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Media and news 2005 Endeavour Capital invests NZ$3 million in Beca start-up Derceto following sales in USA of world leading energy efficiency technology 26 April 2005 Derceto to leverage Endeavour Capital’s North American expertise and target US$250 million market. AUCKLAND, 21 April, 2005 – Endeavour Capital, one of New Zealand’s leading venture capital firms, today announced a NZ$3 million investment in software innovator Derceto, a subsidiary of Beca, the largest New Zealand owned professional services group. Initially stimulated by New Zealand’s deregulated electricity market, Derceto now develops energy efficiency software for large water distribution companies in the United States and Australia, optimising water pumping schedules and creating significant savings in power. The US$104 billion water utility market in the United States accounts for 75 billion kilowatt hours per annum or 3% of the total electricity consumption in that country. In 2004 Derceto began targeting the 210 largest utilities, each serving more than 200,000 customers, where sales opportunities alone total more than US$250 million. In the last eight months Derceto’s American client base has grown to more than fifteen utilities across the United States. The NZ$3 million investment from the Endeavour i-Cap fund, managed by Endeavour Capital under the Government licenced Venture Investment Fund scheme (NZ VIF), will be made in two tranches over 12 months culminating in a shareholding of approximately 40% in Derceto. Beca Executive Chairman, Gavin Cormack, said the Endeavour Capital investment will enable Derceto to reach its full potential as a stand-alone commercial entity. “Derceto has successfully transformed innovative technology from within the Beca Group into a unique product with a huge international market, especially among the more than 200 major water utility companies in North America” he said. Mr Cormack said that Endeavour Capital’s proven success and extensive business network in the United States made the firm a natural fit for Derceto. “In Neville Jordan and Dr Dennis Row, Endeavour Capital has two outstanding New Zealand entrepreneurs with proven commercial success in the North American market.” Neville Jordan, the founder and Chairman of Endeavour Capital, became the first New Zealander to successfully list a local company, MAS Technology, on NASDAQ. Endeavour Capital partner Dr Dennis Row, who becomes a Derceto director, has also achieved significant business success in the United States. He spent more than two decades in California where he was founding partner and CEO of Rebis Inc, and Senior Vice President of Cyra Technologies. Endeavour Capital’s Neville Jordan, said he had known Beca founder Sir Ron Carter as well as Gavin Cormack for 20 years. “I admire the outstanding work started by Sir Ron in building the Beca Group into a world class engineering consultancy business with extensive success in many countries,” he said. “The innovative New Zealand technology that Beca has spun off into Derceto signals a bold new step for the group. We look forward to committing our resources, both financial and commercial, to help grow Derceto into the dominant international player within its niche industry.” Derceto director Bryce Whitcher said the company had been faced with a raft of financing options including interest from overseas venture capital firms. “We wanted external funding to take the business to the next level and, given our New Zealand heritage, we are proud that a locally based investor such as Endeavour Capital has come on board as our partner,” he said. “In addition, three of the principal executives in Endeavour Capital are professional engineers which means they understand both the Derceto technology and the target market, making Endeavour Capital an ideal mentor and partner.” Endeavour Capital partner Dennis Row said he saw huge opportunities in developing the company into a global innovation leader in its field. “Derceto is a truly unique product developed in New Zealand for a very specific yet commercially significant world market, the water distribution industry. In the United States alone, where Derceto already has traction, the market opportunities are immense. This makes Derceto a compelling investment for Endeavour Capital,” said Dr Row. Derceto’s success in the US market to date includes the implementation of its software by California based East Bay Municipal Utility District, a recognised innovator among North American utilities. East Bay MUD, who service 1.2 million customers in and around Oakland, estimate that their annual energy savings will reach US$500,000, based on the first eight months of Derceto operation. For further information
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