New Zealand-based crime prevention software start-up, Auror, has signed up its first major customer in Australia, paving the way for more retailers on both sides of the ditch to make a serious dent in the $8 billion impost of “everyday” crimes, like shoplifting and petrol station drive-offs.
Developed by four Kiwi friends, the software makes it easier and quicker for businesses and police to report crime and stop criminals before they strike. Co-founder Tom Batterbury says a great example of the software in action is in the fight against fuel theft, which costs Australian fuel retailers $66 million each year.
The spark for Auror, which is part-owned by Westpac-backed venture capital fund Reinventure, was a news article about the scale of retail theft in NZ – more than $NZ2m per day – with the vast majority going unreported. After speaking with businesses and police officers, Batterbury and his co-founders realised the nub of the problem lay in the costly and time consuming task of reporting crimes.
“We saw a good opportunity for a software platform to sit in the middle, to streamline the process and harness the data to bring the police and retail communities together,” he says.
In 2013, they successfully pitched the idea to Countdown supermarkets, Woolworths’ New Zealand subsidiary. Since then, Batterbury says being in Reinventure’s portfolio has provided access to funding, expertise and business partnerships with other portfolio companies. The relationship with Westpac has also opened doors.
“Westpac’s institutional bankers have introduced us to their customers in Australia – including some of the big retailers and state police who are now partnering with us,” Batterbury says. “There’s also potential to work directly with Westpac to help deal with petty financial crimes, like credit card fraud.
“We’re really pleased to have our first major Australian customer on board – a top 30 ASX listed company. We’re looking forward to helping them reduce the cost of crime across their business, and our doors are wide open to other customers. We also have our sights on the US.”
At petrol stations, Auror’s software – coupled with licence plate recognition cameras – works by automatically sending an alert to the station attendant when a vehicle drives into a petrol station to fuel-up and has previously been involved in a drive-off without paying for fuel, or reported as stolen.
The attendant can then switch the pump to “pre pay” mode to protect the business from a repeat crime, leading to a massive drop in petrol station drive-offs, Batterbury says.
“One of our petrol station customers was losing $2m a year from drive-offs. Since using our technology, they’ve cut this down by more than half. In one month alone, they prevented over 10,000 cars that had previously been involved in drive-offs from accessing fuel,” he adds.
The software is available to every police officer in New Zealand, enabling them to access real-time data not previously available, which is increasingly helping to solve serious crimes including homicides.
“When Auror detects a licence plate that belongs to a stolen vehicle, police receive a real-time alert, enabling them to quickly respond and intercept the stolen car,” he says. “It’s also helping police with investigations into serious crimes by enabling them to locate vehicles of interest and watch video footage of who’s in the vehicle.”
Danny Gilligan, co-founder of Reinventure, says New Zealand was the perfect place for Auror to build and test their technology because it has a single national police force that is the most technologically advanced in the world.
“It wouldn’t have been possible to start out in the US, because there are more than 18,000 independent law enforcement agencies across the country, or even Australia where there are eight. But the complexity in these new markets with their multiple jurisdictions creates opportunities for Auror, because the platform perfectly solves for it. And they can prove that they’ve done it in their home market,” he says.
After getting their first customers, Batterbury says the founders got the confidence to quit their day jobs, himself as a management consultant and chief executive officer Phil Thomson as a lawyer. Chief technology officer James Choi was previously a data architect and development lead James Corbett a software developer.
But with only limited revenue coming in, the team got by on “survival salaries” with the help of an initial funding round from Sparkbox Venture Group, New Zealand Venture Investment Fund, and friends and family. They were also awarded with a $15,000 prize from an entrepreneurs innovation challenge run by the University of Auckland.
“Initially, our focus was on building a great product that both retailers and police love to use, making the complex, simple. As we got more traction, we knew we needed to bring on talented people to help us evolve the product. That’s when we raised $1m in funding to accelerate our growth,” Batterbury says.
The new funding was sourced in 2015 from Reinventure – which was founded by Gilligan and Simon Cant – along with tech investors Sam Morgan and Sir Stephen Tindall’s K1W1. Gilligan says he knew he would invest in Auror within 20 minutes of meeting the team.
“I remember thinking, if they’re right, this is too important an initiative not to support. I knew straight away I wanted to put time and energy into it,” he says.
Gilligan says he could immediately see the “data network effect” of Auror – where the utility to existing members of a network increases as every new member joins, something Reinventure looks for in investments.
“If you have every business, bank, petrol station on this network, you have the power to effectively eliminate crime. As every new person joins the Auror network, it can have a more and more powerful impact. The market potential for Auror is phenomenal,” he says.
“We usually invest in proven founders, who have built businesses before. But Auror is a young team, with passion, energy, enthusiasm. They’ve sacrificed more than most while building their business.”
Batterbury says the timing is right for Auror to scale up in retail crime prevention before expanding into other applications of the technology.
“More law enforcement agencies have smartphones so they have the ability to access intel at their fingertips. More retailers are installing CCTV, licence plate and facial recognition technology because it’s getting cheaper; and cloud computing is enabling them to scale more quickly. This convergence makes the timing better than ever to roll out our platform,” he says.