First time entrepreneur Kurt Broger is building a software company that makes it possible to sell tickets online and print the tickets at home. It took him four months to raise seed capital.
The news that Kurt Broger's start-up, Klicket AG, raised SFr236,000 in seed funding this quarter is significant not because of the size of the deal - it's tiny compared to some of the biotechnology seed rounds seen here this year - but because it shows that innovative firms are still being established in the information technology sector, they are still finding seed capital, and most importantly, they are still finding customers.
Statistics show that the number of new companies established in the IT sector has declined by 50 per cent from a peak in 2001 when 299 new IT companies were established in Switzerland, according to a start-up database managed by ITReseller and Dun & Bradstreet Switzerland. These are companies "limited by share capital", known as Ltd or AG firms. In 2000, there were 253 such firms established here.
This year, the number dropped to 154 firms in the same period. But by May, the decline had narrowed. Last month, some 51 new firms emerged on the IT sector, while last year it was 63 firms.
Friends and family
Broger's database and web application enables event and festival organisers to sell tickets online and have customers print them at home. When the customers get to the event, the tickets are read using a simple, inexpensive bar-code reader connected to a standard laptop.
Klicket began the search for enough capital by tapping friends and family. "That part was fairly easy. Next we found a lawyer and a customer willing to back us," says Broger, who ended up being surprised at how "deep the faith in the potential of our product was".
Klicket is up against no less a competitor than cryptography giant Kudelski through its access control division. While Kudelski is better known for its smart card solutions for the pay TV market, it has been quietly buying up privately-owned firms in various niches of the access, security, and ticketing markets.
Kudelski's last quarterly report stated that it had successfully "integrated" its acquisitions related to access control and ticketing, including the Austrian firm SKIDATA, which makes pre-paid and post-paid solutions for ski hills, swimming pools, and parking garages, as well as Sportaccess SA, whose chip cards are used in pre-paid applications.
One of Kudelski's key acquisitions in this sector is TicketCorner, a firm that has been dominating the online ticketing market in Switzerland. It employs more than 150 people, with a turnover of SFr147 million in 2000.
How will this tiny start-up compete? "We are good at selling, and our service is a good value," says Broger. He also pointed out that TicketCorner is "quite old" because it uses conventional distribution methods: TicketCorner enables only the purchasing of the ticketing online.
The tickets themselves are then mailed to customer. Furthermore, TicketCorner has been alienating some of its best customers by making them sign exclusive distribution contracts that can last for up to three years, says Broger. He adds that his solution is "cheaper, faster, and has no extra fees to pay for postage".
E-ticketing was a theme at this year's Internet Expo (IEX.ch) in January where ELCA, a Swiss IT consulting firm, showcased its SecuTix solution. Wireless ticketing specialists, Mogid, which also received seed funding this year, is stepping into the mobile market.
Using the Internet to improve the management for ticketing at public events and facilities is becoming mainstream. It is increasingly common to purchase cinema, sport, airline, bus and train travel tickets via the Web and wireless networks.
The financial performance of Ticketmaster, based in Los Angeles, is illustrative. It reports that 33 percent of the 87 million tickets it sold last year were sold via the Internet, generating turnover of $335.2 million. The California-based firm says that using the Internet for distribution and pre-sales helps its customers increase overall sales figures.
by Valerie Thompson