Scottish IT specialist gets £1m from government fund

Published on Thursday 13 August 2009 21:35

A SCOTTISH technology firm that helps multinational companies and government bodies to marshal their information received a £1 million boost yesterday.

Glasgow-based Vamosa – which counts BT, IBM and the European Commission among its clients – is one of the first companies to receive cash from the UK government's 75m Capital for Enterprise Fund (CEF).

Maven Capital Partners, which is managing 30m from the fund, made the 1m equity investment in Vamosa, which also has offices in London, Boston and New York. The company, which was founded in 1999 and has about 36 employees, will use the funding to continue its expansion programme and expects to take on further staff as a result.

George Knox, Vamosa's managing director, told The Scotsman: "To be perfectly honest, without this it would have been very difficult to get any other sort of funding from the normal banks or other institutions.

"This money will allow us to continue investing in our business strategy to become a much bigger and broader international business. All businesses have to have an international view, because the Scottish market is too small."

Vamosa describes its speciality as "information logistics", a mixture of data and content management, which allows groups to manage documents, images, web pages and other information.

Knox said: "We're the world leaders in a very specialist area. We can go into any large organisation anywhere and we have the software and expertise to manage their content. Our biggest challenge is marketing – most people haven't heard of us. This funding will help with product development and some marketing too."

The company opened its US offices two years ago and aims to grow revenue to $25-50m (15-30m) in the next three years. Accounts filed at Companies House showed Vamosa's turnover in the year to 30 April, 2008, was 2.6m, up from 2.2m in 2007.

HBOS and Scottish Enterprise's co-investment fund had previously invested in the business.

Andrew Craig, a partner at Maven, said he had been impressed by Vamosa's strategy to become the "pre-eminent provider" in its niche field.

He added: "This investment by the CEF will provide Vamosa with the necessary growth capital to help the team achieve their strategic vision and demonstrates the value of the fund in supporting ambitious UK businesses."

Lord Mandelson announced Vamosa's CEF cash yesterday while visiting the Nottingham-based KeTech, which received 2m from the part of the fund administered by Octopus Investments.

KeTech supplies communications software and services to the rail industry and detection systems to the emergency services and the military.

Founded in 1998, the company has doubled its turnover to 16m since 2006 and employs more than 100 people at six sites.

Mandelson said: "Ambitious and innovative businesses like these are the lifeblood of the economy, but tough credit conditions can make it difficult for them to invest in their future. The UK government is committed to ensuring that viable companies have the finance they need to grow".

The CEF was launched in January and includes 50m from the UK government and 25m from a banking consortium consisting of Barclays, HSBC, Lloyds TSB and Royal Bank of Scotland.

Octopus Investments and Maven Capital Partners are managing 30m each from the funding, with the remaining 15m set aside for co-investment funding alongside venture capital funds.

Further investments from the fund are planned up to April 2010, with further support also being offered to the chosen businesses.