Celeris, which produces software to protect enterprise applications against external intruders and hackers, has secured SFr5 million ($3.3 million) in venture capital.This content was published on September 26, 2002 - 13:22
The two-year-old company, based in the village of Hinwil, east of Zurich, raised the money this quarter from a syndicate of investment companies.
They include two of the most successful new economy entrepreneurs in Switzerland: Frank Ewald of BCAP and Daniel Aegerter of Armada Venture Group.
Ewald was one of the three founders who profited when Fantastic Corporation went public on the Neue Markt during the peak of the technology boom.
Aegerter became a multi-millionaire when he sold his firm to a publicly traded US-based software company, also during the boom.
The involvement of the two entrepreneurs, as well as the third investor, Credit Suisse Private Equity, is good news for the Celeris start-up.
Not only does it give the company a stamp of approval, but it will also open doors to the investors' personal networks and is likely to help Celeris find future business partners.
It may even boost sales in today's difficult market for IT services and products.
It is the first European investment for Aegerter's Armada Venture Group since he established the company on the shores of Lake Zurich almost two years ago.
Reluctant to invest
Aegerter has been deluged in the past with hundreds of business plans, but they have been rejected as they did not meet Armada's investment criteria. But this was not the case with Celeris.
Armada invests only in software companies selling to large firms with a strong technical differentiator.
That criteria alone rules out a lot of the start-ups emerging in this part of Europe where high-tech strengths traditionally lie in other areas.
Other investment criteria include having trailing revenues at around €4-5 million and having the potential to become a company with €80-100 million revenues.
Any investment should also be positioned in the early phases of an emerging market. Being based in Germany, Switzerland, or Britain also helps.
Security services automated
Celeris was founded in 2000 with the idea of providing managed perimeter network security services to enterprise and network service providers.
It developed its own software in order to automate those services, a formula that worked at Activenet, where the founding team - including Celeris CEO, Martin Altorfer - worked in the late Nineties. Activenet was sold to UUNET /WorldCom in 1999.
Today Celeris is concentrating on commercialising its software, dubbed Secopia, as well as offering managed services.
It handles a number of tasks, ranging from configuration to billing, as well as monitoring and alert support.
A similar automation strategy made Activenet a highly profitable ISP in the past, say industry insiders, as many of its competitors still did a lot of customer provisioning and support by hand.
Managing security applications and connections is simplified under the Secopia system.
It makes it possible to handle a number of disparate network security "elements", such as firewalls, virus protection gateways, and intrusion detection systems, from a single application or "dashboard", according to Aegerter.
However, there is some competition in the market, especially from US firms. But Aegerter says it is too soon to fret about it.
"Many start-ups worry about potential competition in the early phase and they are usually wrong about who will really be the competitor to beat in the sales contest once the market has matured," he says.
Therefore his advice to his start-ups is to "worry obsessively about the customers, not the competitors".
swissinfo, Valerie Thompson
Celeris has secured SFr5 million in venture capital.
Investor suggests the firm has a competitive edge and potential.
High profile investors should give firm a boost in market.
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