Zutec seeks up to €20m from new investors
Dublin construction software group is seeking to raise cash to grow its technology offering, writes Jill Godsil
Dublin-headquartered construction software firm Zutec is poised to move into the next stage of growth, and is seeking between €15m and €20m to make this transition.
Zutec founder and chief executive Brian McGuire is switching from day-to-day operations into the position of chairman as he leads his company into the next growth phase. Co-founder Sinead Branagh will take over as chief executive.
"Our technology, sales and cash are all in order," says McGuire. "Now it's time to take the next step. I already have meetings with US investment funds as of next week and will expect to see these negotiations to be completed before the end of the year."
Irish technology and software companies ranging from Movidius to FieldAware have raised significant sums from US investors over the last year. Indigenous Irish technology and SME firms raised €401m from venture capitalists in 2014, which was an increase of 41pc on the previous year, according to an Irish Venture Capital Association VenturePulse survey.
The survey showed 2014 was the best year for Irish SMEs raising cash in the last decade.
Founded in 1999, Zutec started out with a simple idea to take the paperwork out of the construction business. But rather than underpin product development with funds sourced from VCs, McGuire used proof of concept to self-fund the initial design - and then used customers to develop the product further.
"VC funds demand a return on investment, whereas customers demand the best product possible," says McGuire. "There is no contest in the different quality of the resultant product development."
Self-funding the company is a slower growth curve but it eliminated the cash-burn beloved of start-ups in the Eighties and Nineties. In contrast to the restrictions placed on VC-funded operations, the Zutec management team was not tied into endless boardroom meetings where return on investment rated higher than profitability.
"And even when we did look to profitability, it was not to repay hungry investors, but to feed back into the company - ensuring we were committed to ongoing product development," says McGuire.
A mature Zutec went for BES funding in 2010 to invest in further research and development, repaying the guts of €1m over a four-year period. This funding was also used as a bridgehead to open markets in the UK, Australia and the Middle East. The company already has an office in Mumbai in India.
"We are debt-free, technically agile and have customers across the globe," says McGuire. "We have reached a point where we can either seek to be bought out or invested in further.
"As an Irishman, I want to keep Zutec Irish and so we are looking for capital rather than an exit strategy. I want Zutec to remain Irish, retain its Irish headquarters and continue to promote Irish skills on an international scale."
Zutec's technology is mobile, tablet and smartphone compliant and connected. The next stage is to expand its technology to take advantage of the 'internet of things'.
In simple terms, this would allow Zutec-enabled intelligent buildings to monitor and modify energy usage, for example, link fridges to supermarkets where supplies are automatically replenished or to alert car owners to available parking spaces. Zutec aims to have its technology close the gap between buildings and service without the need for human intervention.
Sunday Indo Business