This article is reprinted courtesy of Young Company Finance Scotland. (www.ycfscotland.co.uk). The Edinburgh based company has developed a system, Session Insight, which enables mobile operators and their manufacturers to get a real-time view of the service provided and the user experience. This enables providers to assure the operation of their network and deliver a high level of service, and it enables manufacturers of the wireless ‘dongles’ which plug into mobile laptops to ensure that their pre-launch testing has been successful.
The company was started in September 2007, and secured £1.25 million funding in March last year from Par Syndicate, an informal group of angel investors managed by Par Equity, and SE’s Scottish Co-investment Fund . A second round of funding from the same investors has been provided to fund the lengthy process of securing sales into large mobile operators, where projects have had to go through more levels of approval than previously.
One effect of the global economic downturn seen by Ciqual is that mobile operators have purchased its system as a managed service, rather than an outright purchase, resulting in a regular revenue stream rather than discrete capital purchases.
During this period, the growth of data traffic has outpaced the growth of voice on mobile networks, with the consequent growth in demand for mobile broadband. Data traffic on mobile networks is set to double every year for the next five years according to a recent report by Cisco*, with laptop and wireless ‘dongle’ users generating 70% of this traffic growth
Ciqual has this year had a major breakthrough, which could transform its business. This is a contract with one of the world’s largest telecom equipment manufacturers for the supply of its products under a ‘white label’ arrangement. Details of the deal are closely guarded until the first sales are secured, with Ciqual recently completing its first live trials at a Spanish mobile operator for its new partner.
The equipment manufacturer in question had been developing its own technology for testing network performance, but decided to check what was available from third parties. After assessing a number of products, it was decided to work with Ciqual – not only a big win for the company in terms of business, but also a welcome technical endorsement.
The second funding round, complete in May, was an equity investment of £700k from Par Syndicate and SCF, of which £400k has been paid now, with the second tranche payable in September/October against agreed milestones. Ciqual was advised in this fundraising by DC Consulting.