Synchronica sets sights on Europe

Messaging software firm Synchronica is has launched a major expansion into Europe, after successfully targeting developing markets for the past three years.
The firm, which yesterday reported an 85% rise in revenue in the year to end-December, aims to maintain European customer relationships acquired when it bought instant messaging firm Neustar in February, and sees the region as the natural next step in its development.
“As a relatively small firm, we have to choose carefully where to fight,” chief Carsten Brinkschulte told Telecoms “Three years ago we decided to focus on developing markets, [but it is] now time to look at the next step of where we can grow.”
Developing markets made sense as an initial play for Synchronica due to typically low PC penetration relative to mobile, however Brinkschulte says the time is now right to focus on new markets because the firm’s customer base has expanded significantly in the past year. Carrier customers quadrupled from 20 at end 2009 to 83 by end 2010, and the firm added seven more device makers to its list, two of which are top five players.
The firm is also beginning to see stable recurring revenues from software licensing, which Brinkschulte says are a key element in the firm’s expansion – powering steady cash flows and covering costs to such an extent that future funding rounds are unlikely at this time.
“We’re profitable,” he notes.
The Neustar acquisition brought carriers including France Telecom, Telecom Italia, Optimus in Portugal and all four of Russia’s mobile operators into the Synchronica fold. Brinkschulte revealed the firm is in early talks with three other European carriers, and will seek to leverage any mainland deals to access telco’s overseas subsidiaries.
Brinkschulte believes the firm’s ability to quickly adapt to changes in the market is a key selling point, noting that the recent rise of messaging via social networks as a good example of how fast the landscape can change.
“Our role is to bring all those [elements] together,” he said, noting that increased use of social messaging hasn’t resulted in a decline in the number of regular e-mails sent.
But he warned that the telecoms industry must move faster to cash in on the potential of increasingly close ties to the Internet industry, noting that telecoms has traditionally been slow to react to market developments.