With its eyes on “strategic growth initiatives,” Lone Star Analytics is taking on new funding.
The Addison-based predictive and prescriptive analytics company announced a new investment from San Diego’s HCAP Partners, a mezzanine debt and private equity firm.
“We’ve demonstrated our ability to grow, and with this new financial strength, we have even more opportunities,” said Steve Roemerman, Lone Star CEO and chairman, in a statement.
According to Lone Star, the funding is a follow-on to a 2019 investment HCAP made in the company, representing it exercising its full-purchase option. The terms of both deals were not disclosed. HCAP typically invests between $2 million and $15 million in lower-middle market companies with $10 million to $100 million in revenue. According to a recent SEC filing, the firm managed more than $300 million and raised over $55 million for its fifth fund.
The new funding will help Lone Star further build out its software and support its future growth as it expands into new industries. Earlier this year, the company announced its expansion into the European market with its U.K-based subsidiary Lone Star Analysis Ltd., headed up by former Royal Air Force officer Robin Adlam.
Roemerman told Dallas Innovates that Lone Star saw 40% growth this year without disclosing specific figures. He added that the company has plans to double its 115-person headcount over the next two years.
Launched in 2006, Lone Star provides a suite of insight and analytics software platforms focused on operational efficiency and cost reduction. With more than 70 owned and shared patents, the company counts names Raytheon, ExxonMobil, AT&T and Boeing as clients. It’s also worked with the U.S. Department of Defense and the Norwegian Ministry of Defence.
“IoT adoption and the proliferation of AI automation are now requirements across many large enterprises looking for cost reductions and capital efficiency,” said Nicolas Lopez, HCAP principal. He led the Lone Star deal and Managing Partner Tim Bubnack in a statement when the firm initially invested in the company. “As data created by enterprises increases exponentially, companies such as Lone Star Analysis, with its leading-edge software applications and strong IP, are poised for growth in the years ahead.”
