Mr Walsh told The Australian Financial Review he had waited longer than many other tech entrepreneurs to seek significant external funding, based on a desire to build a rock solid business after losing everything in the GFC.
Having forged a career working for big technology firms in Australia, including Intel and SAP, Mr Walsh had moved back to Ireland in the early 2000s to follow family members into the property construction trade.
GFC losses
He built up a successful company, but saw it wiped out when the economy tanked, and returned to Australia with his wife, promising to get a job to make ends meet.
“Australia got a punch in the eye in the GFC, but the UK, Ireland and America really got beaten up, and we had to close the business and emigrate,” Mr Walsh said.
“So the truth is that when I landed in Australia in March 2009, I didn’t want to be a tech founder, I just really wanted to get a job and a career.”
Weighing up his experience in both tech and property, he got a job for a company that would go and read the electricity meters on big buildings, and then sell the data back to the companies’ property managers.
He said he saw quickly that improved automation software could fill a “black hole” of knowledge in companies about their building operations. He resolved with his wife that he would start a company after a few years of earning a salary.
“We see a significant global market opportunity, and we are still in the very early innings.”
— Ed Bigazzi, Five V Capital.
After bootstrapping the company from $1300 initial capital, alongside a university friend, Colin Cullinan who still works in a leadership role at CIM, Mr Walsh said he has built the company with a fiscal caution not often associated with the tech start-up scene.
“The battle scars of 2008/9 did affect how I ran this business, I was effectively a first-time founder in tech and had never thought about how to raise capital, or hire people outside of people I knew,” he said.
“So in my mind I wanted to get the business to a million in recurring revenue before I got my first salesperson, I wanted to demonstrate that we could win our home market here in Australia before looking internationally, and then when we went international and needed to raise capital, I wanted us to have really strong metrics to back up the story.”
He said this rigour had clearly appealed to investors in an era of depressed valuations and redundancies, based on companies trying to avoid the need to raise more expensive capital.
Former Stockland CEO Mark Steinert has put money into CIM’s funding round. Arsineh Houspian
Unlike many Australian start-up founders he said he is happy to talk about his company valuation and performance as he has been relatively cautious to avoid the risk of having to take future funding on unfavourable terms.
“We came in just under the $100 million mark, which was super and this was based on roughly 10 times the earnings or ARR (Annual Recurring Revenue),” Mr Walsh said.
“For me, it is much more important to get the right investors than get 20 times the revenue as a valuation.
“I’ve been very conscious of keeping the valuation logical, so that as we build it out it is sustainable. With the people I have hired, and who we want to hire, they are not interested in trying to build a $100 million business, they want to build a multibillion-dollar business, and they want to do it in an area that has an impact.”
With that in mind a lot of the money raised is being earmarked for hiring senior people in both the US and Asia. Mr Walsh is not planning to relocate to the US imminently, but said he knows they need good expertise on the ground to serve existing early customers, and win new ones.
One notable hire for the company in its earlier days was Anton Mazkovoi, who had been the first fulltime hire at Atlassian, and joined CIM in 2017, inspired by the possibility of working on a software product that would have notable impact on lessening carbon emissions.
Mr Walsh said buildings of various kinds account for approximately 40 per cent of all carbon emissions globally, so its products can make a material difference by stopping energy wastage on a large scale.
Five V Capital’s Ed Bigazzi said he had been keen to back CIM because it satisfied numerous points on its investment criteria.
“CIM is unique in that it solves three problems at once. First, it reduces the carbon footprint for a building which moves us towards net-zero and makes the building more valuable,” he said.
“Second, it saves the building owner running costs and improves the bottom line. And third, it closes the loop between detecting a fault and fixing a fault through smart workflow.
“We see a significant global market opportunity, and we are still in the very early innings.”
