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Four years after its stock was delisted from the Nasdaq exchange and snapped up by a private equity investor, Axeda Corp. says it is cash-flow positive and has taken $9 million in new expansion capital.
Foxboro-based Axeda makes “smart services” software, which lets technicians remotely diagnose and service machines such as ATMs, voting machines and medical equipment. Armed with $5 million in new equity financing and a new $4 million loan, the company hopes to expand into other machine connectivity categories, using a recently built development platform on which it allows business partners to develop and sell software applications for vertical markets. “The world is starting to catch up with what we’re doing,” said founder, president and CEO Dale Calder.
With 105 employees, privately held Axeda is throwing off about $1 million in cash annually, Calder said. He declined to state the company’s top-line revenue exactly but said it is between $15 million and $50 million, and that it is growing by 40 percent to 50 percent annually. The company was formed in 2005 when JMI Equity bought the assets of predecessor Axeda Systems for $7 million. Calder had founded Axeda Systems in 1999, and in 2003 the company went public with a $112 million stock offering.
Last December, Axeda bought the assets of California-based competitor Questra Corp. for undisclosed terms.
JMI has now invested an additional $5 million in equity, Axeda reports. Toronto-based VC financier MMV Financial Inc. put in an additional $4 million in debt, MMV confirmed. “We feel there’s a very easy path for this company, given the size of order and customer they get, for this to be easily $100 million-plus in revenues,” said MMV executive vice president and co-founder Ron Patterson. MMV manages a $300 million investment fund for investors that include pension funds, private equity funds and banks. Axeda is on track to once again make an initial public offering (IPO) of stock within the next three years, Calder said.
Current customers include Agilent Technologies, Diebold Inc. and EMC Corp. Calder said Axeda’s technology could be used in smart grid, traffic monitoring, e-book readers and other telematics-related areas. Development partners using its platform-as-a-service (PaaS) offering include Deloitte, Oracle Corp. and SAP AG, the company said. “There’s probably 150 different verticals that are available to us,” co-founder and CEO Dale Calder said. “We felt the best way to achieve the potential in that area is not to do it ourselves but to power solutions in those markets.”
To that end, the company plans to continue hiring at a rate of about 20 per year, Calder said. It will be looking to hire quota-carrying sales professionals and engineers able to build high-scale computing systems. “Connectivity has become an element of every product we buy,” Calder said. “You need something to create value out of that.”
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