Digitonic plans more lines after equity deal [Scotland on Sunday]
(Scotland on Sunday Via Acquire Media NewsEdge) A MOBILE marketing firm set up four years ago with GBP4,000 of capital is to develop a raft of new products after securing a private equity funding deal that valued it at more than GBP2 million.Glasgow-based Digitonic raised GBP225,000 when co-founders Iain Wilcox and Grant Fraser sold a 10 per cent stake to a consortium of private investors.Fraser, who was persuaded of the benefits of raising capital when he took part in an entrepreneurship programme at the Massachusetts Institute of Technology, said the cash would be ploughed into product development and taking on more staff to handle the increased business as the new lines came on stream."We've never needed an overdraft, but I was taught that the best time to sell equity is when you don't need it," said Fraser.Even before the deal Digitonic had already invested in recruiting a technical specialist and developed its own software in house. Its Advanced Mobile Validation Service (AMVS) allows contact lists to be "cleaned" so that texts are not sent to mobiles that are turned off or out of the country.Fraser said: "From our research, most people strongly dislike being contacted unnecessarily when abroad, especially for offers that they can't redeem. Brands have no excuse to do this anymore, since our technology costs less than existing practices and can be used by any organisation."AMVS proved popular with betting firms during the football World Cup, and Digitonic has been working with Paddy Power, Coral and William Hill. The firms now plan to use it during the domestic football season.Fraser and Wilcox gave up their jobs in marketing to set up on their own because they thought the large firms were not offering a good enough specialised mobile phone service. They invested GBP2,000 each, spending it on computers, phones and "the smallest office in the world". In the last financial year Digitonic's turnover doubled to more than GBP2m.
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