Carter has developed a software system for use by courier and express haulage companies to enable them to provide delivery services to locations when they are unattended. The services rely on banks of secure lockers; if the original location is unattended, the shipper leaves a bar code, allowing the recipient to pick up (or return) the parcel at the nearest Carter locker bank (located at sites such as railway stations or business parks).

The banks of lockers are electronic (as opposed to key operated) and involve a barcode and/or PIN number to open.

Carter has received a 500,000 investment (for 40% of the company) from a French group that manufactures lockers for the left luggage market (notably at the Eurostar terminals).

Currently, all major European logistic companies are testing remote and unattended delivery solutions. Carters solution of locker banks coupled with their logistics management software is currently being trialed by a major catalog retailer and by post offices in Germany and the UK.

Revenues are expected to come from the sale of lockers, and from licensing of software and maintenance contacts.

Carter forecast an average selling price of 8,000 for a locker bank of 16 doors, with software licenses selling for 1,500 upfront, plus 150 per annum license fee thereafter, and physical maintenance charge of 1,200 per annum.

The management team consists of two young entrepreneurs. Frank Tonti spent four years with a leading IT consultancy and seven years as co-founder of a CRM software company targeted at call centers. Dan Barton has three years of international operations and logistics experience with the oil and gas industry and was the founder of a now-defunct dot-com venture.

GloMed

Over the past 10 years, Richard Brennan (a Consultant Orthopedic Surgeon) and William Levine (Professor of Medical Robotics at a leading London university) have developed a robotics platform to assist surgeons with minimally invasive surgery. Their approach differs from traditional robotics in that it allows the surgeon to be fully in control of an operation, yet physically constrained from cutting outside a predetermined safe region. The founders claim that after full training a surgeon should be able to increase the number of operations per session by 20%.

GloMed has also developed proprietary pre-operative planning software, which runs on a standard PC, and uses a patients CT scan data to facilitate precision planning of the surgery, reducing operative errors and enabling some procedures to be completed in a single stage. GloMed has filed nine patents that will protect the software algorithms and the key operating characteristics of the system.

GloMeds first product is currently undergoing clinical trials and it is to be followed by a knee replacement product and a hip replacement product, both priced at 100,000 per unit, plus a 20% annual license, plus service and consumable revenue.

There are an estimated 5,500 orthopedic units worldwide that could be potential sites for the Globus knee and hip systems. The majority of these are in Europe and the USA. The knee and hip replacement markets are growing at circa 7% per annum. The minimally invasive surgical market is growing 20% per annum and minimally invasive knee surgery is in excess of 100%, although of a relatively low base. Competition to the GloMed system comes from two main sources: established conventional instrumentation and implant suppliers (the big five global players such as Stryker and Johnson & Johnson) and fully automated robotic systems from other new entrants.

Brennan and Levine are on the board but recognize that they are not best placed to commercialize their ideas. Instead, the role of CEO and Commercial Manager is filled by David Mullins, who was one of the founding scientists of the recent life-science-based IPO, from where he became the MD of a small subsidiary. GloMeds Chairman George Zimmer has spent the bulk of his career in medical device, surgical products, and the pharmaceutical industry.

Based on your learnings in this class so far, evaluate these two opportunities, and discuss which one would you invest in (if you had to pick one), and why?