Tech innovator’s pet project fetches $100m-plus
Sale to US giant will mean more jobs in New Zealand, says ezyVet chief executive
Tech company ezyVet — the Auckland maker of software for veterinary practices and hospitals — has been bought by Nasdaq-listed IDEXX Laboratories. Founder, chief executive and sole shareholder Hadleigh Bognuda would not put a price on the deal, but it was subject to Overseas Investment Office approval — meaning it was somewhere above the agency’s $100 million threshold.
The Weekend Herald understands that it was closer to Vend’s recent $455m sale than Timely’s, which was thought to be near the OIO’s $100m minimum approval mark.
This year has seen a string of local tech companies sold overseas, with Auckland point-of-sale software maker Vend going to Canada’s Lightspeed for US$350m ($455m), Dunedin appointment booking software firm Timely sold to Silver Lake-backed US company EverCommerce for $100m-plus, Kumeu mobile game developer Ninja Kiwi sold to Sweden’s MTG for $203m and Christchurch geological 3D modelling business Seequent acquired by Nasdaq-listed Bentley Systems for $1.45 billion.
While the trend has caused concern in some quarters, a buoyant Bognuda told the Weekend Herald the sales should be celebrated. “It’s great news for New Zealand, and tech talent.”
For his company, it would accelerate already ambitious hiring plans.
Today, ezyVet and satellite company Vet Radar (a maker of workflow software for veterinary hospitals, which is also part of the IDEXX sale) employ 200 staff — 130 in Auckland and the balance in the US and UK.
Bognuda had been planning to boost that to 500 by 2024.
With deep-pocketed IDEXX now behind him (the US firm has a market capitalisation of US$47b), he anticipates expanding his hiring drive to hit 800 or 900 staff by mid-decade.
“We’ll have more Kiwis building more software and creating more wealth and paying more tax,” he said.
Each sale “creates a new generation of angel investors and mentors,” he added.
Investors who benefited from the Trade Me sale had poured money into start-ups like Vend and Timely, while he had used funds from two previous exits — Vibe and ThinkConcepts — to bankroll ezyVet. His company has just completed a new building in Freemans Bay that can accommodate 350. Now ezyVet is trying to employ 40 more staff immediately, though Bognuda says the tech skills shortage and closed border means recruitment is challenging in the near term.
Bognuda said ezyVet was founded in 2007, but spent its first six years on product development. It was not until
2013 that it started to get a foothold in the market.
Today, ezyVet holds about half of the local veterinary market, but Bognuda said NZ sales accounted for only 2 per cent or so of the company’s annual revenue. It has always had a strong focus on the US, and has about
2200 customers worldwide, making it the global market leader in its niche.
IDEXX, which makes a range of software and diagnostics for the veterinary market, has about 10,000 customers and will help ezyVet extend its reach further.
The US giant has doubled its market value during the pandemic — which has boosted pet-buying — as its shares climbed from US$183.29 in March 2020 to a recent US$550.61.
Bognuda said the sale was unusual in that there was no venture capital or private equity involved. EzyVet had been profitable for years, allowing it to grow organically, and for the Wairarapa College old boy to retain 100 per cent control.
When IDEXX approached him, it was just the latest in a string of offers to buy ezyVet. Like other trade sale offers, the price and terms were more attractive than a private equity deal.
Beyond his hiring drive, Bognuda said he will now weigh potential investments in local start-ups.
“But first I’m going to get some sleep.”