Investors have poured another $5 million into a Carmel tech startup with big plans for the beer industry.
SteadyServ Technologies LLC, founded in February 2012, recently secured the venture funding in anticipation of a product rollout in the first quarter of next year, company founder and CEO Steve Hershberger said Friday. The $5 million stacks onto $1.5 million SteadyServ received earlier this year.
The company spent its first year and half in business refining its product, iKeg—a system with a sensor that monitors beer left in metal kegs and sends alerts to mobile devices when supplies are low.
The 12-employee firm expects to generate less than $100,000 in revenue outside of investments this year as it works out its product’s issues during beta testing. That will change starting next year, if all goes according to plan.
SteadyServ plans to hire 75 to 100 people—including salespeople, software developers and back-office workers—and record at least $25 million in annual sales within a couple of years. It has already received commitments from customers as large as Anheuser-Busch, Hershberger said.
That's warp-speed growth for a startup heading into its second year of business.
“When we started, the guidance was to follow the Indiana playbook to raise money: ‘Do it small, be conservative and take baby steps. Don’t think about anything bold,’” Hershberger said. “We thought, ‘You know, here’s the problem. This idea just can’t be half-present. It’s either an absolute dud and didn’t work, or it’s going to be very successful.’”
The idea for iKeg brewed from Hershberger’s own work experiences. A software developer by trade, he also helped start Flat 12 Bierwerks just east of downtown.
Restaurants and bars often resort to rudimentary methods, such as shaking a keg, to determine how much beer is left in containers. iKeg, which sends reports to mobile devices when a keg is low, helps customers better stay on top of beverage orders and prevents them from throwing out unconsumed beer.
“If it’s off by 2 or 3 percent, is it a big deal? In terms of restaurant economics, it’s a real big deal,” said Ryan Kellerman, director of beverage hospitality for the Scotty’s Brewhouse restaurant chain, which is testing iKeg.
SteadyServ has tweaked its product as it received feedback from testers and prospective customers. For instance, instead of reporting a keg’s remaining beer as a percentage or a fluid measurement, the company developed a metric that servers can understand: pints.
Instead of targeting a lot of small deals with bars and restaurants, SteadyServ looks for business from distributors, which typically have larger budgets and more willingness to invest in technologies such as iKeg.
There's little competition in the market at the moment. With Hershberger’s background in both technology and the beer industry, investors saw a lot of potential, said Douglas Conner, managing director at Periculum Advisors LLC in Carmel, which brokered the funding rounds.
“It is ambitious,” Conner said about the growth plan. “We also think the prize is big. Not moving quickly is almost criminal as well.”