There are familiar names in Callaghan Innovation's latest funding round, which sees more than $21 million in research and development Growth Grants going to 15 companies.
Each qualifies for up to $5 million a year in Callaghan funding, paid retrospectively, under the Growth Grant programme (provided for under the government's 2013 budget) that will see a total of $420 million in matching R&D funds awarded over a three-year period. So far, around $220 million has been been approved, spread between 65 companies.
Under its latest round, Callaghan will deliver matching R&D funds to PowerByProxi, the Auckland startup that's inked partnerships with Samsung and others to commercialise its wireless charging technology.
And to Syft, the Christchurch outfit that's gaining traction with its electronic air quality measuring equipment.
It's easy to see companies like PowerByProxi and Syft making a strong case for Growth Grants. They're pioneering new fields, and creating high-value R&D jobs in NZ.
I could see both becoming export success stories, like Callaghan and NZVIF beneficiaries before them Xero and Orion Health (today, both software companies employ more than 700, and climbing, and both have fast-growing revenue around the $100 million mark).
But another name on the list has me stumped: Trends International Publishing — an Auckland company known as the publisher of glossy magazines covering areas such as architecture, design and home renovation, and driven by advertiser content.
Trends does now publish its advertorial titles in several countries, and like all publishers it's experimenting with different online formats. Still there's no immediately obvious angle on Callaghan's goals to strengthen R&D, and develop higher-value exports for our small, private capital-starved country.
In order to apply for a Growth Grant, a business needs to commit to spend at least $300,000, and at least 1.5 percent of revenue, a year on R&D occurring in New Zealand.
A Callaghan Growth grant provides up to 20% public co-funding for qualifying firms’ eligible R&D expenditure up to $5 million per annum – up from the previous scheme’s $2.4 million. After two years of funding, businesses can be granted a further two-year extension of funding. All R&D must be carried out in NZ. Funding is paid quarterly, in retrospect.
I asked Callaghan for detail on Trends' R&D proposal. What will it spend the money on. In short, none was in the offing.
Callaghan spokesman Malcolm Burgess sited commercial sensitivity.
He also said, "Growth Grants are not for one R&D project but designed to encourage more R&D investment by businesses in New Zealand.
"In terms of exactly what R&D they will do going forward, we can’t say ahead of time as it’s not like a Project Grant which is for one particular project. So [it's] best to ask the company themselves."
I phoned Trends Publishing International yesterday, but publisher David Johnson (who is also a director and the company' largest shareholder) was not immediately available. He did not return a message, and staff would not give out his mobile.
As a reporter, and as a taxpayer bankrolling Callaghan, I'm curious to know how Trends will spend its Growth Grant money — which will potentially run into the millions. It might be a brilliant idea, and it might create tons of R&D jobs and high value exports. But with the total lack of transparency, I could only guess.
David, if you want some free publicity for your big idea, give us a call.
And maybe NBR will apply for a grant to further develop its paywall.*
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A surprise pick as Callaghan awards $21m more in Growth Grants
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