NitroSell raises €1.5m funding
8th April 2007
The recent completion of a €1.5 million round of funding by Cork-based company NitroSell brings to over €3.8 million the total amount raised by the company since its establishment in 2005.
Software-as-a-service (SAAS) provider NitroSell enables retailers to integrate their traditional shop-based sales channel with a web store.
Tom Keane, president of NitroSell, said the company was operating against a backdrop of massive increases in e-commerce activity.
The latest round of funding by the company includes €750,000 from venture capital company Enterprise Equity.
The venture capital firm backs companies that are based in the regions and has invested €5.5 million in 14 companies in the past 18 months.
Frank Walsh, investment executive with Enterprise Equity, heads up the venture capital company’s Cork office. He said the ‘‘global standard’’ of NitroSell’s management team made the company an attractive investment prospect.
NitroSell’s chief executive officer, Charles Garvey, was formerly chief executive of Horizon Technology.
Also featuring on NitroSell’s board are chairman Ron Downey, the founder of Kindle Banking and financial software company CR2, and non-executive director Colin Newman, cofounder of Iona Technologies.
Prior to this round of funding, NitroSell had raised approximately €2.3 million since 2005.
This money was a combination of funds from Enterprise Ireland and private investors, according to Tom Keane.
Enterprise Ireland provided about half the funds, with the rest being matched by private investors.
Keane said the company’s key target market was small and medium-sized retailers, which have the potential to make big advances on the back of e-commerce.
‘‘You grow as they grow,” he said.
He said NitroSell is well positioned in the retail sector since the company’s management team has been working in various capacities on retail software solutions since 1999.
The SAAS model replaces the more traditional software as-a-product business model.
Traditionally, a consumer would purchase a CD-Rom with their desired software product. Using NitroSell’s technology, consumers can access software online.
The software is hosted on NitroSell’s secure server and all product updates are automatically fed to consumers.
Rather than a one-off payment for its products, NitroSell operates on the basis of an initial fee, plus monthly charges. As such, it secures a recurring flow of income. Currently some 70 per cent of the company’s sale are in the USA. The close ties with America make it an obvious choice for further funding.
According to Keane, the company has already received approaches from a Boston-based venture capital company which wishes to invest in NitroSell. He said that for the moment, Nitro Sell was not seeking any additional funding.
For now, the company’s key challenge is to keep its focus and build the business, Keane explained.
Both NitroSell and its investment partners Enterprise Equity are confident that the company will grow strongly over the coming months. At present, the company is selling its multi-channel sales solution at a rate of one per day, but this rate is exponentially increasing, according to Keane.
To date the company has web-enabled over 500 retail businesses.
With predictions for strong growth on the horizon, NitroSell has already considered its exit strategy. Keane said the company would potentially be of strategic importance to any of the big players; he mentioned Microsoft as being a potential buyer. Frank Walsh, of Enterprise Equity, said it was hard to predict, but he believed that in two or three years, NitroSell could fetch a market price of ‘‘tens of millions’’.
NitroSell is a certified partner of Microsoft and, since 2005, it has trained over 180 resellers of Microsoft Dynamics retail management systems software. Through its partnership with Microsoft, the firm can provide multi-channel sales solutions for retailers.
Walsh said retailers are open to the shift in the retail market.
‘‘The web complements an instore retail business, rather than killing it,” he said.
Nitrosell has its headquarters in Cork, but also has offices in the USA and Britain. It employs 20 staff, split evenly between development, support, sales and management.