Telecom New Zealand invests in app startup

Telecom New Zealand’s startup incubator, Telecom Digital Ventures, on Monday made a strategic investment in mobile application developer App La Carte. App La Carte was launched in November 2012 when its founders spotted a gap in the market for businesses and organisations prepared to pay a monthly subscription to use an easy-to-use app builder to put together their own app.

The incubator believes that connecting to and engaging with customers through a mobile platform is now a vital part of many businesses’ service offerings and App La Carte doesn’t have the significant development costs associated with traditional builds.

“Businesses don’t need to be intimidated about developing an app. These days apps are like the front window for your shop or as important to your brand as an advertisement in the paper,” said Telecom Digital Ventures CEO Rod Snodgrass.

Telecom Digital Ventures has made an investment in App La Carte for a minority 20 per cent stake, with options to increase to 40 per cent and includes an additional product offering to Telecom’s SME and corporate customers.

Chair of App La Carte, John Holt, said: “This is a software-as-a-service platform. Customers, who range from large corporations, plenty of SMEs and even non-profit and public sector organisations, can log in and create a unique looking mobile app without needing to code.”

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App La Carte has been in business for 18 months and already has 150 customers ranging from the Wendy’s national restaurant chain to local cafe loyalty schemes. Services start from $60 per month, which includes the cost of keeping the app up to date on the app store or Google Play. Traditionally apps with similar functionality to App La Carte have cost as much as $60k to produce and required expensive maintenance and updates on an ongoing basis, Holt said.

The company said it has had interest from a number of global telecommunications companies, such as Telstra, Swisscom and KPN, who see potential in the model.

Around 60 per cent of mobile customers now use a smartphone, Telecom said, adding that the average data use per using customer on the Telecom mobile network in April 2014 was 465MB per month, up from 411MB in March – representing a 13 per cent increase.

In 2013 Telecom Digital Ventures signalled its intent to invest in a number of companies to extend its traditional business. The first was a $5m investment with Sir Ray Avery’s biometric technology company Vigil.