I have to admit I was a little surprised and saddened to read news of the Esphion sale. Five mill U.S. seems like a low price to me. In fact by my accounting, the sale price is less than the total amount placed by investors in the company since it was founded in 2002! Something doesn’t add up here. Possibly the NZ Herald article does not relay the full story and there may well be good reasons for such a hasty exit. But touted in 2005 as one of the top 100 leading edge tech companies in Asia by Red Herring and having secured several major product installations; Esphion seemed destined to succeed.
But it looks horribly like yet another example of a clever Kiwi idea struggling to gain traction in a global market and then getting gobbled up by a more powerful competitor. I thought the idea was to grow these companies from home and build a high tech economy? Will the taxpayers, who subsidised the firm with grants and seed coinvestment, have an opportunity to realise an economic return? There’s little point in business leaders and scientists pitching for more government support for technology commercialisation if there is no accountability about keeping these businesses local.
In the meantime scroll down half a page and we read that China Railway Construction, a former operating division of the Communist Red Army, is about to undertake a $4.5 billion market listing in China and Hong Kong. How ironic is that? Perhaps we should simply forget about the technology business and get into construction instead?