RtTech Software, whose state-of-the-art automation helps industrial companies improve manufacturing processes, will announce Tuesday that it has closed a $3-million venture capital round led by the world’s leading industrial Internet of things fund.
The fund is backed by major institutions, such as Cisco Investments, Teralys Capital Innovation LP and BDC Capital, and will be worth about $65 million when funding closes this year. Co-founder Scott MacDonald said it is the world’s only fund investing exclusively in the industrial Internet of things, which uses software and sensors to automate industrial processes more quickly and precisely than a group of humans could.
“It’s an honour and a privilege that they’ve invested in us,” said RtTech CEO Pablo Asiron in an interview. “They’ve been looking at a lot of companies, and they had a lot of other options where they could have put their money. For me, it’s a sign that they believe in the things we’re doing.”
MacDonald echoed the comments in a separate interview, saying he and his partner, Whitney Rockley, have been examining companies from across North America and were most impressed by RtTech’s plan to release a software-as-a-service product in the coming months.
RtTech was spun out of ADM Systems Engineering of Moncton four years ago. Its main products are RtEMIS, which can pinpoint when and where part of a system is using excess energy, and RtDUET, which allows companies to examine specific processes to find the cause of downtime and poor utilization issues.
MacDonald said RtTech makes what he calls “industrial software apps,” meaning it takes data an industrial company already has and uses it in automated systems that improve performance.
Now the company is preparing to release its cloud-based product, which will allow easier distribution and reduce the customer’s implementation cost.
“It opens a bigger market than the one we are currently serving because it requires less capital investment,” said Asiron.
MacDonald said it is one of the first cloud-based products in the industrial Internet of things segment, and it will make these processes more affordable. Older forms of software would have required the manufacturer to have its own servers and information technology staff dedicated to the project, but cloud-based products remove such expenses.
“There are a lot of medium-sized manufacturing companies that don’t have the budget for this,” said MacDonald.
“But when you go into the cloud, you can get the same functionality as a massive company like Michelin without buying monolithic software.”
With the new product and funding, RtTech will build up its sales and marketing staff. It has 11 employees, mostly in product development, and plans to hire about 10 sales and marketing specialists in the coming year.
Up to now, Asiron has handled the lion’s share of sales, with considerable success. RtTech has clients in 14 countries and its sales increased about 20 per cent last year. Asiron and his new backer both expect stronger results with the new product.
“RtTech is one of the unique companies pushing into it, and Pablo has sales with the cloud-based product,” said MacDonald. “He’s not just dreaming about it. He’s already doing it.”