Why iCetana chief Chris Farquhar raised $8 million for a company that’s been profitable for years
Monday, May 22, 2017/
The chief executive of Western Australian video surveillance software firm iCetana says the company had been profitable for years but the $8 million in external funding it secured this month will strengthen its position as a global player.
The round, led by Perth’s Go Capital with participation from Yuuwa Capital, DelCor and angel investors, brings iCetana’s total funding raised to $9.4 million.
iCetana, located in Subiaco and Dubai, provides a system that uses machine learning and computer vision to help alert surveillance camera operators to “abnormal” activity. The company’s turnover was just shy of $5 million in 2016, according to its chief executive Chris Farquhar.
“We’ve proven our business is profitable … [but] technology has a closing window of opportunity until someone tries to replicate what you’re doing,” Farquhar tells StartupSmart.
With the company’s client base spread across 10 countries, and focused in its key growth markets in the US, Europe and Middle East, it’s a critical time for the company to accelerate customer and market share, Farquhar says.
In addition to growing iCetana’s 20-strong global team, the most recent investment will be invested into partner and channel development as well as marketing, he says, with the aim of getting the company to a “point of acquisition” or an initial public offering in two to three years.
Prior to this, Farquhar says the company spent its first three years in commercialisation after emerging out of Curtin University research.
“It didn’t have a founder [in the traditional sense, rather] a research group that applied the core algorithm to video surveillance,” he says.
Yuuwa Capital originally invested in the technology to develop it into a company.
“It was pretty much a commercialisation exercise, building the software to a point it was ready to deploy to customer sites,” he says.
Reflecting on the investment process, Farquhar says taking time to put together clear documentation for investors is critical and it really smoothened the fundraising experience for iCetana.
“We put a lot of work into our documentation,” he says.
“We have a very good investor document, which described the opportunity very well and it also showed what our growth plan was going to be.”
Founders will be well primed to respond to investor questions if they have a robust understanding and can provide a clear picture of their venture’s financial and business model, he says. This includes knowledge of competition, profitability and whether revenue is recurring or capital-based.
Farquhar says iCetana’s latest investment round took about six months to close but the funding could have been secured earlier if the company wanted to.
“Because we’re already making strong revenue we weren’t raising the capital to keep the lights on,” he says.
“We could’ve closed in four months but gave it a bit more time.”