A Dublin company has received $2 million (€1.9 million) in venture capital funding from Trinity Venture Capital, to further fuel its rapid expansion in the European customer analysis software market. Trinity has taken an estimated 10 per cent share in Norkom, valuing the company at around $20 million.
Norkom Technologies, which uses unique software to develop analytical tools for the customer relationship management (CRM) market, is experiencing rapid growth and is on target for sales of $7 million this year. This is $2 million ahead of expectations, and reflects a significant increase on last year's revenues of $1.1 million.
The additional funding from Trinity will be used for Norkom's sales and marketing drive in Europe, where it has offices in Brussels, London as well as Dublin. Mr John Tracey, Trinity Venture Capital managing director, has also been appointed a non-executive director of the company.
Since March, Norkom has doubled its sales force to 80, and according to managing director, Mr Paul Kerley, it expects to double this again by August of next year.
Norkom was reported earlier this year to be planning to raise between $5 million and $15 million over the next two years. Mr Kerley says it will now wait until early 2000 before seeking further funding. "We are currently experiencing greater growth than expected, and we've been looking carefully at our competitors and reckon a staggered approach to financing would yield a greater return," Mr Kerley says.
He added Norkom would concentrate on "ring-fencing" the European market and adding blue-chip clients to its portfolio, before entering the US market next year.
Then it will seek to raise around $13 million from a US banking or investment partner with strong connections to the insurance and telecommunications industries.
Norkom's core product, Alchemist was launched with considerable success last June at the European CRM conference in London. It led to three major deals, one of which is believed to be a key player in the Irish telecommunications sector.
Mr Kerley founded Norkom last year with the sole aim of filling the gap in the lucrative market for customer behaviour analysis software.
Current market research predicts that the CRM market will be worth at least $11.5 billion in 2002 and the analytical market will account for $4.5 billion of that total.
Alchemist takes transactional data amassed by company databases, and blends it with local demographic data to build up a clearer picture of the customer base. The technology has particular appeal for the telecommunications industry where "churn" rates - when customers switch from one telecoms provider to another - present a very big problem.
On the insurance end, Norkom can build up profiles of policyholders and estimate how much disposable income they might be prepared to spend upgrading their policies.
This year, Norkom plans to enhance the application of Alchemist to microbrowsers, including mobile phones and palm-top devices. This will boost the product's particular appeal for mobile workforces.
This is Trinity Venture Capital's fifth investment in an indigenous Irish technology company, and according to Mr Tracey: "Like many industry observers, we have been extremely impressed by the growth of Norkom and in particular its vision of where the analytical and collaborative CRM market is going."
Mr Kerley holds nearly a 40 per cent stake in Norkom, and Enterprise Ireland retains 5 per cent following a £500,000 (€635,000) investment early on. The remainder is divided between four Norkom personnel, and Mr Kerley says work is under way to implement a 10 per cent employee share-option programme.
