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Finnish mobile software company LPG Innovations has raised E10m in second-round funding
Finnish mobile software company LPG Innovations has raised E10m in second-round funding from Softbank Europe Ventures and CapMan Capital Management.
The deal, brokered by Enskilda Securities, offers further evidence that European investors retain a healthy appetite for the mobile Internet market.
CEO Pekka Kelkka said the funds would be spent on expanding across Asia, the US and Europe, and on turning LPG into a leading player in the global market for mobile Internet solutions. As part of the deal, Daniel Sasaki, MD of Softbank Europe Ventures, is to join the LPG board.
LPG, which recently opened offices in the UK and Germany, will focus on recruiting sales and support staff. Investment will also be channelled into strengthening relationships with resellers and systems integrators such as Hewlett-Packard, Oracle and Cap Gemini Ernst & Young.
He added that the company is also in talks with potential OEM partners, but declined to identify them. Kelkka said: 'We are currently 120 people in three offices. We are too small to conquer the world alone. The aim now is to sign partnerships with global organisations.'
Currently, most of the company's sales are done directly to customers, but Kelkka said he expects LPG to push 70-80% of sales through channel partners over the next year.
LPG was established in 1994. Since then it has undergone two transformations: originally a Web services provider, it developed into a systems integrator in 1996, before reinventing itself as a software developer and wireless applications specialist two years later.
In October 1999 the company closed its first round of funding, securing E2.5m from CapMan. Kelkka said CapMan, which holds around 20% of LPG's equity, was chosen as a long-term partner because of its experience of technology issues.
According to Kelkka: 'In cash terms, we received a number of better offers from other interested VCs, but we chose CapMan because of its strong track record in IT investments and its relationships with companies such as Sun Microsystems. Softbank has the same credentials.'
LPG's products allow users to build wireless portals and Intranet and Extranet services. Customers include Vodafone and BMW. The firm had sales of around E2m in 2000, nearly all in the second half of the year. Kelkka said he expects the company to move into profitability by Q4 this year.