Unblemished start-up record rolls on with sale to another fortune 100 company
by Ken Robinson
It’s early April in the Adelaide Hills and Mr Antony Ceravolo (Class of 1992) is tending to a vineyard like generations of Ceravolos before him. “I’ve just come off the tractor,” he says. “Doing farm work and getting your hands dirty makes you realise how hard some people work for a living. But it’s good to clear the mind and escape from computers and code for a while.”
"I said to my contacts in the UK that were in film distribution and DVD distribution, let's have a rack at emulating what Netflix has done."
Mr Ceravolo’s heritage is rooted in the vines and olive groves of Calabria in southern Italy. His father Joe immigrated to South Australia as a seven-year-old boy, eventually founding a namesake winery. But the son’s path has been more Silicon Valley than Barossa Valley.
Antony Ceravolo is one of Australia’s most under-the-radar tech founders with a success rate as sparkling as his father’s chardonnay-pinot noir: two companies built from scratch, both highly profitable, and both bought by Fortune 100 companies. First LOVEFiLM, a European version of a nascent Netflix, purchased by Amazon in 2008 for a rumoured £200 million. Then Sine, visitor management software, acquired by Honeywell in 2020 for an undisclosed sum.
Mr Ceravolo says the cash on offer to tech founders, especially those in the startup phase, can be a poisoned chalice. “The valuations that are floating around – it’s quite tempting to get sucked into taking the money. But be careful because you’ve got to deliver that growth. For me, the lesson learned is keeping things simple: not having a big board, making sure that you can bring your venture capital partners home to dinner, that they can meet your family and you can look each other in the eye. Because these people have their own shareholders and the pressure to grow and scale these businesses is mind-blowing. There’s been some pretty tense moments with shareholders and boards along the way, that’s for sure.”
He speaks glowingly of Adelaide and built Sine into an international company from there but he left his hometown at 16 and didn’t return in any meaningful way for 15 years. His first stop was Bond University to study Commerce and Law, graduating in 1995. “I’m a 921. Probably one of the first five Adelaide people to go to Bond,” he says. “My parents were very supportive of that move because they wanted me to get out of my own town, follow the US model and go and meet some other people.”
An early career as an investment banker in London and New York followed with Schroder Salomon Smith Barney, now Citi. But Mr Ceravolo could already feel himself being pulled in another direction. “The deeper I got into professional services, the more I realised I wanted to forget about the law and accounting and get closer to problem-solving in the management team.” He just needed a nudge and it came in the most brutal form.
Mr Ceravolo was exiting a cab to go to work at 7 World Trade Center in New York when he saw the first of two hijacked planes slam into the Twin Towers. He remembers running 10 blocks uptown where he gave a deli owner $100 to borrow a phone to call his parents and tell them he was safe. The weeks that followed brought a personal and professional reckoning.
“Life is short and those kinds of close encounters make you sit up and assess,” he says. “But it was more of a pivot. Investment banking was sort of dead at that point. When I got off the plane from New York and back on the ground in London 2001, it was a real tech centre. I found myself being swept into the LOVEFiLM ‘Netflix of Europe’ thing very quickly. So 9/11 was the wake-up call to get me off my set piece of becoming an investment banker for life. Which turned out to be a good trade.”
He had heard about Netflix in New York. At that stage it was an online DVD rental business and he quickly realised there was no equivalent service in Europe. “I said to my contacts in the UK that were in film distribution and DVD distribution, let’s have a crack at emulating what Netflix has done. My first taste of entrepreneurial life was straight into LOVEFiLM which scaled extremely fast. Amazon took a stake in 2004 and then bought it out in 2008.”
It was time for Mr Ceravolo and his Queensland-born wife Fiona to return home to family and the vines of Adelaide. But along with his luggage, he packed another good idea. If his first start-up had its genesis in an infamous airline disaster, his second came from an airline innovation.
“I got the lightbulb moment checking in at Terminal 5 at Heathrow,” he says. “British Airways had launched mobile check-in and it saved you time. I thought, why aren’t we using mobile check-in everywhere?” Sine was born, at first taking off among Australian independent schools. Today its clients include Rolls-Royce, DHL, Coca-Cola, Vodafone and Qantas.
"...If you're not involved somehow in software and investing in these businesses for the long term, then you're potentially missing out."
Sine’s software allows visitors, contractors and staff to check-in at workplaces via tablet or smartphone app. The business was already profitable and growing fast before the pandemic. Then, suddenly, everyone needed a check-in app - and Sine had the proven technology.
“Covid turbocharged the necessity to have a digital relationship with people on a site,” Mr Ceravolo says. ”Even before Covid, the growth was already seriously high. But when Covid hit, before governments worked out what they were doing, people wanted to know who they had been in contact with, where people had been, and how long they had been on a particular location. We had big hospitals calling us as the pandemic broke out saying, ‘I need a digital system now. We don’t have anything’.”
Not only did Sine have perfect timing, it was in the perfect place. “Adelaide for the last eight years has been under the radar,” Mr Ceravolo says. “The staff and the engineering talent have been extremely loyal. If I had tried to do this in Silicon Valley the cost base and staff churn would be triple.”
Staff numbers grew from four at launch to 85 when Honeywell took over, he says. Inevitably, suitors came calling – multinationals, private equity. “The offers were coming thick and fast. The Honeywell offer was completely unsolicited. We told them and others, ‘Look, we’re busy, we’re not really interested in selling the business. But if you want, we can put things forward to our board’, which we did. And we ended up going down that path (of a sale). When the pandemic hit, I couldn’t get on a plane and fly to Los Angeles, New York or Atlanta to keep driving the business.
Selling to a Fortune 100 company was the best way to grow. And Honeywell was very clear that they wanted to grow the software and engineering talent from Adelaide. They now see Adelaide and Australia as their mobile engineering hub globally for their software division.”
The Sine CEO had barely had time to pop a cork to celebrate the deal when he took a call from Honeywell Chairman and CEO Mr Darius Adamczyk. “He says, 'okay Sine, we’re going to do mass vaccinations and we need your technology either as it is or adapted. We’re going to be checking in a half a million people at the main stadium in Charlotte.
Can you make it happen? Give me an answer within 24 hours'.” Mr Ceravolo is proud to say the Sine team did make in happen, in two weeks, and the resulting software checked in millions of people at the height of the pandemic last year. “I was just so lucky to have a great product and an amazing team.”
Mr Ceravolo spent a year after the acquisition bedding down the transition to Honeywell, leaving Sine in December 2021. Since then he’s been working at the Ceravolo family winery, hiking in Tasmania and 'rediscovering how to be a good bloke again'.
“I’m just trying to spend time with family, doing some fitness. I’m lucky that my wife was the COO/CFO and co-founder. She is exceptional at what she does which allowed me to run amok with the product and growth. But being a married couple growing a business with two young children was tough. But we’re still together, we’re still happy. We feel extremely fortunate.”
Can he pull off a hat-trick after LOVEFiLM and Sine? Mr Ceravolo knows the next big thing is 'lurking out there'. “I think I’ll probably stick to software. Technology and software businesses are now so embedded into every aspect of life, from industrial to supply chain to e-commerce, to biotech to space, that... if you’re not involved somehow in software and investing in these businesses for the long term, then you’re potentially missing out on some upside.”
In the meantime the upside is all Bond’s, with Mr Ceravolo looking forward spending some of his newfound spare time helping the next generation of entrepreneurs. “I’d love to get involved with the Transformer program, give back and spread the entrepreneurial spirit to as many Bondies as I can.”