Now that it’s secured $500,000 in funding, Marcato Digital Solutions, Inc. is setting its sights on a $2 million fundraising to finance the international roll-out of its administration system for musicians and music festivals.
``We’re pretty much positioned now to engage in some really serious ass-kicking,’’ Darren Gallop, the CEO and co-founder of the Sydney, NS-based company, said in an interview late last month. ``We’ve signed up four clients in the last two weeks alone that we’re really excited about.’’
For at least a year, there’s been a feeling of excitement surrounding Marcato. For me, it began at Invest Atlantic last year when Gallop so impressed the judges at the Pitching Den with the detail of his business plan and knowledge of his market.
The company already had impressive revenue as musicians and festival organizers were using its software to administer the business side of their operations. Its legion of clients include musicians Gordie Sampson, Joel Plaskett, Mary Jane Lamond and such groups as the Winnipeg Folk Festival, the Stan Rogers Folk Festival, the Celtic Colours International Festival, and the East Coast Music Association.
By the summer of 2011, it also received almost $1 million in non-dilutive funding from the Atlantic Canada Opportunity Agency and other groups.
Then in August came the announcement that it had finally closed a broad-based round of equity and other funding, which comprised:
-- Innovacorp, $250,000;
-- Enterprise Cape Breton Corporation $95,000;
-- National Research Council of Canada Industrial Research Assistance Program $37,958;
-- And, other: $29,542;
In the interview, Gallop explained that $150,000 of the funding was a purchase of preferred shares, and the funding round in total directly consumed only about 1 percent of the common stock. ``We still have 22 percent of the common stock unallocated and we can use it in the next round,’’ he said.
He and co-founder Morgan Currie are planning to begin working on a $2 million round early in 2012. By that time, the company will likely be cash-flow positive and the proceeds from the coming round will be used for a massive roll out to attract international clients.