Scott White, CEO, PragmatIC
Scott White knows a thing or two about the long haul. The serial entrepreneur also harbours a passion for ultra distance running, his most recent achievement being a 105 mile race in the mountains of northern England.
From the outset, he was convinced that PragmatIC Printing - his sixth start-up - would be a marathon rather than a sprint, unlikely to offer quick wins on revenue and production. That awareness underpinned his approach to seeking third-party investment.
"For the first four years we were funded internally and via government grants, as well as revenues from end-customers," says White, recalling the period after the firm was founded in December 2010. "We intended to wait before raising institutional funding. We wanted to run the early years on a shoestring. Then by 2014 we had established pilot production - a complete end-to-end process to show that the entire technology platform worked the way it was supposed to. That's when we brought in Cambridge Innovation Capital and ARM [as investors]."
During those early days, the firm benefited immensely from being part of the so-called Cambridge Cluster. The initial IP had not in fact sprung from the University of Cambridge. PragmatIC had its early roots in its purchase of Nano ePrint, another start-up whose technological advances stemmed from research at Manchester University. Yet during its first few years, with just a handful of people on staff, PragmatIC worked closely with Cambridge research teams. Those partnerships enabled significant advances that would not have been possible with the firm's own limited resources. Presence in Cambridge also provided - and continues to provide - access to a rich and relevant pool of talent.
Not all new tech businesses require a slow incubation phase during which commercial demands can be restrained. "In one of my previous businesses we raised money very quickly and we did it based on a PowerPoint presentation of 20 slides and the reputation of the team," says White. "Sometimes that makes sense. It's all about the nature of the firm."
In essence, PragmatIC's technology didn't have an existing mature market to plug into. "This wasn't about making a widget that you can sell instantly and then flogging the company in two years. We're developing a fundamental technology platform that can revolutionise daily lives. This is the kind of advancement that really needs time, developing partnerships, educating the marketplace, developing an ecosystem around the products."
The more game-changing the technology, in other words, the more patience may be required before breakthrough success.
In the case of PragmatIC, that game-changer is an ultra-thin, inexpensive, printed equivalent of a silicon chip. With the ability to push some level of electronic intelligence into the everyday objects around us, the list of potential applications is truly vast. White reels off a few examples: "We've done a lot of work on consumer goods packaging, allowing it to communicate with devices around it or with the consumer directly. Toys and games are another obvious candidate - we're able to give an element of interaction, some of the things we've got used to in digital and online gaming."
Over the past two years, based on their first round of institutional investment, the team has focused on improving the reliability and scaleability of the processes and working with customers of the technology on applications development and prototyping. The most recent series of fundraising, six years after the company was founded, will enable the purchase of equipment required to ramp up production from the millions-per-annum to the billions. "Over time we're evolving more towards standardised products as markets mature," adds White.
This stage of development, with a firm of PragmatIC's potential, represents a sweet spot for the likes of the British Innovation Fund, which participated in the latest round. But, conversely, what does White's senior team look for in an investor?
A true understanding of the "slow burn" is number one on his list. "We need investors to have a real understanding of how the business is going to develop and the implications for financial requirements, for investing timescales," he says. “I've seen a range of types of investors involved in the different start-ups I've built. None are inherently good or bad, but some are much more appropriate for certain types of firm than others. We want everyone around the boardroom table to be on the same page with those timeframes and expectations."
Another valuable attribute is a direct fit in terms of potential synergies. "Avery Denison is a great example," White explains. "We've had a relationship with them for a few years and, as of 2016, they're also now an investor. They're a leading supplier of labels and packaging materials but they're also the leader in radio frequency identification (RFID) and our technology is particularly applicable to that. Another good example is ARM [an investor since 2014], with their semiconductor IP. They're helping us push the boundaries with the technology, with the level of performance we can achieve, by driving it into some of their types of designs."
The third feature that White values in an investor is the network that they can leverage. "This can really help with the growth of the business, connecting us to new customers, new markets, new sources of funding," he says. "There's a continual challenge when you're a small business around how you get into new customers or partners at an appropriate decision-making level. The right investors can be incredibly helpful with that."
This may not be PragmatIC's last bout of fundraising: more rounds of private investment, or even an IPO, could be on the cards in the months and years ahead. Yet White makes it clear that listing the firm is not an imminent priority. "We just want to build a sustainable, profitable business," he says. And his roster of patient long-term investors gets it.