Software developer Right Hemisphere, based in Silicon Valley and Auckland, will get an interest-free US$8 million (NZ$12.4 million) loan from the government, on the condition that the company retains two thirds of its research and development in New Zealand.
Prime Minister Helen Clark and Trevor Mallard, minister for economic development, announced yesterday that the government will help establish and support the 3D digital content and graphics industry in New Zealand under a new economic development initiative.
Right Hemisphere has specialised in Product Graphics Management (PGM) software, a new and growing software market segment. Using data created in CAD software, the company’s technology automates the publishing of 3D manuals and marketing material. Its clients are in the aerospace, defence, automotive and heavy equipment manufacturing market.
“The government is keen to increase the number of [New Zealand] companies that can compete off shore,” says Clark. “New Zealand needs more globally competitive companies, like Right Hemisphere, that set their aspirations very high.”
The initiative aims to slow down the “brain drain”; to help entrepreneurs and highly skilled professionals stay in New Zealand. It also aims to make New Zealand a more attractive job market for skilled workers from overseas, says Mallard.
Right Hemisphere stimulates new areas of research and development, and it provides international experience and opportunity for local entrepreneurs and investors, says Clark. She says that Right Hemisphere is a global leader in the 3D digital content area and that other New Zealand firms, as well as the universities, can leverage off the company’s know-how and experience.
In return for the loan, Right Hemisphere will assist to establish a self-sustaining PGM industry in New Zealand. As long as the company keeps to the agreement, the 25% interest will be waived, says Mallard.
The agreement between the government and Right Hemisphere incorporates:
- setting up a three-year programme of joint research projects, involving universities and Right Hemisphere, aimed at increasing R&D capabilities in New Zealand
- setting up a virtual cluster of educators, researchers and companies for networking, education and collaboration in the 3D digital content area
- members of the virtual cluster and research programme will get a 97.5% discount on Right Hemisphere’s software
- the two US venture capital firms backing Right Hemisphere, Sequoia Capital Partners and Sutter Hill Ventures, will review at least five New Zealand business plans a year for three years
- Sequoia Capital Partners and Sutter Hill Ventures will visit New Zealand to discuss US funding and business growth strategies with government agencies and local businesses
- Right Hemisphere will assist in attracting relevant US R&D, educational centres or customers to participate in New Zealand-based research
The PGM software market is expected to increase in value to around US$10 billion in the next ten years, and Right Hemisphere aims to take 10% of that market, says Mark Thompson, CTO of Right Hemisphere.
One of the company’s products, a 3D viewer, is included in Adobe Reader 7.