PayPal founder backs ANZ-US submarine cable project

Stuart Corner
Thursday, 13 January 2011 14:51

IT Industry - Deals

Pacific Fibre - the New Zealand company founded last March to build a submarine cable linking Australia, New Zealand and the US - has secured investment from PayPal cofounder and former CEO Peter Thiel.

The company announced yesterday that it had closed its fourth round of financing raising $NZ5.5m from Thiel's New Zealand Investment vehicle, Valar Ventures, and existing external investors. It is Valar Ventures' second investment in New Zealand, following a $NZ4.0m placement with Xero in late 2010.

Pacific Fibre CEO, Mark Rushworth told iTWire that the latest round took the company's total equity funding to about $NZ6.7 million. In addition to the equity investment New Zealand Trade and Enterprise (NZTE) is contributing to the cost of feasibility studies evaluating foreign investment. (NZTE's Strategic Investment Fund provides up to $250,000 in matched funding for feasibility studies when the project has good prospects of generating significant economic benefit for New Zealand.)

Rushworth said that Thiel and Valar Ventures' US west coast networks and Wall Street experience "will be a great help to us as we enter the major financing phase, and their commitment to helping technology companies strongly aligns with our founding purpose."

Pacific Fibre unveiled its plans last March saying it was planning to build a two-fibre pair system with a capacity of 5.12tbps, five times the current capacity of Southern Cross, at an estimated cost of $US400m.

The company was founded by Stephen Tindall; Sam Morgan; Rod Drury; Mark Rushworth, former Vodafone NZ chief marketing officer; technology industry veteran John Humphrey; and strategy consultant and entrepreneur Lance Wiggs.

MYOB founder, Craig Winkler, was named as one of a number of new investors in July and Asian regional cable network and data centre operator, Pacnet, announced in July that it would join the project. It will take ownership of one of the two pairs and, ultimately, will provide half the $US400m funding required to build the system.

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