FEBRUARY 13 2025

Published in The Australian Financial Review

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Melbourne duo Derek and Kylie Troy-West have landed a $25 million valuation for their enterprise technology start-up as the pair secure venture capital backing and rule off a capital raising.

Street Talk can reveal Factor House has secured $5 million in growth funding, marking the first time the start-up has taken external money.

The round was led by Australia’s biggest venture capital firm Blackbird. OIF Ventures, Flying Fox Ventures, LaunchVic’s Alice Anderson Fund and angel investors Steve and Michelle Holmes also tipped in. The Alice Anderson Fund supports female-led start-ups.

Factor House, established in late 2019, has been bootstrapped until now by co-founders Derek and Kylie Troy-West. Founding engineer Tom Crowley jumped on board in the inception stages. It ticked over the $US1 million revenue milestone last year and wants to use the cash injection to accelerate the commercial release of its platform – Factor – and grow its sales and marketing talent pool to take its Kpow platform to market.

The start-up builds developer tools that allow engineers to manage the processing of massive amounts of real-time data. Its first product, Kpow, is an engineering toolkit designed to enhance and simplify the management of Kafka – an open-source distributed event streaming platform developed by LinkedIn that allows data to be transported efficiently and accurately between different systems and applications.

Factor House’s Flex platform is built for Flink – a system to improve data processing for distributed systems to generate useful insights or actions from real-time data. This could include things like detecting fraud, triggering alerts or performing currency conversions instantly.

The Troy-Wests were running a technology consultancy before they had the idea for Factor House, born out of a series of meetups with Melbourne software engineers working in the real-time space. They devised a product to support those teams, sold their home, and put everything into the business. Kylie brought a background working in outdoor festival management while Derek had a career in banking and funds management, last helping UBS build its equity derivatives trading platform. This has helped the business bring on major financial services clients like Block, Pepperstone, Airwallex and Afterpay.

Factor House launched its first external capital raise mid-way through 2024. Its pitch was that it’s a cash flow positive business with plenty of runway, a $US15 billion real-time data market in its sights, ARR growing 80 per cent year-on-year and great clients. It wants to be a market leader in the real-time space and emulate the success of local developer tool stars like Atlassian. Confluent is the 10-foot gorilla in the space, a US-based NASDAQ-listed company built by the creators of Apache Kafka.

Blackbird lead deal partner Nick Crocker has picked up a board seat in the funding round. Partner Jerry Stesel led the effort for OIF Ventures and Rachael Newman for Flying Fox. OIF Ventures is also an investor in open source data technology company Instaclustr.