Airport automation startup Elenium Automation has raised $15 million in Series A funding to launch its next growth phase and jet set its technology to major airports all over the world.
The round is led by Acorn Capital, and investment director James Douglas is set to join the board of the startup.
Founded in 2015 by a group of former Jetstar employees, Elenium was founded to revolutionise the airport experience.
Speaking to StartupSmart, co-founder and chief executive Aaron Hornlimann compares airport technology to a Blackberry mobile phone, calling it “quite clunky for the most part”.
From the check-in kiosks to the bag-drop system to the boarding process, going through the airport is cumbersome, he says.
“Passengers are used to an iPhone, or the latest Android — we have cars that park themselves now — but when you go to the airport it’s almost like we’re a decade behind again.”
The startup takes a multi-pronged approach to correcting this, Hornlimann explains, providing high-tech hardware, and the software allowing airlines to use it.
“We’re a software-first company,” he says.
“The hardware is really the enabler.”
Just last month, Elenium partnered with Etihad Airways, as its self-service vendor, but also to develop its Elenium Voyager concept, which will eventually remove the need for check-in kiosks and bag tags altogether.
When Elenium started out, it built hardware designed to read a bag tag correctly the first time, every time. But for Hornlimann, that was not enough. He’s striving to take all the friction of out of the check-in process.
“I’ve been in this industry for more than 10 years now, and I still struggle to put bag tags on,” he says.
The Melbourne-based startup now has 50 airlines on board in seven airports across the world, and has contracted an additional 30, which will go live on the system within the next year or so.
Although Hornlimann doesn’t reveal current revenue figures, he does say the startup saw about $700,000 in revenue in its first financial year of trading, and $3 million in its second.
In the first 12 weeks of this year, sales outpaced the full revenue of the last financial year, he says.
“We’ve been doing quite well in that regard.”
Bang for buck
Previously, Elenium has been bootstrapped, funded entirely from the founders’ pockets.
The Series A round was completed in “multiple lumps” over eight to 12 months, Hornlimann says.
“At the outset, we were told raising funds in Australia is difficult,” he explains, as Australia doesn’t have the same kinds of mature markets you see in the US.
“We did experience that, we had a lot of high hurdles,” he adds.
Not only did the founders have to prove themselves as a good management team, but they also had to show they had a good product that was already working in the market.
When they secured the funding, “it wasn’t off of a good idea and a prototype, it was really that we already had more than 100 kiosks in the market by the time we started to raise”.
These pressures can make things difficult for startups, Hornlimann says, but “the flipside is it made us very lean”.
The whole business is built around providing efficiency to airports. And as bootstrapped founders, “we’ve had to live and breathe efficiency”.
The funding will be used for growing Elenium’s sales team. The founders have plans to grow the startup into a global business, Hornliman says, and to do that “we need to make sure we have the right sales capability, globally”.
It will also go towards making sure the business is able to support that scale when it happens.
“We have some ambitious growth plans, but at the same time, the back of house has to be able to keep up with that,” he adds.
Finally, the startup will invest in research and development, “making sure we stay ahead of the pack”.
Hornlimann sees opportunities in machine learning and artificial intelligence, Internet of Things and blockchain.
When it comes to machine learning and AI, “there’s a lot of room to apply that well in our industry”.
Currently, Elenium has a patent pending for technology that will be able to predict what passenger data will be needed, in a bid to eliminate as much waiting time as possible.
Working on technologies like this and applying them where they can be properly used is what has distinguished Elenium from its competitors so far, Hornliman says.
“How do we apply it where it’s going to have bang for buck … as opposed to trying to put it everywhere for the sake of saying we do AI, or using one of those fashionable terms?”
Turn up for the love
Now, Elenium is gearing up to an IPO, “to potentially raise more capital to supercharge our growth”, as it tries to expand into harder-to-access markets.
However, there is no firm timeline on those plans, as of yet, and there may be another pre-IPO raise.
Currently, the startup is trying to get “match fit and ready to IPO when we’re ready”, Horlimann says.
The idea is to get the company ready to IPO within 18 months. When they’re ready, they may or may not “pull the trigger”, he adds.
When it comes to offering advice to other startup founders, Horlimann’s number one tip is “you’ve actually got to enjoy what you’re doing”.
At Elenium, “we’re building something that’s actually going to be used by tens if not hundreds of millions of people”, he says.
“If that’s the driver. If you’re actually turning up to do it because you love it, then I think the rest of it, getting the business to grow and scale, is a lot easier.”
There will be challenges in raising capital, building a team, and getting the culture of the organisation right, Hornlimann says. But if you’re there because you want to be, and your staff members are too, “that’s a lot of the barriers gone”.