Business Growth Fund invests £2.5m in wireless start-up
Backing of Devon-based Sub10 Systems brings total invested in region to around £32m
The Business Growth Fund (BGF) announced today it has invested £2.5m in Devon wireless start-up Sub10 Systems.
Founded in 2010 by Stuart Broome, Sub10 designs, develops and sells ‘millimeter wave’ transmitters and receivers which transmit high-speed data across mobile networks.
Since launch the company has amassed a number of large clients in the telecoms industries, and is forecast to deliver revenues of around £10m in 2014.
Most of its business is conducted with overseas clients; the company exports 90% of its products with a particular focus on Eastern Europe, Russia and Turkey.
BGF’s growth capital investment will be used for research and development, staff recruits and sales and marketing, as well as providing a reserve of working capital to fulfil future orders.
IT and telecoms expert Richard Atkins will join the board as a non-executive chairman as part of the deal.
The deal marks BGF’s seventh investment in the South West region and brings the total invested in the area to around £32m.
Established in 2011 by five of Britain’s high-street banks, BGF provides investments of between £2 and £10m in high-growth businesses in return for a minority equity stake and a seat on the board for a BGF director.
Stuart Broome, founder and CEO of Sub10 Systems, commented on the investment: “Many of the team here at Sub10 gave up secure jobs with the likes of Motorola to start a business that we were passionate about and one that we felt had significant potential for growth. There was a real gap in the market for Sub10’s products and our decision is certainly paying off; there is now considerable expansion within the industry and our Ethernet bridges are gaining increasing traction with the large telecommunications firms and integrators worldwide.
“This offers Sub10 real growth potential. BGF’s investment will allow us to further develop our range of wireless products in line with customers’ demands whilst also funding an increase in our sales and marketing efforts to target larger customers and orders.”
Ned Dorbin, senior investment manager at BGF, added: “BGF’s long-term equity finance is well-suited to technology companies’ investment plans, especially where the company is growing like Sub10 and where the business case often works best over extended time periods.
“We are delighted to be investing and are also very pleased to be backing such an ambitious team and an innovative South West business. We hope this is the first of many such companies from this region that BGF invests in.”