Albert SA retrieves SFr3 million round

Despite a tough year, CEO Beth Kasna is optimistic about Albert SA's future swissinfo.ch

Information retrieval software company, Albert SA, raised SFr 3 million from existing investors this summer in a so-called down round.

But the market has not been as receptive as hoped for the Lausanne-based software company.

The down round, a round of financing where investors purchase stock from a company at a lower valuation than an earlier valuation, was necessary following a tough year for the company.

Albert SA has missed sales targets in the previous quarters, which along with the general devaluation of technology shares, whether private or publicly traded, contributed to its reduced valuation.

But its investors still believe the company has good prospects. Even “good” venture-backed technology companies have to face the prospect of raising new money at lower valuations than their earlier rounds these days, say industry insiders.

The missed sales goals are due to adapting to a change in strategy, it started out as a web search service provider, and the general poor demand for new software in the enterprise market.

Financial bridge

The capital is meant to provide enough liquidity to last the firm until the end of the year when revenues should start to flow, or another round of capital would be required.

“It is kind of a bridge financing to compensate for lower revenues,” says CEO Beth Krasna.

Recent sales wins with Cantor Fitzgerland and Forbes Magazine in the US and another potential Euro 9.9 million in sales give Krasna reason to be optimistic.

Clever software

According to the three’year-old company, its search aplication software, which supports multiple languages, “understands” what users are looking for.

The average person does not know how to formulate an advanced search query, such as a Boolean search, only 1 percent do, says the company.

“By applying an Albert solution, businesses can drastically cut the average 8 hours a week spent by knowledge workers in searching for information,” says its documentation.

Change of Strategy

Formed at the height of the dotcom boom in 1999, Albert had originally positioned its software as a web-based tool, a strategy that relied on earning advertising revenues.

It raised more than $23 million in earlier rounds of venture capital funding from the likes of the TAG Group, Trust Capital, Bank Pictet, FAST and Christian Mustad.

The young firm had to abruptly change its strategy and its software when the bottom fell out of the web advertising market. That process took until this time last year, according to Krasna.

Stiff competition

The Swiss search tool startup faces stiff competition from the likes of Mondosoft, Autonomy/Verity, and even Google, the well known Web search company, which recently entered the enterprise market.

These are not insignificant competitors. Daniel Aegerter, founder of Armada Venture Group in Zurich, told Swiss Venture he would be worried if he had to face Google in a sales bid.

But Krasna is unfazed. She says, “We’ve had wins against even big players such as these. We have a few unique selling points, such as a federated search capacity.”

The software vendor, which currently employs about 50 people worldwide expects to prove that its “new strategy is working by generating significant sales announcements by the end of the year”, according to Krasna.

In a game that just might be won by the last man standing, Krasna points out that a lot of her firm’s “other competitors have gone out of business”.

swissinfo

Key facts

Innovative search software vendor raises SFr 3 million
Lower valuation in this round due to tough market conditions
New strategy and international markets targeted
Early investors still confident