The sky is the limit for Keelvar, writes Trish Dromey with its procurement software attracting big-name customers
Cork start-up company Keelvar aims to change the way governments procure goods and services.
Keelvar has developed innovative procurement software which it says improves efficiency and reduces costs in the tendering process.
Company CEO and founder, Alan Holland, says this has been achieved through intelligent lot design, and powerful algorithms which compute the most efficient outcomes.
“In the example of a transport contract, it allows suppliers to bid on combinations of routes to achieve cost efficiencies,” he says adding that this technology typically delivers cost savings of between 5% and 15%.
Since launching, Keelvar’s customers have included Cork County Council, the National Roads Authority, and the Department of Foreign Affairs, and it has also started selling in the UK where its software has been used by Shetland Island Council to procure transport services.
“We started providing our software for tenders in the single digit millions, now it is being used in much larger contracts. Our aim is to see it being used this year for contracts worth €50m in Ireland and contracts worth £50m in the UK,’’ says Mr Holland.
Employing a staff of 11, Keelvar is planning to fundraise in order to launch internationally in 2014. The company has its sights on the US and is planning a visit to New York later in the year.
Keelvar is a spin out company from University College Cork, and was set up by Mr Holland, a computer scientist who as part of his PhD research in 2005, developed an algorithm which can be used to search through myriad possible combinations of contract awards to find the best value-for-money option.
Three years later, he used his research to help Cork County Council tender for additional vehicles.
Realising that there was a demand in this marketplace for this solution, he decided to commercialise the technology.
“This offered a radically new way to allow governments to carry out procurement. We got a lot of interest from the venture capital companies,’ he says, adding that at the early stages, the firm received support from South Cork Enterprise Board.
Originally set up in 2008 for energy consultancy work, Keelvar was re-launched for the new venture. “We took on three additional employees and also used some consultants and started work on developing the software in mid 2012.”
Named as a High Potential Start Up by Enterprise Ireland last year, Keelvar secured €750,000 in funding from ACT Venture Capital, Enterprise Equity, and Enterprise Ireland.
By the time the funding was announced in September, the company had already launched on the market selling its software as a service product to public sector clients.
The company started with sales in Ireland and moved to selling in the UK early this year.
“Seeing the opportunities in the UK market we appointed a head of marketing and sales based in London in April. It is currently easier to sell in the UK than in Ireland because the government there has created G-Cloud, an innovative cloud framework which allows agencies to buy cloud based services like ours,” says Mr Holland.
Keelvar has ambitious growth plans and aims to increase its staff size to 18 by the end of the year. “We started with small tenders but are now moving up to bigger ones and are now dealing with the office of government procurement in Dublin and the government procurement service in the UK. We have lined up contracts involving tenders for £20-£30m and expect to move to contracts worth £1bn next year.”
Mr Holland says Keelvar is now attracting attention from venture capital companies because of the disruptive nature of the company’s offering, and because of the significant addressable market.
“We are the only company offering this type of solution. It offers significant cost savings to governments and we see huge scope for growth on a global level.
“An added benefit is that our solution helps SME’s participate in procurement and that is something all governments are keen to promote.”
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