Software company goes with the flow

While the hard-pressed taxpayer may be in uproar about water charges, it's water that will be the lifeblood for Ultan Technologies, writes FIONA REDDAN

THERE’S LITTLE that’s unusual about the genesis of software company Ultan Technologies. Like many of today’s entrepreneurs, its founder, who felt the full force of the recession in his previous job, invested his subsequent redundancy package in the business.

Now however, the company stands on the cusp of moving from a start-up to a fully fledged business, as it aims to crack the US utilities market. And while the Irish public might be in uproar about the impending water charges, water will be the lifeblood for Ultan Technologies.

Founder Cathal Brady had been working for furniture brand, McNally – Design for Living, when the downturn hit. And like many furniture businesses, McNally started to suffer. “When the crash came the contracts just disappeared,” he recalls.

So, faced with a choice of managing a couple of the company’s stores, or redundancy, Brady opted for the latter and the chance of going out on his own.

“I always would have had that inclination anyway,” he says. But he had no clear idea as to what he would do, so in the early days of 2009, given his background in IT, he focused on building up consultancy work, with the aim of looking to develop a new product.

As part of his consultancy work he worked with a water scheme that was looking for some new technology.

“But there wasn’t a product available to match requirements,” he recalls. So, he wrote up a spec as to what kind of product might suit them, and decided to develop it himself.

Ultan Technologies was created to develop software products to enable water schemes to bill and manage customers more efficiently.

A place on DIT’s Hothouse programme duly followed, and Brady embarked on developing the product while, at the same time, keeping his hand in consultancy to keep the cash coming in.

He has long seen significant potential for the concept, pointing to the fact that in Ireland alone, there are already 1,300 group water schemes dotted around rural Ireland, such as Erne Valley in Cavan and Cappagh in Limerick, which service domestic customers. While some schemes may too small to benefit from Ultan’s technology, Brady reckons that of the software could benefit about 700 of them.

“There is a fantastic market opportunity for this product, and for other spin-off products,” Brady says.

And what of the impending domestic water charge that has caused such furore?

Brady doesn’t expect the new Bord Gais supplier, Irish Water, to unilaterally take over the existing group water schemes, which could diminish the size of the market. Minister for the Environment Phil Hogan recently commented that it would be up to the group water scheme itself “to seek to be taken over if it so wished”.

The US is another key market, and Brady likes it because it’s so fragmented. There are some 50,000 water utility companies in the US, although he says about 28,000 of these would be realistic targets for Ultan.

Moreover, other opportunities could develop in utilities such as sanitation, electricity and gas because while his software is built with water companies in mind, it can be modified afterwards for other utilities.

“Our product is hosted in the cloud, which gives a huge amount of benefits in terms of costs and access to hardware, and being able to scale,” says Brady, noting that most of the competing products in the market aren’t hosted this way.

Brady has high expectations for Ultan, and is targeting recurring annual revenue of about €14 million within five years.

“It’s a huge leap, but I think the company is capable of catching on like that,” he says, noting that this will be possible if it captures 15 per cent of the adressable water market.

To achieve this goal, funding will be essential. “We’re profitable now, and we could continue to be profitable and grow slowly, but we want to get into the States and we need cash to do that,” says Brady, adding that the company is looking to raise about €500,000.

But given his recent experience at the Docklands Innovation Awards, Brady should have little to fear from presenting in front of potential investors.

Having entered Ultan Technologies into the competition, Brady was invited to present along with two other start-ups (Team Traders and Traders Now) in front of industry experts such as David Sneddon, a director at Google, and Debbie Rennick, director at ACT Venture Capital.

Brady was duly rewarded for his efforts with the €10,000 prize for “Best Investment Proposal”, putting him in good company – last year’s winner, Foxframe, featured as one of the top 60 technology companies to watch in 2012 by the Wall Street Journal. And the prize may yet be worth a lot more than the cash prize.

Following his win in the competition, he has been approached from several angel investors and seed capital funds.

A key selling point for Ultan is that it already has revenues coming in with four customers on board already for its water software, and the intention is to drive both parts – consultancy and product development.

Ultan currently employs four people in Ireland, with another four working on development in the Ukraine, but if the plans for funding go ahead, the company will need additional resources – if they can find them.

“It’s very difficult to get IT staff,” Brady says, adding, “we need to get people in and in the short-term we should get people in from abroad.”

In this respect, Brady agrees with Sean O’Sullivan of Dragons’ Den and cloud computing fame, who recently suggested that Ireland should look at taking in about 75,000 skilled emigrants on an annual basis, who could help bring in potentially €1 billion in extra tax revenue for the exchequer annually.

“I see it as a very big opportunity,” says Brady, adding that these professionals might start up their own companies and create further employment. Indeed, on his Hothouse programme there were a number of foreign professionals who had come to Ireland to work with Google.

“It’s a very good opportunity for this country to get very very skilled people in,” he says, “but we need to make it easy for these people to come here and apply their skills.

For now, Brady’s plans are to get financing to bring Ultan to the next stage. After that, he will be hoping he also follows the usual path of new companies.

“Grow it so much to pay dividends to investors and sell it onto larger players. And then move on.”