"All our major shareholders participated in the round, along with one new major external institutional investor. We were fully subscribed and raised all that we were seeking," says Embotics CEO Jay Litkey, noting that the firm isn’t disclosing the actual amount for competitive reasons.
It’s been busy at Embotics, which makes software that helps companies control costs and IT performance by automatically managing their virtual servers from creation to destruction.
The firm – named an OBJ Startup to Watch in 2009 – just released the newest version of its flagship V-Commander technology, adding the ability for users to automate the creation of virtual servers and measure the effect of those new servers on their capacity and performance, and the new funding will help Embotics grow international sales and marketing for the product, Mr. Litkey says.
The company expects to add roughly 10 new staff over the next year, with plans for inside sales and engineering jobs in Ottawa and sales and marketing hires for its U.S. and Europe operations.
"Quarterly, we’re seeing our business double; in many markets seeing business double year-over-year is good, but we’re actually seeing it every quarter," he says, adding that Embotics had a 100-per-cent customer retention rate last year, with clients either renewing their maintenance or putting in repeat orders to expand.
Embotics also expects to be able to announce new partnerships with "big brand names" this year, representing the fruit from its channel program.
Mr. Litkey says the company benefits greatly from being in the hot virtualization and cloud computing space, which is currently topping the list of IT focus areas for many companies. Businesses are increasingly turning to virtual servers to save the cost of having physical computers in data centres, but as those virtual machines can be created and removed with the click of a mouse, they require software such as V-Commander to keep track of them and ensure they aren’t clogging up IT resources or causing unexpected downtime.
Embotics got its timing right as well, with its choice to invest a significant amount up front on the infrastructure needed to ensure V-Commander would be both robust enough to support clients and scalable enough that customer growth wouldn’t outstrip the technology’s capacity.
All those factors have combined to make Embotics an attractive prospect for investors, Mr. Litkey says, which meant it wasn’t as challenging for the firm to raise money as it might have been for other companies in this climate.
"We have never had an issue in this company getting financing, largely because we are in this hot market, we have a great team, and we’ve been executing properly," he says.
Even at the height of the economic downturn in December 2008, Embotics was able to secure its previous round of funding, of which this most recent financing is an extension.
Mr. Litkey notes the company isn’t profitable yet, as it’s choosing instead to grow aggressively.
"It’s always a balance between growing to expand market share and maintain a leadership position, and achieving profitability. It’s a month-by-month, quarter-over-quarter decision, but yes, we could get there. It’s a wonderful position to be in."