Technis – globalising UK technology companies

(3 votes, average: 4.33 out of 5)

Thursday, 18 February 2010 08:00

Written by Jonathan Simnett

Technis Against the background of a weak economic recovery and an ongoing debate about the relative value of the service economy and declining manufacturing base of the UK economy, it is undeniable that a thriving technology sector is a key driver for success if the UK is to return to substantial growth.

And, as any citizen of Entrepreneur Country would no doubt agree, it is clear the UK has no shortage of start-ups that go on to be profitable technology companies. But for every Autonomy and Monitise there is, despite the best efforts of the entrepreneurs behind them, a host that, although profitable, remain small. They do not go on to become major global competitors, or do so only as part of a larger and better resourced parent rather than consolidating the market themselves.

Investors and entrepreneurs Bernard Hulme and Jack Kaye believe that a major reason for this is that financial and managerial support tailored to the particular conditions and opportunities that entrepreneurs encounter in the technology markets is in very short supply in this country. Some new thinking and approaches are required if we are to increase the number of companies that go on to make it big.

One of the major constraints that exist, Hulme and Kaye believe, is what they describe as an 'investment gap'.

As Kaye emphasises: “Often, in the UK, early stage investors don’t have the desire, the will or deep enough pockets to take their investments to the stage where they can reach critical mass. This is the size and profile that will make them of interest to the major venture capitalists or institutional investors who can then take them to the next stage. Thus, opportunity is lost. This is compounded in the current environment where private owners now have no access to either debt or equity finance, a situation that may continue for some time yet. Both are major barriers to growth and result in far too many UK-based companies not reaching their full potential.”

Seeing a substantial opportunity in the marketplace, Hulme and Kaye decided to act. Based on their experience in founding, building and selling substantial UK-based technology companies, they have founded Technis to overcome just these constraints and enable potentially fast growth UK companies with a determination to carry on developing cutting edge technology to succeed.

The key to their approach is to take advantage of the relative success of the smaller company AIM and PLUS markets which, even in current market conditions, are able to raise the modest amounts of capital that can allow companies to move forward.

They are taking a very active approach - using PLUS-quoted Technis to fund a vehicle to deliver to the management teams of profitable and nearly profitable niche technology firms not just the working capital but management expertise, synergies and incentives that many lack but need to have in order that they may grow and increase their company’s value.

In building its portfolio, Technis is interested in talking not only to company founders and management teams who want to remain with their businesses and grow them, but also to venture capitalists who want to exit from their investments and angel investors who do not want to invest more but want to stay with their investments.

Both Hulme and Kaye have decades of experience in founding, building and selling substantial UK-based technology companies and operating in global markets.

Bernard Hulme With more than 30 years experience in the information technology sector, Hulme has held senior management positions in both the UK and USA with Fujitsu ICL, The Santa Cruz Operation and Tadpole Technology, a FTSE 250 company. At Tadpole Technology, he served as Chief Executive Officer, acquiring and divesting a number of technology companies before Tadpole was acquired by General Dynamics in August 2005, when Hulme went on to become a private venture investor.

Jack Kaye Kaye has over 25 years experience as a telecommunications entrepreneur and has been involved in businesses worldwide in places as diverse as the UK, US, Middle East and former Soviet Union. After an early career selling office and telecommunications equipment, he established of one of the first mobile phone network resellers in 1984. His company was eventually sold to Hutchison Whampoa and formed the basis of what is now the Orange mobile phone network in the UK. Kaye has also had substantial involvement in fixed line telcos, including 24Talk which was sold to OneBill Telecom in 2005.

He has a history of developing successful mobile and other applications, including a mobile data transfer solution which was sold to BeamIt Technologies in 2005 and a mobile software payment solution for a European debit card company.

The first acquisitions Technis made in building its portfolio were a suite of modular voice-to- text/voice-to-voice language transcription and translation solutions and item tracking and global positioning products, both areas that Hulme and Kaye believe are positioned for robust growth but that can also strongly leverage other acquisitions.

Technis is now in the process of making those further acquisitions and intends to build up a portfolio which will help drive the success of the UK technology sector at a rate of two to three per quarter, primarily using equity in order to preserve cash for working and development capital.

Hulme and Kaye hope to announce the first in a series of new acquisitions shortly, which will feature in upcoming editions of News, Views and Issues from Entrepreneur Country.

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