APRIL 12, 2016 12:15AM
Silicon Valley heavyweight Sequoia Capital has teamed up with Australian tech venture capital firm AirTree Ventures to pour $US7.5 million ($9.9 million) into New Zealand-based cloud-based corporate video start-up 90 Seconds.
Sequoia is one of Silicon Valley’s biggest names, having invested early on in several of the world’s most famous tech companies including Apple, Google, YouTube, Oracle, Instagram, WhatsApp and Airbnb.
The deal represents a coup for both AirTree and 90 Seconds, which is aiming to follow in the footsteps of fellow Kiwi start-up success story Xero and continue its rapid growth to become a significant global player. Sequoia will take a seat on the company’s board.
90 Seconds is five years old and operates an online marketplace that connects brands and agencies with video creative professionals such as videographers, directors, editors, producers, animators, drone operators and photographers in over 70 countries.
Founder and chief executive Tim Norton told The Australian Financial Review that its revenue has grown 300 per cent in the past year and is turning over $1 million a month, as it approaches the significant start-up milestone of breaking even. He said the investment showed the increasing trend for big United States VCs to view Australian and New Zealand start-ups as global opportunities.
The investment was organised through Sequoia Capital India’s Singapore-based office, and Mr Norton said other local start-ups should consider approaching big US VCs through their Asian operations, rather than their US-based and US-focused Silicon Valley operations.
“To get an investor like Sequoia is a great thing for any technology company, regardless of the stage you are at,” Mr Norton said.
“The expertise they have got in managing these business models and the team structures you need is incredible … A lot of these big VCs had been investing in a US-centric manner not too long ago. They now have bases in Asia and are looking for global companies to come from anywhere … Singapore is a great place if you want to try and reach a company like Sequoia.”
Sequoia Capital vice-president Pieter Kemps said the company had been able to demonstrate a fast-growing and rapidly scaling business model.
“The 90 Seconds team has done a terrific job in building the leading global marketplace for video production. In the large and rapidly growing video market, they offer creative talent and agencies a unique workflow platform to work together on global projects.”
The company already has an impressive roll call of brands using the platform regularly, including Visa, PayPal, Sony, Samsung, Barclays and Microsoft. AirTree co-founder and managing partner Craig Blair said he saw no reason why its rapid growth rate could not continue for a number of years.
Just less than 70 full-time staff are employed in operations in Singapore, London, Tokyo, Manila, Sydney and Auckland. Following funding that number will double, with offices opening in San Francisco, New York, Hong Kong and Berlin this year.
“The video market is enormous today and is only going to grow … Of all the models we invest in, marketplaces can grow at extraordinary rates,” Mr Blair said.
“It is already a decent-sized business, so it doesn’t need to keep that growth up for long before it is a serious global-sized marketplace.”
Mr Blair said dealings with Sequoia on earlier investments meant there was a good relationship already in place. But this deal was evidence the Australian venture capital sector is “coming of age”.
“Australian VCs co-investing with a top global VC like Sequoia, in a New Zealand business, serving a global audience, is true globalisation of VC,” he said.
“We have had that already with Canva ourselves, but there are others in the local market also doing it, and we will see it more and more as the relationships develop, and teams here get better track records of investing.”
Sequoia is the largest backer in the $US7.5 million round, followed by AirTree. The round also included investment from SKY Network Television, VC firm BEENEXT and entrepreneur and angel investor Oleg Tscheltzoff.