Long road to car-park success Author: Jason Clout Date: 06/02/2007 Publication: The Financial Review Section: Enterprise Page: 49
Acombination of private angel funding and clever use of licensing arrangements has New Zealand-based automated parking company U-Parkit on the brink of a global business.
The electro-mechanical system enables customers at car parks to take tickets and leave their vehicles, then produce the tickets and collect their cars without a parking attendant or anyone else being involved, the company says.
Managing director Phil Jones says that, apart from being automated, the car parking system is portable, giving it an advantage over other car-stacking systems.
But Jones and the rest of the management team realised that the technology - which is patented in Australia and New Zealand - might be adapted quickly to lessen the Kiwi company's advantage.
So a decision was made to license the product in most parts of the world, to get it on the global market as quickly as possible.
"We thought we would sell the distribution rights and have the product as soon as we could. We were worried that people would see it working and then go and make variations and release their own system."
Like most small businesses, finance was one of its main hurdles. Jones says the three directors "basically worked for the love of the business for 18 months".
"That's hard, but that's what you have to do if you want to succeed."
The initial injection of capital was from an angel investor who took a 30 per cent stake in the company.
However, to take the business to the next level, more cash was required. So the licensing deals were struck to put the product on the market and provide essential working capital.
Jones won't specify the size of the licence arrangements, other than to say they are in six figures.
An Australian licence has been granted. That distributor has elected to use a state-based sublicence system.
But the Australian deals are just part of what the parking business is attempting to establish, Jones says. The South African contract has already been signed and there are discussions with distributors in the United States, South America, the Gulf States and Europe.
"Recently, I was talking to someone in Russia about setting up there," Jones says. "Parking fees in Moscow are as costly as they are in Sydney."
Stacking systems such as the one that U-Parkit have devised have an advantage over normal car parks in that they can make greater use of the land available, a prime consideration when central business district or other valuable space is being used.
For the same number of vehicles, the stacking system occupies about 30 per cent of the space of traditional car parks, Jones says.
But he says his company's technology provides the additional benefit of being transportable. The equipment can be assembled and dismantled for a client and then shifted to another site.
There is a system operational at Rotorua Airport. The 42-cell system, as it's called, sits in a hangar that previously could handle just 15 cars.
The Rotorua Airport system is semi-automatic, as there is some human involvement.
However Jones says customers can opt for a fully automated system.
U-Parkit orders all the components for the construction of the parking system, and then subcontracts the manufacturing. It's then assembled and shipped to the company. "We can have a 100-cell system erected in five days," Jones says.