene’s Lewis Holdings and Ice Angels.
The raise also included two individual investors who have scads of governance experience between them: former Commerce Commission chair Paula Rebstock and the ubiquitous Michael Stiassny.
Collectively, the investors in the $600,000 seed round now hold around 8 per cent of the company. The money will be used to push further into Australia.
NZ Rugby is one of the four-yearold BoardPro’s largest deals to date.
But, more importantly, Herkt says: “It’s quite a milestone for us in that we’ve seen a mothership centrally fund all of its member organisations.”
He says he now has three more similar deals in the pipeline, one involving a campground association, another a philanthropic organisation and a third another A-list sporting code.
And he already has a similar deal in place with the Citypointe megachurch in Australia, which has affiliated organisations in areas like charity work and rescuing drunk students from Gold Coast pavements during the notorious “schoolies” week.
Interestingly, although NZ Rugby has chosen BoardPro for its member unions, its own board uses Diligent.
Herkt says he didn’t pitch for that business, and is happy to leave it to his rival. He says Diligent has a level of complexity for large organisations that his own product lacks, plus extra features such as the ability to work offline when you’re on a plane (BoardPro is cloud-based, and requires your web browser to be connected to the internet).
That doesn’t mean a lack of ambition. Herkt wants to hit $100m annual revenue within five years, and sees a total of around 1.1 million small or non-profit organisations in the English speaking world that need to be governed, or an addressable market of around $1.7b per year.
It’s just that BoardPro is focused on smaller organisations and people — like those on provincial rugby union boards — who are often amateurs and just want an easy solution creating agenda, keeping notes, and sharing documents.
And he notes that BoardPro — which costs between $1200 and $3300 a year, depending on the number of committees catered to, with schools and non-profits getting a 20 per cent discount — is only around a tenth the cost of Diligent.
Two Super Rugby franchises and one provincial union were already using BoardPro — which helped it get its foot in the door for the nation-wide deal. The rest were typical in that they had no governance software. Herkt says the norm for smaller organisations is a mess of pen-and-paper, Email, Word and Dropbox.
The softly-spoken Herkt doesn’t immediately seem like someone who would spearhead a startup or hold his own in M&A but, in fact, he’s been here before. He was chief executive and a shareholder in Auckland ISP and data centre operator Maxnet, growing it from a $2m to $15m business before its sale to Vocus in 2012.
His track record helped him to attract a heavy-hitting board for the embryonic BoardPro — and his board, including Bruce Sheppard and Kevin McFall, one of the co-founders of email security firm Mail Marshall, sold to US company NetIQ for US$45m in 2002.
It’s quite a milestone for us in that we’ve seen a mothership centrally fund all of its member organisations. Brett Herkt