Wellington digital agencies Springload, Touchtech chase scale with merger

Tuesday 1st May 2018

Wellington-based digital agencies Springload and Touchtech are merging to scale-up their businesses and offering a broader skillset in a sector singled out by the government as needing to make a bigger economic contribution.

The two privately-owned companies have been working towards a tie-up after their respective heads - Springload's Bron Thomson and Touchtech's Andrew Smith - met at a Wellington Regional Economic Development Agency-organised CEO breakfast last year. At the time, Springload employed about 35 people and Touchtech had 20 staff.

Thomson said it quickly became clear the firms weren't direct competitors, with Springload's strengths in design, user experience and content and Touchtech having greater technical focus, skills in artificial intelligence and machine-learning, mobile app development and Silverstripe capability. Those differences created a "pretty compelling" opportunity to pool their resources and bypassing some of the growing pains that come with expansion.

"Scale gives you some really good opportunities in multiple ways," Thomson told BusinessDesk. "It gives our staff opportunities to grow and learn, develop in ways they might not have been able to before" and it "gives us the opportunity to work with clients on big meaty complex problems at a scale we hadn’t before".

The merger is effective from May 1 and will see Touchtech's New Zealand team come under the Springload umbrella and employing 68 people. Touchtech's Australian unit will stay separate.

A workforce of that size makes the merged Springload-Touchtech slightly larger than NZX-listed digital advertising firm Plexure Group, which had 55 employees as at June 30 last year, of which 47 were New Zealand-based. Plexure generated $7 million of revenue in the 2017 year and spent $5.4 million on wages and staff costs.

Thomson said they'll keep the Touchtech brand alive for a while, which she said people associate with AI and machine-learning, and retains close ties with the start-up community.

Springload's website showcases work for clients including Radio New Zealand, Research and Education Advanced Network New Zealand, NZ On Air, and Kiwibank, while Touchtech namechecks National Australia Bank, Xero add-on Smart Tax, and the Good Registry.

Thomson said customer demand remains strong, and the firms' existing clients now have a broader range of services at the one shop.

The Labour-led government wants to develop New Zealand's information and communications technology sector to be the second-biggest contributor to gross domestic product by 2025, with digital inclusiveness the top priority for ICT Minister Clare Curran.

The Ministry of Business, Innovation and Employment estimated ICT contributed $3.6 billion to GDP in 2016 and employed 29,700 people. The ICT report said the sector had been growing at an annual pace of 9 percent since 2007.

Springload's Thomson said digital platforms are often thought of as a channel by customers when it was more like a utility, and the company has launched a digital transformation consultancy called Tandm to help firms better understand what technology can do for their business.

"Digital is steeped in every aspect of our business. The way we communicate internally, and the tools we use in our work are heavily digital and of course the way we engage with our customers is too, " she said. "There are some instances where it's a bit different, but because that’s changing, our clients are realising they need to incorporate digital into their business strategy at a much deeper level. Tandm helps them understand how to embed it throughout their organisation effectively."

(BusinessDesk)

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