Elonics adds £6.1m for expansion

Published on Monday 6 September 2010 15:30

ELONICS, the Livingston-based technology company whose backers include Sir Tom Farmer and Brian Souter, has raised £6.1 million to help accelerate its push into overseas markets.

Venture capital (VC) group Scottish Equity Partners led the latest fundraising round which is thought to be the largest VC-backed IT deal in Scotland this year.

London-based Octopus Ventures and a number of existing investors also took part in the fundraising.

The semiconductor company, which develops products used for the reception of digital TV and radio in devices including set-top boxes, will use the cash to open offices in Taiwan and China before the end of the year.

It also plans to recruit a number of engineering staff to add to its 19-strong Livingston workforce.

David Srodzinski, Elonics' founder and chief executive officer who has previously worked at Edinburgh-based Wolfson Microelectronics and Intel, said: "We have built up an excellent position in the silicon tuner market and this additional funding allows us to accelerate our sales momentum and grow the product portfolio."

SEP partner Stuart Paterson described Elonic's tuner product as "world class", combining high performance, low cost and energy consumption of 1/50th of traditional tuner technology.

"We expect the global tuner market to be worth in excess of $700m (455m] per annum as the market transitions from 50-year-old metal can technology to silicon chips.

"Silicon tuner sales are growing rapidly thanks to rising demand not just for set-top boxes but for more tuners per box to cope with added features," he said.

Last year, the company launched a multi-band tuner module that can be used to receive digital TV and radio broadcasts with potential applications in a range of consumer devices, including digital set-top boxes, portable media players and in-car television units.

As well as providing a more cost effective solution for product developers, the company is benefiting from the worldwide digital switchover for radio and television services.

Elonics, which was founded in 2003, raised its first equity funding of around 2.5m during 2008. Investors included Perth-based investment house Braveheart and Scottish Enterprise along with Farmer and Souter.

Although the two entrepreneurs have since provided further funding to Elonics, the company was not able to comment on whether they had participated in the latest round.

Chairman of Elonics and former chief executive of Wolfson, David Milne, said the fund-raising demonstrated "the quality of the Elonics team, the attractiveness of the product and the growth prospects for RF (radio frequency] tuner technology in the global business."

In April, the company said it was hoping to reach breakeven by the end of the year.