CameraMatics
UK investor Puma Private Equity has given CameraMatics a new lease of life and provided firepower to expand,
CameraMatics co-founder Mervyn O’Callaghan was a relieved man when he announced completion of a €4m funding round in January 2021. The funding journey had skidded to a halt in March 2020 after an 11th hour withdrawal by a key investor. “We were at the point where we were just waiting for the money to land in our accounts and then Covid lockdown hit,” O’Callaghan recalls.
“One of our main investors was worried about how Covid-19 would impact on their investment portfolio, so they put all new investments on hold. We had already committed to expansion based on the fundraiser, so this really knocked us. We ended up having to go back to other investors that we had turned down. It was a very tough situation but we got lucky and managed to convince them to invest.”
In January 2020, the business looked to be in a tight spot. Accounts to end January 2020 for operating company Mysafedrive Ltd disclosed a loss of €730,000 on turnover of €2.4m, and that was after capitalising payroll costs of €700,000. Year-end cash was €12,000 and total liabilities amounted to €2.4m, including a convertible loan note of €1m. Trade debtors were down from €340,000 to €150,000 year-on-year, while trade creditors had expanded from €480,000 to €800,000.
A year later and CameraMatics is flush with cash. Puma Private Equity, with offices in London, Liverpool and Edinburgh, led the recent funding round, while existing investors Sure Valley Ventures and Enterprise Ireland also followed on. Sure Valley previously invested €250,000 in 2017 and the state agency invested €250,000 in 2019, the same year that O’Callaghan and Murray were selected as finalists in the EY Entrepreneur of the Year competition.
What’s attracting investors to CameraMatics is its fleet management software. The platform collects journey and location data so that fleet managers can keep tabs on their fleet vehicles. Accidents can be reported immediately and checklists keep managers and drivers up to speed on safety and compliance issues.
According to O’Callaghan, insurance companies are putting pressure on fleet operators to improve their safety, while government initiatives in the UK, the US and elsewhere promote truck driver safe behaviour in cities by insisting on the installation of driver monitoring and safety technology.
O’Callaghan (58) is an ACCAqualified accountant and began his career by moving to the UK in the 1990s. “The roles I worked in used my financial background but were never really finance or accountancy roles,” he says. After a spell as a telecoms analyst with Morgan Stanley, he joined Carphone Warehouse, and was managing director of the Ireland business until 2002. After that he ran a call centre for Rigney Dolphin before establishing his own venture in 2007.
EDrive installed hands-free car kits and basic geo-tracking into vehicles. The business was established in Waterford and providing outsourced technical support and customer service for most of the telematics and driver safety tech companies operating in Ireland and the UK.
At its peak, eDrive was installing driver safety technology in 15,000 vehicles every month. “We had 120 people in a call centre in Waterford providing customer support for the installations, along with engineers on the ground in Ireland and the UK. Only eDrive and a UK rival called RS Fleet Installations had the scale to tender for large contracts,” says O’Callaghan.
“RS Fleet attracted private equity investment and we sold them eDrive in 2016. Through eDrive, we gained insight into the fleet technology and we had run a lot of campaigns for insurance companies that promoted
using this technology to reduce premiums for drivers.”
The eDrive operating company had a net worth of €230,000 when it was sold, and O’Callaghan retained part of the company’s activity. He had been partnering with Simon Murray, whose Universal Graphics was the market leader in Ireland for vehicle wraps and branding. “Although eDrive was based in Waterford, 95% of our business was in the UK,” O’Callaghan explains. “Simon wanted to expand into the UK, while we wanted to grow our Irish business. Bringing the two companies together looked like a natural fit. When we sold eDrive, we stripped Universal Graphics out of the deal.”
Murray and O’Callaghan then focused on developing CameraMatics, which was originally called ProVision. “From our experience working with fleet and insurance companies, we knew that the driver monitoring and safety technology tended to be standalone and insufficient, so we worked on developing a connected technology solution.”
Neither of the founders were technically minded, so they drew their ideas on paper and then hired software engineers to make them a reality. “We had drawings to represent every ‘screen’ we wanted on our system and where we wanted the user to be taken if they clicked on it,” O’Callaghan says. “We had to rely on the skills of our technical team because it wasn’t like we could evaluate their coding to see if they were on the right track.”
“We sourced our hardware components, such as cameras and trackers, and sold them while explaining the software system we were going to lay on top. That approach clicked and we were generating revenue within 12 months.”
The venture struck up partnerships with hauliers’ groups to push its driver safety technology from the perspective of lower insurance premiums. “Everyone was looking for ways to show insurers that they were trying to reduce fleet driver risk,” says O’Callaghan. “We started selling through the large commercial trucking dealerships, giving buyers the option to install our technology at the point of ordering. Once we established that connection with buyers, we could offer them a retrofitting service for their older fleet vehicles.
“The other main sales route for us is through insurance companies. They pushed some of their customers to us to install our system. We’ve had some insurers tell fleet owners that they won’t insure them unless they install our product.”
The business prioritised the UK from the outset and it remains the venture’s main market. The company launched its platform in the US in early 2020 but parked plans when Covid hit and funding stalled. Puma’s cash will help with securing a toehold in America and the company is also now active in the Benelux region, Germany and Australia.
Brexit’s impact has been indirect and positive, says O’Callaghan. Increased fleet investment among haulage and logistics firms is bringing more business, while the increase in home deliveries is also helping with revenue. “Our business model is like a mobile phone company – the more vehicles our customers have, the bigger our contract.”
The blue-sky prospect of driverless vehicles doesn’t unduly concern O’Callaghan either. “Every time we go to an investor pitch we get asked the same question: ‘Will your driver safety technology even be required in a few years if vehicles are going to be driving without drivers?’
“Vehicles driving around with nobody in them will still need a system for reporting. Also, there will never be fully autonomous driving because commercial vehicles manoeuvring on city streets need drivers for loading and unloading. On the plus side, if vehicles are being manufactured with more sensors and cameras, it will be easier for our system to take data feeds. That will take away the hardware installation element and allow us to offer a pure technology solution.”
‘There will never be fully autonomous driving’