WA tech make global moves
Several technology companies based in Perth have expanded their global reach in recent weeks.
ASX-listed cyber safety company Family Zone recently acquired its UK-based competitor, Smoothwall, for $142 million.
Moodle, meanwhile, an open-source learning management system, acquired three of its US partners, while Vix Technology rolled out its transit ticketing system to more cities.
Family Zone, which offers cloud-based parental control solutions, raised $146 million to fund the acquisition of Smoothwall in early August.
According to an ASX release at the time of the acquisition, Smoothwall, which develops and sells similar technology to Family Zone, generated about $30 million of annual recurring revenue and delivered unaudited underlying earnings of about $7 million for the financial year ending March 2021.
Smoothwall services 12,400 schools and 6 million students in the UK and the US.
Family Zone founder and managing director Tim Levy said the acquisition gave the company access to new clients and software capabilities that could be added to its existing products.
The purchase adds 113 staff to Family Zone’s 180 employees.
Family Zone has experienced strong growth since listing on the ASX in 2016.
It acquired New Zealand company Linewize in 2017, and in June of this year paid $23 million for US company Net Ref.
Family Zone has grown its US footprint to serve more than 5 per cent of school districts in the US and has a market capitalisation of about $500 million.
Mr Levy said Family Zone was a Perth business with global cyber safety problems to solve.
He said being based in Perth provided a good time zone to operate from and allowed him to arrange meetings between employees in in New Zealand, the UK, and US.
Finding employees in Perth could be difficult, however.
“One of the challenges we have in Perth is engineering talent gets soaked up by the resources industry and by government and they’re prepared to put big money into people to do things,” Mr Levy told Business News.
He said it was especially difficult to find people with experience building security and safety technology or selling it, although global connectivity was making it easier to find talent.
“You can compensate for that by working virtually now globally,” Mr Levy said.
He said Perth’s lifestyle was a major factor that kept him here.
“It’s just a fabulous place to live … so I’d rather not leave,” Mr Levy said.
Moodle has also recently made strides to grow its business globally by acquiring three of its US partners.
The company, which started open-source learning management systems used by institutions and companies including Cisco, Cambridge University and Shell, and has 300 million registered users, did not expand internationally in the conventional way.
After university staffer Martin Dougiamas started developing Moodle in the early 2000s (for free), he was overrun by enquiries for support and decided he needed to turn it into a sustainable business.
He created a model where businesses could register as Moodle partners to help clients sell and configure the software. Partners pay Moodle 10 per cent as a licensing fee to use trademarked marketing materials.
“I decided to outsource the clients to other people so I could focus on the core development and that’s how the partners got going,” Dr Dougiamas told Business News.
“That’s why we have so many partners around the world doing the services.
“It [business] wasn’t my background, I’m a computer scientist engineer and I think I am best at solving those kinds of problems.”
Two decades on, Dr Dougiamas said it was the right decision because the partnership model allowed about 100 partners to target larger overseas markets.
However, Moodle has altered the partnership model slightly after the acquisition of My Learning Consultants, Moonami Learning Solutions, and Elearning Experts for an undisclosed sum in early August to create Moodle US.
The move adds 45 staff to Moodle’s 88 employees in Perth, Spain and the US.
Given Moodle’s international reach and network of 10,000 contributors who help develop the company’s open-source platform, Dr Dougiamas said he saw Moodle as a global company, rather than one from Perth.
“It is expensive and every time I hire someone here, I think we could have hired three people for that somewhere else,” he said.
Finding the right skills could also be difficult, Dr Dougiamas said.
“The number of people doing that [software development] compared to Barcelona or Silicon Valley or somewhere else is a lot less, it’s a much smaller pool. So, you end up doing more hunting and training and that all costs time and money as well,” he said.
Another local business growing its international footprint is Vix Technology.
Perth is home to one of the company’s three global headquarters (the others being Cambridge in England and Seattle in the US). It also has 14 other offices worldwide.
Vix Technology has developed transit ticketing systems currently used in 200 cities around the world.
More cities are using Vix Technology’s system after it has rolled out in Phoenix in the US and Edmonton in Canada.
It was recently recognised for its work and named as company of the year at the 2021 Incite Awards in Perth.