In three years, tech startup We Are Indigo received over $5m in government contracts. Now, two confidential reports into the firm have caused a major storm and at least one high-profile resignation, writes Anna Rawhiti-Connell in this excerpt from The Bulletin. To receive The Bulletin in full each weekday morning, sign up here.
Multiple OIA attempts made to obtain reports leaked to The Spinoff
Some of you may have seen the news over the weekend about the resignation of Rachel Kelly from the board of Callaghan Innovation. Though not explicitly named in her LinkedIn post, it’s understood the resignation is connected to Callaghan’s handling of due diligence reports into celebrity-backed New Zealand tech firm, We Are Indigo. Despite multiple Official Information Act requests, Callaghan has declined to release the reports. Two reports have been leaked to The Spinoff. They contain a lengthy list of troubling allegations. This morning Duncan Greive unravels the saga in an extensive report involving both small startup founders and major figures within our innovation sector.
We Are Indigo strongly rejects allegations contained in reports
We Are Indigo was founded by former Xero executive Pat MacFie, former boxer Monty Betham, and former Icehouse chief executive Andy Hamilton in 2019. Funding received by the companies through government contracts totals over $5.5m. As Stuff’s Daniel Smith reports, much of the conflict Greive extensively details has played out on LinkedIn but has now blown up and is playing out in the public arena. We Are Indigo has strongly rejected the allegations contained in the reports.
Investigations led to We Are Indigo not being selected as Callaghan provider
As Greive writes, this is a story that’s been bubbling away within New Zealand’s tech sector for some time. In June, NBR’s Maria Slade reported (paywalled) on legal action taken against We Are Indigo by Dunedin-based digital marketing agency K&J Growth over unpaid invoices. Slade followed up in September (paywalled) with another story about Callaghan hiring private investigators to carry out due diligence on potential providers. As a result of those investigations, We Are Indigo was not selected for a start-up support scheme. Despite the Ministry of Business, Innovation and Employment being informed of the issues with We Are Indigo in June, a month later it was successful in winning a contract for work from Creative NZ.
Callaghan aware of allegations of bullying by some players in startup ecosystem
Callaghan Innovation is the government’s innovation agency. It is majority funded by the government. In a statement released yesterday it outlined that the due diligence reports were a response to concerns they had about allegations of bullying within the startup eco-system. As BusinessDesk’s Pattrick Smellie reports (paywalled), We Are Indigo has attracted high profile support, with the prime minister and a range of well-known New Zealanders appearing in a small buisness “love letter” video in the early stages of the pandemic. National’s Simeon Brown has been asking questions about it. Minister for small business and economic development, Stuart Nash has been following the situation. Sir Ian Taylor has been involved. As Greive writes, many high profile people are in the blast zone on this one and the fallout is likely to continue.