When I caught up with Ondrej Bartos, the partner of Prague-based early stage fund Credo Ventures at Startup Week Vienna last month, he told me that they have just closed an exciting deal (which details he was not prepared to disclose until today).
So today, Credo’s press release hit my mailbox and I read in astonishment, that they have spent $3 million on Intellitix, which looks like a late stage RFID-based event management solutions company from the UK. Having googled “RFID event management” I have got over 1.7 million results.
“Has Credo Ventures lost its focus?” I wondered, dialing Bartos’ mobile. He assured me from somewhere in London, that, no, absolutely not. So here is what the new investment is about.
Innovation comes in different shapes or forms. RFID technology has been commercially deployed for over a decade. In Swiss Alps RFID-enabled ski passes are used to let the skiers through the check points quicker. Yet, in major outdoor events such as music festivals, paper tickets are still routinely issued and then exchanged to colorful wrist bands. Queues ensue.
So Intellitix solutions resolve the festival problems by installing RFID readers, close loop wireless networks and payment terminals, as well as providing order fulfillment services to deliver wrist bands to the attendees prior to the event. But the wrist bands are used not only to get through the gates. Here comes the really nice part.
Concert goers can also purchase beverages with a swipe of a wrist(band). If paying is so easy, perhaps they spend more than they should. Cunningly, Intellitix business model includes profit sharing. Profit from selling booze without a liquor license: now, that’s what I call an innovative business model (and “freemium” seems so yesterday).
I wanted to speak to the industry people before going ahead with this post, but unfortunately the organizers of Reading Festival were not available for a comment at a short notice, and their PR people did not have insights into the festival’s operations. If I get news, I will update the post later.
Intellitix’ founder Serge Grimaux is actually based in Czech Republic, so this is where the link to Central and Eastern Europe comes from. French by birth, Grimaux has established computerized ticketing company Ticketpro in CEE and then took it to four different continents. Now he is innovating the industry with RFID. Miss the festival atmosphere already? Remember the queues? Here is how Intellitix deals with them.
I still feel that Credo Ventures made an investment which is outside of its self-imposed early stage focus. According to Bartos, Intellitix was profitable in the year one (the company was founded in 2010) but will now start spending more than it earns to enter new markets. This is what I would call “expansion capital”. But hey, business is business, and this is Credo’s first fund so it must perform.
And finally, what about all those mobile phone ticketing apps? Take Croatian Entrio, for example, which is simplifying the logistics of delivering the tickets by making them available on a mobile phone? Bartos does not believe that such apps solve the flow problem yet, but when the smart phones with NFC chips become more widespread, it would only be logical to replace the wrist bands with it. Perhaps the founder of angel-funded Entrio Matija Marijan, whom Bartos and I met during the Credo Week stop in Zagreb this year, should have a chat with Grimaux. Prague is not that far away.