How Mount brothers' $30m app broke into the US market
A pair of Mt Maunganui brothers have turned their app idea into a $30m tech business, disrupting the lucrative United States sports sponsorship market.
Brendan Howell, 40, and Peter Howell, 37, founded DROPIT in the Mount in 2015, building on technology from a previous enterprise.
A reverse auction app platform, DROPIT counts down the price of an item to $0 in 60 seconds. The clock stops when someone buys it.
"When we launched in New Zealand we looked at our analytics and we were getting 92.5 per cent of users returning on a daily basis," said Peter Howell, the company's chief executive officer and father of one.
"Those metrics were as good as Facebook, any of the big players. We realised we were on to something."
They decided to go international, aiming straight for the world's biggest consumer market: the United States.
"If you can make it in the States, the rest of the world will chase it anyway," Peter Howell said.
Chief operating officer Brendan Howell moved to San Francisco and began building contacts in the city's humming start-up scene.
The company was accepted into a sought-after coworking campus for tech start-ups, Rocket Space. It was the former home of success stories including Spotify and Uber - rare "unicorns" ($1 billion companies) of the industry.
The strategic positioning paid off: a colleague talked them up to the San Francisco 49ers at a draft party at Levi's Stadium and they got an entry into one of their dream industries, sports.
It was the beginning of DROPIT's evolution into a fan engagement app, running live auctions of premium sponsored items to entertain sports fans in game breaks, projecting the action simultaneously on to massive scoreboards and user's phones.
At a major league baseball training game in March, a US$22,280 ($30,570) car sold on the app for $11,850.
Audiences loved the adrenalin-pumping, bargain-hunting action and sponsors loved seeing people actively engage with their brand instead of checking social media or grabbing a hot dog.
A distribution deal with major electronic scoreboard manufacturer Daktronics followed this year, and next month they expected to go live at a couple of new stadiums. They were also eyeing up potential shopping mall applications, long term.
In a way the ambitious brothers have come full circle, having started their careers building billboards.
Asked if they would bring their product to New Zealand, they said, "watch this space".
After being approached, they met representatives of the country's four biggest sporting codes this month. "They all want a piece of it," Peter Howell reckoned.
This year they moved the company to Miami and started expanding. They are trying to raise $5 million in new investment capital - mostly from Kiwi investors - and build up their staff to 50 people, including new hires in New Zealand.
Each brother owned about 20 per cent of the company, and their goal was to make it a unicorn, planning to spend the next three to five years "working our you-know-what's off" to get there.
DROPIT like it's hot
• App launched in the Mount in Nov 2015 • Now based in Miami • Valued at $30m • Peter Howell, 37, chief executive officer, based in NZ • Brendan Howell, 40, chief operating officer, based in US