Bullant Scores $40m, Trims Local Staff
Sydney Morning Herald
Wednesday January 24, 2001
Software start-up Bullant has secured $40 million in venture capital from a consortium of American investors led by JP Morgan Equity Partners and thought to include a major technology company such as Intel.
The capital raising is a breakthrough for Bullant, which claims to have developed a method of dramatically speeding up the way Internet applications are delivered to a range of wireless and computer devices, but failed to raise the capital it was seeking last year in the aftermath of the tech stock slump.
The funding announcement, subject to due diligence, coincides with 29 staff including the company's chief operating officer being made redundant as Bullant cuts its broad-brush sales and marketing effort in Australia.
Bullant chief executive Mr Gary Aitchison said sales would now be led out of the US, targeting telecommunications equipment manufacturers in America, Europe and Japan.
Sydney will remain a research and development centre, where Bullant plans to expand its engineering staff and reposition as an infrastructure company. In an attempt to overcome the IT skills shortage and generate interest in Bullant among programmers, co-founder Mr Ray Huetter will begin teaching Sydney University computer science students about the company this semester.
After six years and $14 million in development, Bullant released its Zero Friction Engine last June. The technology caught the interest of Sun and Intel but convincing investors to back the company proved hard.
A small amount was raised from US payments company First Data, and a bridging loan of $4 million extended by local investors to pay salaries for 172 staff as Bullant management flew across California and Asia on a capital raising roadshow.
``The first part was convincing them this was real. The claims we make for our technology are so astounding there was initial disbelief that needed to be overcome," Mr Aitchison said.
``In time we did that but it took a full year to validate. We had grossly underestimated how long it would take."
Mr Aitchison said the $130 million valuation now placed on Bullant was less than the founders had originally hoped for.
``We underestimated the extent of the tech shock and the level of buy-in needed from the US because there is very little appreciation of deep technology in this region," he said.
Zero Friction Computing claims to dramatically increase the speed with which a server computer can process Internet transactions and allows it to support more users.
This could potentially reduce costs for e-tailers and Internet content providers and give a faster experience to their customers.
``The Americans call us aggressive. I think that means we set aggressive targets," Mr Aitchison said.
This year, that includes signing up 1 million Bullant users, supporting most new wireless devices and moving to a public listing in 18 months' time.
THE STORY SO FAR
1995: Bullant formed by Ray Huetter and Gary Aitchison.
May 2000: 100 staff on board, plans to raise $US21m.
June: Product release.
July: $3.7m Fed Government grant.
Sep: $US5m raised from First Data.
© 2001 Sydney Morning Herald
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