Shuttered Socowave startup mulls its next move
Irish startup Socowave made its entire staff redundant after failing to secure funding to commercialise its ambitious mobile technology.
The firm received €3m in 2010 from Balderton Capital, a venture capital firm founded by former Esat boss Barry Maloney, to help develop its technology which was aimed at reducing congestion on mobile networks.
The software would have allowed companies to better direct signals from transmitter station to better target areas of mobile usage, increasing signal strength in areas of high usage and decreasing it in those with low usage.
Former chief executive Joe Moore said the company was almost at the stage of commercialising the technology, but needed further funding to do so.
Accounts for the company show that the firm had accumulated losses of just over €6m by the end of 2014.
After unsuccessful attempts to raise further equity funding, the firm sold the intellectual property rights for its technology for €1.64m to an unidentified multinational corporation and made its staff of 21, employed in locations in Cork and Dublin, redundant.
Several of Socowave's employees subsequently took up positions with the purchaser of the IP rights, and Mr Moore said all of the staff secured new employment by the time the redundancy process was completed.
He said as the company was in a pre-revenue stage, the accumulated losses of €6m represent investor losses as the company was backed by shareholders. "We had few debts, we did not borrow any money and paid off all of our creditors," Mr Moore said.
"We have substantial funds in the bank [from the IP sale], we have a choice now as to whether to disburse the funds to shareholders or do we try and keep going, effectively as a new startup."
However, he added: "We were looking for €5m which would have kept us going for the next two to three years, the money we have isn't near €5m so we might cease operations."
Mr Moore said the company was just shy of commercialisation when it ran out of funding.
"We were moving towards production and had a prototype, the series B was to advance production," he said.
"The staff did a fantastic job, there was a very strong feeling that we nearly did it, we just didn't get the money we needed to get a commercial breakthrough."