BroadWare Technologies Inc., launched in 1996, developed networked video installations for retailers and gas stations gained traction in its markets and raised $12.5 million from venture capitalists – all before Sept. 11. That’s when chief executive William Stuntz decided that commercial applications were nowhere near as exciting as the homeland security market.
“It’s the same technology and the same investors. We’ve already built the architecture and the product, but Sept. 11 created a new set of demands,” Stuntz says.
Restructured and recapitalized, the Cupertino, Calif.-based company has reconfigured itself as a homeland security play with a $7.5 million Series C deal behind it.
Led by a $4 million commitment from Boston-based Sigma Partners and an investment from Dali Hook Partners of Menlo Park, Calif., the round also included participation from the investors that funded the company through its previous incarnation – Defta Partners, Hitachi Ltd., McKenna Ventures, New Vista Capital and Net Service Ventures.
BroadWare’s technology can store and manage video feeds from thousands of cameras. Delaware’s Department of Transportation uses the technology to let drivers see what’s going on along the highways with real-time access to traffic cameras, while NASA has used it to monitor the satellite antennas that transmit data from Mars to Goldstone, Calif.
As a homeland security play, the company has abandoned the commercial sector and now is lining up government and defense contractors like Northrop Grumman.
The company began its transition into the homeland security sector even before it began raising this latest round of venture capital. It had hired a new sales force, one with links to military and defense contractors. It also made changes to its board of directors and repackaged its core technology to target a new market, but it held on to its management team and its venture backers.
“I’ve seen much messier deals in the past,” says Wade Woodson, a managing director with Sigma Partners who holds a seat on BroadWare’s board of directors. “In this case, there’s stability in the management and at the board level and together they knew what they wanted to do. Using the technology they already had, they evolved the product plans and found a partner to fund that strategy.” Woodson joins Regis McKenna, chairman of the McKenna Group, and Paul Dali, managing partner with Dali Hook Ventures, on the company’s board of directors.
The company will use the round of financing to add new technology to its core platform, hire a sales and marketing team to target government contractors and also add to its technical support staff. It will spend the next six to 18 months putting together contracts and bidding those out to the federal government. This round of financing provides the company with enough working capital for it to hit profitability by the end of the year, Stuntz says.
Email Carolina Braunschweig