Posted on Tuesday 12 March 2013 by Ulster Business
The investment has been seen as an endorsement of the company's technology and strategy as it was led by Atlantic Bridge, a growth equity fund focused on technology investments with offices in Dublin, London and Silicon Valley.
CEO Dave Patterson said the funds will be used to increase Sophia's marketing and sales efforts in North America, to grow its executive team and to accelerate product roll-out.
"I'm delighted they have made an investment because they are such a good match for us. They have one foot in Dublin and one in Silicon Valley," he said.
"Although we are very much a Northern Ireland company and always will be, from a technology perspective we feel a very close affiliation to a lot of the tech start-ups in Silicon Valley. That's why I spend a lot of my time out there, that's why we're building our sales and marketing team out there and it's great to have a VC that understands the challenges that early stage companies have in developing new products and rolling them out."
Established in 2007, Sophia is an innovator in what's known as "semantic content analysis" – a growth area in the age of big data. Target customers are companies with large amounts of unstructured data from which they wish to extract meaning and value to enable better decision making.
Customers using its solutions already include some of the world's largest advertising and publishing houses, which are looking for smart technologies to help them in their fight against Amazon and its ilk.
Sophia claims advertisers can achieve up to three times higher click through rates by providing more relevant ad content without using cookies. Publishers' sales can be increased by intelligently recommending titles through an understanding of readers' interests while maintaining anonymity, it says.
"Now that we've got this funding we can start going to the world and telling them what we've got, what great products we have and go to market with great customer stories," said Patterson.
"Our core technology is incredibly strong. We offer advantages because a lot of our competitors in this space need to build domain models in order to do the analytics on the content. Our technology does away with the need for that. The time it takes to build those domain models is immense and costly to maintain over time. Our technology is intelligent enough not to have to rely on those models."
According to International Data Corporation (IDC), the global analytics market will continue to grow at a 9.8% compound annual growth rate through to 2016 to reach $50.7bn. Patterson says Sophia is well positioned to capitalize on this opportunity with a solution that eliminates the manual work and high cost that current analytic solutions require. The backing from Atlantic Bridge and Sophia chairman Chris Horn, one of Ireland's most respected tech entrepreneurs, suggests others believe it too.
Though the company is now headquartered in San Jose, California, Sophia has retained its development centre in Belfast, and the CEO says it has a big role to play in future.
"We believe the US market is more open to new technologies and the adoption of new technologies than we would traditionally be in Ireland and the UK. It is a brave decision and it goes against the common approach of companies in Ireland, who generally say let's build our business at home and then after a few years go abroad. We felt it was the right move for us early on to set up over there and I'm delighted we took that decision. High risk as it was, it is really paying off for us," said Patterson.
"But our product engineering team is here in Belfast and that is not going to change. We've got a core team of engineers here which we're going to actively double that in the next 12 months. We're looking for people who are top quality engineers here in Northern Ireland who can get excited by our vision and the opportunity. At the moment we have six here in Belfast and I think we'll try to get up to 15 or more in the next 12 months. We don't just want people who are good programmers we want people who can get passionate about what we do. We want them to buy into our mindset. We offer a very different view on what it is to be a software engineer. If you want something that's going to excite you, you need to come work for us."
And unlike some tech start-ups from Northern Ireland Patterson isn't afraid to dream big. He is confident that the IP the company has is not easy to replicate, giving Sophia a lead on the market which will be hard for competitors to catch up on.
"We're looking to be a $100m company. We have our eyes firmly set on the stars here. With the team we've got in, Chris Horn and Atlantic Bridge backing the company, they are not going to invest in a company they don't think can do that. This is not a lifestyle company, this is a business that has the potential to really be massive."