First place in Globes' Most Promising Start-up rankings for 2006 went to Actimize Inc., which develops risk management systems for companies and enterprises. In the past two years, the company has won some impressive awards: last year it placed first in the Fast-50 rankings compiled by Deloitte Brightman Almagor, after showing 8,221% growth between 2000 and 2004. It was also in the list of the 100 most promising companies compiled by "Red Herring" magazine in 2005.
Actimize was founded in 1999 by David Sosna, who today serves as the company's CEO, David Govrin, who is the company's general manager for Israel, and Boaz Pe'er, the CTO. Since the company's early days, Actimize has been supported by Carmel Ventures. Avi Zeevi, a general partner in the fund, is the chairman of the company’s board of directors. Up to now, Actimize has raised some $25 million from Carmel Ventures and from US venture capital fund FTVentures.
The field in which Actimize operates has high demand, which is made obvious by the company's sales figures in recent years. The company's revenue totals $30 million thus far, and it has been profitable since the middle of last year. Its growth is evident in the number of its employees too; Actimize currently has some 150 employees, 70 of whom work in its main development center in Israel, and the rest in New York and London.
The CEO explains the company's success not only in terms of the high demand: "We did one thing right," he said, "and that is that we concentrated on a business problem and not on technology. I think that what helped us break into the market very quickly was that we came to our customers and talked to them about their problems and how to solve them."
And what do you think that you didn't do right?
"We could have done more if we had been more aggressive and quicker to market. This is a field whose progress is quite difficult to estimate, and in some cases I think we were a little conservative.
"However our main problem as a company is not sales or customers but how to find more talented people. We are searching for talent both in Israel and in the Far East (?) and we hope that this award will help us attract employees."
Most of Actimize's activities are in Risk and Compliance, i.e. applications that are intended to prevent problems or risks for customers. These applications are tailored for the financial markets, and in order to develop them the company employs personnel whose expertise is banking and finance. The company has a few dozen customers which are medium-sized or large financial institutions, including giants like Merrill Lynch, Lehman Brothers, Bank of America, HSBC, and others. The company also works with Israel's five largest banks and recently began activities in the Far East.
Actimize helps enterprises such as these to check their data for risk-laden events like money laundering, fraud, or violations of financial regulations. As soon as the system identifies an event of this kind it issues a warning and allows it to be dealt with.
What is the next milestone for the company?
"I think we are beginning to reach a level of operations which obliges us to think how we want to expand our business: by organic or non-organic growth. Our collaboration with IBM and with Deloitte is very important for us, and I think that by taking this kind of step we can expect to see the company advance."
"Where do you see the company in a few years?
"Our business plans talk about developing a significantly larger company that delivers total support in the field of risk both in the financial sector and elsewhere. There is actually no significant single player who is able to cover such a wide range of problems and we think that we can be that player. We want to be the "gorilla" of Risk and Compliance.
Actimize operates in a field in which there are plenty of competitors, not least of which are giants like SAP and IBM. "Most of our competitors focus on a certain application, and because we give relatively broad solutions we have different competitors in each field," says Sosna. "At present we are managing to overcome the competition."
Most of Actimize's activities are with financial customers, but the company's technology is also relevant to homeland security. The company identified the potential in this field several years ago, since the engine that the company developed is able to identify suspected terrorists by searching a graphical database such as photos taken by surveillance cameras.
"We actually investigated this field and have made a few sales," says Sosna. "But we think that there are a few problems with it, a result of security agencies in the US administration being unwilling to buy solutions from foreign companies. I think we could grow in this field, but from the point of view of their needs the customers are of a different level. They are not yet as advanced as the financial customers, and we go where it's easy."
Where are you going, business-wise?
"I don't think that we will have a fund-raising round any time soon; the company is quite stable and strong. We might do something of this kind if we decide to buy another company.
"As for an IPO, yes, certainly, but I don't think it will happen this year. We are realists; the market is tough today and the Nasdaq does not accept relatively small companies, that are growing aggressively. But the market is also dynamic and changing and we may change our minds."
What about being acquired?. Are you getting offers?
"Yes, we have had several calls. But if you think that you can carry on growing aggressively there is no reason to sell, because tomorrow you'll be worth a lot more. Actimize thinks that it has a big market, and therefore there is no logical reason to sell, unless the offer is very exceptional. This isn't part of our strategy, however."
Published by Globes [online], Israel business news - www.globes.co.il - on September 20, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006