French firm helps Celtrak raise €1.5m in new funds
17th February 2008
Galway based IT firm Celtrak has raised €1.5 million in a new funding round led by Egis, a French engineering company. Egis provided €1million of the total raised, while the balance came from existing investors, which included Enterprise Equity, Bank of Scotland and company founders Joe McBreen and Frank Clancy.
Celtrak’s core business is developing vehicle tracking systems which are used mainly in the transportation sector.Vehicle positions can be relayed to a central operations centre using a combination of global positioning systems and mobile data networks. Padraig Kenny, Celtrak chief executive said that the company had already been working in partnership with Egis prior to the investment.
‘‘The business needed a change of strategy, as the fleet management sector we were working in was too small to justify serious R&D investment. Egis approached us and asked us to partner with them on a bid for the National Roads Authority’s Information Exchange Agent. This is a system which exchanges data between different toll operators and ensures that electronic tags work across a variety of toll roads,” he explained.
After successfully bidding for the NRA contract, Egis agreed to invest in Celtrak and the two companies are now collaborating on developing further projects internationally.
“Egis operates in forty countries around the world and comes across opportunities that we never would have had access to. The primary value of their investment is the strategic partnership we now have,” said Kenny.
Celtrak itself has begun to broaden its product range and is moving into international markets in its own right. “We have been aggressively targeting the UK recently and instead of focusing on smaller companies have begun to target utilities and civil engineering firms,’’ Kenny said.
The Egis investment was finalised late last year and came after the company’s most recent accounts revealed a €72,800 deficit in shareholders’ funds. Celtrak recorded a €470,000 loss in the year to March 31, 2007, bringing accumulated losses up to €2.1 million.
A note to the accounts said that after the end of the year, the company continued to incur trading losses, but at a greatly reduced level. It said Celtrak had received €250,000 from existing investors and was in the process of negotiating further funding from a third party investor, which subsequently transpired to be Egis.
The initial €250,000 was in the form of convertible loan notes, which were converted to equity at the finalisation of the funding round.
Celtrak was spun out of Connaught Electronics (CEL) in the late 1990s. CEL, which developed electronic components for the vehicle industry, was sold last year to French industrial group Valeo for an undisclosed sum. McBreen and Clancy were also co-founders of CEL and had significant stakes in the company.
This is the third major round of funding the company has completed. In 2005, it raised €1.2 million from Enterprise Equity, Enterprise Ireland and its founders. ICC Venture Capital, now owned by Bank of Scotland’s parent firm HBOS, was a first-round investor in the company.
The Sunday Business Post