By Gayle Bryant - Friday, 12 May, 2000
Capix
To be successful as an e-commerce company requires patience and perseverance, according to Peter Cooney, managing director of Capix, a diversified online treasury services company. Cooney, a former treasury manager at ANZ Banking Group, says running the company has involved a lot of hard work and stress, but he would not have had it any other way.
Capix (Capital Markets Internet eXchange) was set up in 1991 by Cooney, who, at the time, was writing software for the financial markets. "I had a good background and contacts in the industry before we started," he says. "After the first couple of years, we grew to three of four staff. The next level of growth occurred when we bought out a competitor and took over the software package they had been selling: Practical Treasury Manager (PTM)."
As a result of the acquisition, Capix quickly doubled in size. The company then developed a range of software modules for securities trading on the internet, including equities and futures broking and online banking. About this time, the rate of growth accelerated again, fuelled by demand for its internet-based trading software.
"We owe a lot of our growth to the internet," Cooney says. "It has turned a good business into a booming one for us. Locally, we will always deal with clients face-to-face, although we are finding the internet is a great way of selling our software overseas, particularly in Asia."
One problem the company faces is constantly changing technology. "A lot of our resources are spent keeping up with the latest trends and development tools," Cooney says. "One very big problem now is that once clients have decided to buy one of our software packages, they expect the software to be installed and implemented in record time. Our internal teams have been structured for maximum flexibility. We can move very quickly. A good example is the recent sale of internet bond-trading software we made to a major bank. The software was up and running in four weeks."
Funding for Capix was initially out of profits and retained earnings. The company has never carried debt. In 1999, it announced it would list on the Australian Stock Exchange.
"We realised that serious capital was needed
to fund the growth, so we raised an initial round of venture-capital
funds," Cooney says. "This process took about six months to
complete, much longer than we thought, because contract negotiation
and due diligence took so long. We eventually went with a listed company
called Goldsearch because it offered a deal with the least number of
strings attached and we felt they could best help in the management
of our listing and in business networking."
Capix is due to list in July and hopes to raise $15 million by selling 30% of the company. It is considering several acquisitions, at a cost of $5 million. It also thinks being listed will give it more credibility among its clients.
Cooney says the biggest problem in recent years has been competing with larger rivals. "It is very difficult for small Australian IT vendors to sell to corporations," he says. "However, we overcame this through patience and perseverance."
Capix's client list now includes Ford Australia, Boral, News Corporation and Commonwealth Bank. "Every additional corporate client makes the next sale a bit easier," Cooney says. "We were able to change our perceived weakness - the small size of our company - into an advantage by emphasising that as a smaller vendor we are more flexible and much faster to act."
Although Cooney says the company's objectives have not changed, the internet has changed the nature of the business. "Our older corporate treasury products are out there still selling well, but the internet has meant that we have had to develop a new range of products. The internet has created so many more opportunities."
Cooney says companies getting into e-commerce need more than a Web site and a business plan. Among other things, they also need keen antennas: "There are also a lot of rogues in the venture-capital arena which newcomers need to be aware of."