Tech firm uses debt financing to fund global growth
Tech entrepreneur Andrew Matlock admits it was a scary decision. Matlock and his co-founder, Tim Nosal, had created a successful business developing computer games and apps. But a foray into display screen technology opened their eyes to a huge international market.
Matlock and Nosal decided to pivot their company, Industry Corporation, to seize the opportunity. In 2016, they launched Spark, a digital-signage and interactive screen management platform.
“It was a big decision for us,” says Matlock, who is CEO of the Kitchener, Ontario company. “We’ve been working on Spark full-time since.”
Founded in 2008, Industry Corporation developed more than 40 game titles in multiple languages for Xbox Live, Windows, and the app stores. The company secured co-production deals with such giants as NBC/Universal and The Jim Henson Company.
At the same time, clients were hearing about Industry Corporation through word of mouth, and hiring the firm to develop their own games and platforms, Matlock says.
Finding global potential in digital signage
That’s how the company first heard about a project to build software to run touch-screen game kiosks in restaurants. Industry Corporation went on to develop technology that powers screens in more than 1,000 quick-serve restaurant outlets throughout North America.
It was through that deal that Matlock and Nosal, the firm’s Chief Technical Officer, discovered the worldwide potential in developing software for public display screens. Consider all the places and diverse sectors that use screens: Restaurants, hospitals, airports, shopping malls, transit stations, and much more.
“Every year, worldwide, there are over four million pieces of public display hardware sold into the global marketplace—devices like kiosks, video walls, TVs, and digital signage panels,” Matlock says. “We realized there was a huge lack of consolidation in both the hardware and software marketplace. It’s incredibly fragmented for a multi-billion dollar industry.”
Matlock and Nosal had the skill and savvy to identify a market gap and fill it with sophisticated software. What they wanted was the funding to grow their business and expand internationally, specifically into Asia-Pacific—the centre of the public screen industry.
Typically, a tech firm in this situation would look for an injection of equity financing from one or more investors. But Industry Corporation took another route during Spark’s development and market research, financing their international expansion with a series of development and market expansion loans from the Business Development Bank of Canada (BDC).
Matlock expanded, “this was preferential to us, to maintain our cap table and take advantage of our access to credit. Ultimately this led to a successful platform launch in Hong Kong, and was followed by an Asia-led equity round that allowed us to achieve fantastic terms, given the early market penetration.”
Securing financial footing for future growth
It’s common for tech companies to need financial support to get their products to global markets swiftly and efficiently.
“Many businesses want to attack the market quickly after the product is ready, and investors are demanding they grow revenues rapidly. Further, selling into foreign markets such as Asia, generates lot of costs around attending trade shows, doing marketing, and traveling to understand clients.”
A business loan is often an ideal option for these kinds of needs—one that doesn’t require a dilution of entrepreneurs’ ownership stakes.
Industry Corporation now has a team of 10 in Kitchener and has been hiring new sales staff members, who are focused on Asia.
Matlock and Nosal have come a long way since launching Industry Corporation as friends fresh out of university, and they see much more growth ahead.
“We’re realizing a massive opportunity with Spark,” Matlock says. “It’s very exciting.”