Limerick firm's journey from start-up to global leader
So how does a tech start-up become a global leader? The fundamentals for growing a technology company with an international footprint would be familiar to most would-be entrepreneurs at this stage. It starts with customers and then moves on to funding rounds, venture capitalists and maybe even acquisitions. Putting theory into practice, however, is easier said than done. Successful start-up stories are thin on the ground.
Jimmy Martin and Austin Ryan have a good one to tell. On the journey for 11 years now, they have manoeuvred their way through all of the above stages with a good deal of aplomb, recently raising €23.5m in the latest funding round for their Limerick-headquartered company, Advanced Manufacturing Control Systems Group (AMCS).
Back in 2003, Martin was working as head of automation for Analog Devices and Ryan was a software engineer for Ericsson. They met playing hurling and soon discovered they had more in common than sport. Gut instinct told them that there were opportunities around emerging mobile technologies, so evenings and weekends were soon devoted to developing RFID and tracking software. They would become pioneers in facilitating access to data on the move with on-vehicle technology.
"All we were was two young fellas who met at hurling and had an idea," says Jimmy Martin. "We were both interested in business and felt we had got to a stage where we should try something." Just over a decade later they have 178 employees, offices in six countries and a turnover of close to €30m.
The first step on the road was to target the waste industry after an Enterprise Ireland-funded feasibility study identified the sector as a good fit for its technology. "The sector was changing from being a transport and logistics industry to more manufacturing-oriented and process driven. We felt we could add a lot of value," says Martin.
Then came the first customer. Clean Ireland Recycling in Co Clare was prepared to pay for a pilot and get involved in its development. "It was a huge stage," says Martin. "They were very entrepreneurial and taught us a lot about the industry. They shared our vision and we worked through the pain of developing the first product together. To this day we have a very loyal partnership and develop products together."
Other Irish customers followed but Martin and Ryan realised two things were needed to grow the company. They had to expand out of Ireland, simply because it's too small to sustain a niche technology business, and they needed to move from integrating off-the shelf components to developing their own technology. "We needed a couple of million euro to internationalise the business because it was obvious pretty early on that we wouldn't get the return we needed out of Ireland," says Ryan.
Having taught themselves to compete in the waste industry, the next learning curve was coming up with a business plan that could convince potential investors of their worth. They impressed Michael Murphy, a partner at Investec Ventures.
"We felt they were addressing a potentially interesting market because there were significant EU directives emerging covering waste and recycling," he said, "but what really impressed us was their energy and passion. From the day we met them we wanted to back them."
Jimmy Martin had clearly grasped the fundamentals of pitching to investors. "You have to understand who they are and build a relationship with them. In that sense it's no different to selling to a customer," he says. "People invest in a technology but mostly they are investing in people. They have to trust you and understand you are prepared to go through the pain barrier to deliver."
In a €1.5m investment round, Investec Ventures invested half a million from its Ulster Bank Diageo Venture Fund. It was the beginning of a relationship that is still going strong, something that Martin puts down to having a shared vision.
"We meet every month and update them on the business and the strategy. They understand our passion. If you have a potential investor who doesn't get that, then move on," he says. "There have been difficult times along the way but we have all stood together and arrived at conclusions that have always been best for the business. That's what it's all about."
Revenue grew as more customers came on-board. Offices were opened in the UK and Scandinavia. But it was not always plain sailing. An ill-fated attempt to enter the American market gave AMCS an invaluable lesson in expansion strategies. "The first time we tried to do it was from a distance, going through someone else," says Martin. "But you have to go direct. You have to go in on the ground, understand what customers need and learn the nuances of the market to deliver on that need."
Today, AMCS has over 500 customers in North America and it's the company's fastest growing market. Part of the US success can be attributed to another step in the start-up journey: acquisitions. AMCS negotiated two opportunities with relative ease. They knew the companies well - one in Scotland, the other in the US - and recognised the different benefits that owning them could bring, one for their technology and the other to grow market share.
Buying PC Scale Technologies in the US was facilitated by the €23.5m investment round that brought Highland Capital Partners to the table with Investec. Part of the process was to replace another investor that had chosen to cash in. AMCS needed all its backers to be aligned and focused on the same strategy, ready for the next cycle of growth rather than looking for an exit.
"We're not for sale," says Martin emphatically. "We're number one in the world but we're still not a massive company.
"The sector we're in is only now understood as a unique vertical in its own right that requires unique solutions."
"The company has gained traction because it is delivering technology that meets the real needs of operators in the recycling and waste management industry," says Investec's Michael Murphy. "We look forward to the next phase as AMCS further internationalises the business and grows the value of the company."
Jimmy Martin remembers the early days and the hours spent driving around Munster meeting customers. Then it was all around Ireland. Now it's a plane and it's all around the world. "That's how it evolves and I'm more passionate about this business than ever," he says. "We've not even thought about an exit strategy. We're miles away from it. What we are thinking about are the next stages in our growth cycle."
This journey may still have some way to go.