On the cusp of rolling out a new Rich Communications Suite product announced earlier this year, NewPace Technology Development Inc. is seeking its first round of equity funding.
NewPace specializes in software development for mobile telecommunications, and is still owned solely by two co-founders, CEO Brent Newsome and CTO Gavin Murphy. The company borrowed $850,000 from the Business Development Bank of Canada last November and has re-invested its own profits to finance the development of the rcsConnect product but has never raised money from venture capital funds or angels.
Newsome said in an interview yesterday he will demo rcsConnect at DemoCamp Halifax on Sunday as part of the company’s fundraising efforts. Though he declined to reveal how much money the company is looking for, he said it was less than might be expected of a three-year-old company with 35 employees.
The company developed rcsConnect to support the introduction by mobile operators of the Rich Communications Suite, or RCS. RCS is a new global standard being implemented by carriers, and is known as ‘joyn’ to consumers. The goal of this initiative is to upgrade the current standards of voice and text messaging offered by mobile carriers.
RCS and ‘joyn’, unify a range of functions such as voice, texting, media-sharing, conferencing and video-chat into a single service available on any brand of device and between all operator networks. Compared to traditional telecom infrastructure players, NewPace is able to rapidly deliver RCS to mobile operators at a very low cost per subscriber and with little or no capital expense.
“We have built a ‘cloud’-based RCS solution for price sensitive Tier 2 & Tier 3 carriers, who need a solution to be compatible with the Tier 1 carriers deploying the service now,” said Newsome. “The product also allows operators who aren’t fully ready to deploy RCS to compete with other instant messaging services while they undertake the complex infrastructure build-out to support RCS. ” Our solution can also be operated outside of the cloud for very large operators.”
NewPace has one firm order to deploy rcsConnect for development purposes, and two imminent orders. The company also has two sales partnerships, and has been demonstrated to be compatible with numerous RCS software clients. He added the company has a global pipeline of about 60 potential clients, about half of them expected to make decisions in the next few months, and new inquiries weekly.
What’s especially interesting about the NewPace fundraising is that it is an extremely mature company to be raising what is essentially tantamount to a seed round.
Newsome and Murphy founded the company in 2009, retaining a core of software developers who had worked for AOL in Halifax on similar projects. The company has a revenue history from notable companies in the telecommunications space, and a team of 35 people, most of whom have worked together for 10 years. Newsome added the company has a clear exit strategy.
It also operates in a huge market, as the market for text messaging on mobile devices was $127 billion in 2010 is projected to reach $334.7 billion by 2015.
