Tech firms raise €4.2m in first-round funding

6 Oct 2003

Two Dublin-based software and hardware companies have between them raised €4.2m in first-round venture capital funding.

In the biggest investment, software and hardware firm Shenick raised €2.5m in first-round funding from Trinity Venture Capital. The company, which was founded three years ago, provides telecoms equipment makers and service providers with software and hardware that tests their technology for faults before selling it on to customers.

Shenick is targeting the growing metro Ethernet market, which allows companies to connect far-flung branches through fibre optic lines that can deliver broadband quality services. With a second office in San Francisco and employing 20 staff mostly in Dublin, the company is understood to have been provided with more than €400,000 in grant aid for research and development from Enterprise Ireland prior to the first-round investment from Trinity. While the company is currently targeting markets in Europe and the US, it says its key markets are in Asia.

In the second major investment, Dublin firm OpenMIND Networks, which was established by a group of mobile messaging industry professionals, has secured €1.7m in venture capital to enable it to develop and market software that allows mobile operators to deploy sophisticated text and picture messaging services. The funding was raised in a round led by Executive Venture Partners and including Mentor Capital and Enterprise Ireland.

OpenMINDS’s Message-OS software allows mobile operators to quickly develop and deploy text and picture messaging applications to their respective markets, the company’s CEO Alex Duncan said.

In building its technology for mobile network operators, OpenMIND uses the open standard interfaces LDAP and XML, making the systems easy to build and easy to customise. Its products are primarily shipped on Intel platforms running Linux, which are very low cost but high quality hardware platforms. According to Duncan, the company’s software is based on an open, distributed, loosely coupled architecture that allows short development cycles and faster response to market needs. The overall aim is to reduce a mobile operator’s overall operational expenditure on deploying text and picture messaging services.

Venture capital investments have been on the decline over the past two years, although industry sources hint at growing confidence among venture capitalists who were sharply stung by the technology downturn. Across Europe, overall investment by venture capitalist companies in 2002 was up to €27.6bn, according to a recent report by PricewaterhouseCoopers. Technology investments as a whole were down 29pc to €5.3bn. And the number of technology companies that have received finance overall went up 2pc to 3,850. Technology represented 47pc of all private equity investments made in Europe in the past year.

In Ireland, investment overall was down 27pc to €105m. Average deal sizes were down 34pc to €0.52m in 2002 from €0.79m in 2001.

By John Kennedy