Boxever Makes the Sunday Times!

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Boxever Makes the Sunday Times!

High-flyer who’s got the travel industry figured out

The following article appeared in the January 4 edition of The Sunday Times
by Gavin Daly

With his laptop bag, fashionable dark-framed glasses and black North Face raincoat, O’Flanagan is straight out of techie central casting. A former head of engineering at the Dublin-listed travel software group Datalex, he jumped ship three years ago to set up his own business after spotting a growing trend towards analytics — a favourite buzz word.

In a business world increasingly fixated on “Big Data”, the move looks well timed. O’Flanagan’s company, Boxever, also a tech provider to airlines and travel groups, was officially formed in 2012 and was one of the busiest movers in the Irish start-up scene last year.

“I was shooting in the dark three years ago,” he said. “Now we’re getting a request for proposals every month.”
Airlines and travel groups want to know more about Boxever’s product, which pulls together data to give a “single view” of a customer. That lets them tack on extra services and pitch personalised offers.
In 2014, the company announced deals with Ryanair, Tigerair, Air New Zealand and eDreams Odigeo, one of the biggest online travel agents in the world. They’re just the latest ones — in total, the firm has eight large customers and is already pulling in revenues in the millions of euros.

Those revenues should treble this year, said O’Flanagan, though he declines to put a specific figure on record. The company recently moved from cramped start-up digs to a new HQ with the space to increase its 40-strong staff.

For O’Flanagan, the coming year “is all about growth”. A big expansion will be financed by a $6m (€5m) investment last year from heavyweight funder Polaris Partners and Frontline Ventures, an Irish venture capital group backed by Declan Ryan of the Ryanair dynasty.

“Our product is strong, the R&D engine is good. Now we will focus on sales.”

An office has been opened in Boston, and the team bulked up with a vice president of marketing, Allyson Barr, a veteran of LogMeIn, a hot tech group valued at $1bn on the Nasdaq. “It means I don’t have to be on every plane any more,” said O’Flanagan, who racked up serious air miles to get Boxever off the ground. “We were always just a bunch of engineers, but we’re becoming much more commercial.”

His ambitions for 2015 aren’t small. “I want to acquire 10-12 new enterprise customers and 40 smaller ones. That’s looking more than achievable now.”

If there is the opportunity to do more deals, O’Flanagan is ready to raise more investment and chase the business. He is well aware of the fate that befalls many Irish tech outfits, which get overtaken by American rivals that can easily raise $50m in funding and blow them away.

“We want to be the ones doing the $50m

[funding],” he said. “Our funders have the view, ‘That’s the size of the opportunity, how much money do you need?’”

The transition from salaried techie to company founder and chief executive seems to have come to O’Flanagan with ease. After his degree in maths and master’s in computer science at Trinity College Dublin, his first job was with Cape Technologies, a young telecoms software group. He was employee No 5.

