25 JAN 2017
Tyntec, a cloud mobile communications provider, has received a midrange double-digit investment from Cipio Partners in a management buyout, a source close to the company said.
Cipio bought out previous investors, US-based HarbourVest Partners and French venture capital Iris Capital, which had held stakes in the company since 2008 and 2011, respectively, the source said.
Harvard Management Company also backed the second phase of the management buyout, the source added.
Cipio and Tyntec’s management team now share minority stakes in the company, the source said. There is a three to five-year investment horizon, they added.
Tyntec worked with law firm Mayer Brown in London, the source said.
Tyntec generated EUR 35m in revenue in the fiscal year to 31 March, the source said. The company was profitable three months after it was established, and after five years it had reached EUR 10m in revenue with an EBIT of EUR 4m, the source added.
In parallel to the MBO, Tyntec has acquired the assets of US-based Iris Wireless, increasing its international presence and placing it alongside Carlyle-owned mobile provider Syniverse and German software firm SAP [ETR:SAP] as the three most-used intercarrier vendors worldwide, the source said.
The US mobile communications market is estimated at USD 50m and is 80% served by local providers. California-based cloud communications platform Twilio [NYSE:TWLO] is a key player in the space with a turnover of USD 160m and a valuation of USD 3bn, the source said.
In terms of growth, Tyntec plans to expand via its newly acquired US assets, present turnover growth and launch new cloud products in mid-2017, the source said. Towards the second half of the year, Tyntec will review financing and consider whether to plan a further financing round, the source added.
Aside from expanding across the US, Tyntec hopes to focus on APAC and Asian markets like China that have jumped over fixed-line and straight into mobile operations, the source said. It will make further acquisitions if they are in line with its growth strategy. In terms of funding, Tyntec is a profitable company, although it can be