Investing in the Transformation of Public Safety
By: Rahul Sheth, Chief Financial Officer, Carbyne
Funding the critical technology needs of our public safety heroes is more important than ever. In recognition of this need, federal and state governments are increasing funds to revolutionize mission critical technology including some of the best emergency medical services software in the U.S. Following the pandemic, government agencies accelerated their efforts to enhance critical response solutions and infrastructure to modernize public safety communication management. In fact in May ’22, the Biden administration announced $10 Billion towards public safety related improvements. Furthermore, bipartisan legislation in the works allocates approximately $2.2 Billion for 9-8-8 and mental health emergency response across America. As a result, more and more agencies using public safety call center software around the nation no longer have to choose between the solutions they want and the solutions they can afford.
Leveraging my experience taking companies public, building privately held Unicorns (companies worth over a Billion dollars), and helping make metaverse technology a reality, I ask myself how private-sector investors evaluate opportunities in public safety technology. Some of the key components include emergency call center software
Having discussed this topic of 911 call taking software with numerous investors, I know they are looking for emergency call handling software solutions that are poised to transform our public safety industry for the next five decades, not just the next five years. These investors know that the dominant solution providers of today are less likely to transform the emergency response software and incident management industry in game-changing ways as are modern, innovative, and nimble cloud-native software-as-a-service providers. In our public safety industry, our clients look for social proof – when PSAPs (Public Safety Answering Points) see prominent agencies selecting a new vendor, they take notice. This is how the snowball effect plays out with new entrants offering innovative incident management software solutions for emergencies and events in the public safety space. As a case in point, we at Carbyne managed to deploy five PSAPs within the Rio Grande Council of Governments (RioCOG) in a matter of three days, which normally takes months in our industry. This is the power of a public safety software platform built on cloud-native software-as-a-service technology. We are here to replace public safety systems that are decades-old, with cloud-native platforms that deliver innovative, robust, secure, and immersive solutions to our nation’s emergency communication centers.
What do investors like most about companies in the public safety space? Generally public safety companies are seen favorably by investors, especially those companies that work with government agencies. This is primarily because these customers (i.e. PSAPs) do not get impacted significantly by volatile market conditions, and their budgets are pre-allocated and approved, which they need to invest in the right public safety technology. These features make many aspects of the public safety business recession proof to a large extent.
What about the long sales cycles of the public safety industry? Investors know and understand that it takes time to sell to government agencies, especially mission critical solutions, and that it’s not about selling mere widgets. These solutions have to replace on-premises systems without downtime. When a solution succeeds, it is rewarded with multi-year contracts, not month-to-month pay-as-you-go arrangements. The long term value of our customers is derived from these multi-year contracts with much lower replacement risk than in other industries. Investors value the low customer churn associated with the public safety industry and the domino effect that unfurls once a large agency adopts next generation technology. This can be an inflection point that helps scale the business exponentially.
What about competition from traditional players and new challengers? Investors don’t want to invest in a company that is here today and gone tomorrow. They want to invest in a company that will remain at the forefront, five or more years ahead of their peers. They look for cloud competency, Artificial Intelligence (AI), data science, and more. The current providers of emergency call taking solutions are deployed on premise and generally lack advanced capabilities. Today, Carbyne is the world’s leading provider of cloud-native emergency call handling solutions. We deliver on the industry’s promise of an NG911 experience to our customers in a very real, tangible, and meaningful way.
What about geography? Private investors have a preference for companies that have a major focus in the U.S. which is where many major technologies are first introduced. Thereafter, these technologies can be rolled out across the world. However investors always advise their companies to first develop a strong infrastructure before expanding too broadly. Investors prefer to see companies focusing on building a strong base in the USA and having a business model that can scale globally efficiently and effectively.
Based on my experience, I also know the factors investors are looking for in a company to determine whether it can offer an IPO (Initial Public Offering) in future. There are four main criteria that investors look for when determining whether a company is IPO worthy: (a) revenue growth; (b) strong gross margins; (c) profitability including positive cash flow and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization); and (d) a sustainable, and predictable business model. Certainly, due to recent financial market conditions, investors are focusing on profitability over growth. On the whole, they like to see companies that are set to achieve disciplined growth and can control cash burn by adjusting growth.
In the end, if we want to serve our public safety clients for the long term, we have to continue doing what we do best and bring innovative solutions to the market and if we do, the revenue, margins, cash flow, and the business model will automatically fall in place. This is why investing in the future of public safety is so rewarding to all of us – we get to change the world while helping to save lives every day.
Whether you are a caller, a call-taker, dispatcher, police officer, firefighter, or paramedic, Carbyne is committed to investing in transformational technology so you can provide the right emergency response for your community, because every person counts. To schedule a free Carbyne demo, please visit https://carbyne.com/wtt.
Carbyne (Headquartered in New York, NY) is a leading global provider of cloud-native mission-critical contact center solutions. Carbyne is one of the largest rich-data providers for emergency response centers, delivering over 250M data points per year all in a unified platform. Our technologies enable emergency contact centers and select enterprises to connect with callers as well as connected devices via highly secure communication channels without needing to download a consumer app. With a mission to redefine emergency collaboration and connect the dots between people, enterprises and governments, Carbyne provides a unified cloud native solution that provides live actionable data that can lead to more efficient and transparent operations and ultimately save lives. With Carbyne, every person counts.