“I did everything. I swept the floor, I wrote code, I was on the road selling.”
Cape, led by Philip Sharpe, “an incredible guy”, won deals with the likes of Vodafone and grew to 150 people. In late 2007, it was bought by WeDo Consulting, a Portuguese rival, for €20m.
O’Flanagan wasn’t a shareholder in the company and left Cape not long after the takeover. Still in his early thirties, he took several months off to travel in South America and get married.
Back in Ireland, Sharpe recommended O’Flanagan to Datalex, a long-standing fixture on the Irish software scene. It floated in 2000, at the tail end of the dotcom boom, and survived the fallout.
“It’s a very strong company that works with super brands,” said O’Flanagan. Last year, Datalex pulled in revenues of $38m from deals with dozens of airlines and big travel groups around the world.
He joined Datalex at the end of 2008, when Cormac Whelan, then chief executive, briefed him with “re-energising” its engineering team. The jump from telecoms to travel wasn’t a natural one.
“I spent a lot of time learning the travel sector. It has its own language.”
On calls with “big, big airlines”, O’Flanagan realised they handled vast amounts of customer data but were not analysing it. “Most airlines don’t know if you’ve flown with them twice in a year,” he said. “They don’t know whether you’re travelling for business or pleasure, whether you’re going to a Hilton or a hostel when you get off the plane.”
At the start of 2011, he left his secure job at Datalex, armed with an idea and a slide presentation. He got on an Enterprise Ireland start-up programme, Propel, and was working out of Invent, an incubation centre at Dublin City University.
“I was the only guy in the corner of this massive room,” he said. He was on his own for most of 2011, initially working on an idea that customer relationship management (CRM) was missing from the wider retail sector. Around the same time, his second child was born. It was, he admits, very stressful. “I was running down our personal finances.”
In the summer of 2011, he was offered a job as head of research and development at a big bank. “It was one of those forks in the road,” he said. “It would have fixed every financial issue I had in the space of a month or two.” He chose to persevere.
When a space came up in autumn 2011 on LaunchPad, a programme for entrepreneurial teams run at the National Digital Research Centre, he stuck down the names of two friends, Alan Giles and Dermot O’Connor, and applied. “They had less than a week to decide whether to come on board,” said O’Flanagan. Both did. Giles left a job at OpenJaw, another Irish travel tech group, and O’Connor quit Datalex. They are now Boxever’s chief technology officer and vice president of engineering respectively.
The three-month LaunchPad experience was “pivotal”. The first breakthrough was narrowing the focus to the travel industry. “Most travel companies have no history of selling products directly to consumers. They don’t have experience as retailers and marketeers online.”
The Boxever proposition was that it could help them put the right product to the right customer. The sales pitch paid off.
Bloom Equity, a group of angel investors, showed interest in Boxever and, in early 2012, the company got €800,000 in backing from Bloom and Delta Partners, an Irish funder. “Hats off to those guys,” said O’Flanagan. “The product was still evolving but they backed the team and the proposition.” O’Flanagan’s father also pitched in, paying his son’s mortgage for the first three months of 2012.
The company formally came together in the following months at Dogpatch Labs, a Polaris-backed incubator in Dublin, and made its first hires. For the Boxever Christmas party in 2012, there were “six people around a table”.
It quickly outgrew Dogpatch Labs and then space at the National College of Ireland. By the end of its tenancy there, Boxever had 25 people in a room designed for 18. “In summer, the smell of engineer was pretty intense,” said O’Flanagan.
The product they built pulls together data from several locations, and is hosted in the cloud. “These companies have databases that were started 30, 40, 50 years ago. We designed a series of connections to link into old legacy systems and bring all that info into our database.”
Boxever’s first customers were Wideroe, a regional airline in Scandinavia, and Atlantic Airways, the national airline of the Faroe Islands. The early experiences helped refine the product and win the bigger deals over the past year.
Ryanair is using the Boxever product to target customers better, as part of its image overhaul and launch of business and family services. “Globally, having Ryanair on board is a big tick in our favour.”
Air New Zealand is a highly regarded name in the southern hemisphere, while eDreams Ogideo is “an ecommerce machine”. Because Boxever clients typically deal with large numbers of customers, small sales tweaks can make a big difference, said O’Flanagan. In most cases, “the outcome pays for Boxever in the first couple of weeks”. The revenue model is transaction-based, so it benefits directly if the customers see an uptick in sales.
“We have another four [deals] in the hopper,” said O’Flanagan. He is also in talks to form partnerships with bigger players to accelerate sales without hiring a huge direct sales force. Whelan, who left Datalex in mid-2012, now chairs Boxever. Frontline’s Will Prendergast and Polaris partner Noel Ruane are also on the board. All share O’Flanagan’s vision for a big Irish technology group, possibly publicly quoted.
He cites the example of Veeva Systems, a US company focused solely on CRM for life sciences companies, a relatively tiny niche. Founded in 2007, it floated in New York just over a year ago and is valued at $3.5bn.
“We have a high-value product and a broad spectrum of customers. We are building a company with predictable revenue streams. These are exciting times.”
And you can be sure the mathematician in him has run the numbers on Boxever going all the way.

2017-10-22T15:38:12+00:00 January 7th, 2015|