Synchronica Acquires AxisMobile, Broadens Mobile Email Reach

UK-based Synchronica, which currently offers mobile email and synchronization solutions globally, on Monday also touted raising an additional $10 million in funds from new and existing institutional investors, which brings its 2008 secured funding to $18 million. Synchronica said the additional funds will be used to accelerate product integration and fuel growth in emerging markets such as China, Africa, the Middle East, Eastern Europe and Latin America.

Israel-based AxisMobile makes a consumer mobile email platform will let Synchronica add new functionality to its Mobile Gateway software, like email to SMS and email to MMS, as well as a clientless solution for WAP/xHTML browser access. AxisMobile uses a patented email transcoding gateway called Optimizer to add the ability to display a large variety of email attachments like Microsoft Word, Excel and PowerPoint presentations on standard feature phone handsets that would otherwise not be able to support that functionality.

In a statement, Synchronica CEO Carsten Brinkschulte said the Axis Mobile acquisition aims to make Synchronica a leading player in mass market mobile email and synchronization middleware for mobile operators and service providers. Adding AxisMobile's technology, customer base and routes to market, plus the additional $10 million in funding Synchronica has secured will let Synchronica offer mobile email solutions that can work on more than three billion mobile phones in the market today.

"We aim to build a world leader in the market of consumer mobile email and synchronization solutions, and this acquisition is a key milestone that will improve our competitive positioning and accelerate our commercial growth," Brinkschulte said in the statement. "It will increase our ability to sell to customers, particularly to those in emerging economies, where we see the largest potential growth for mobile email and synchronization. With the fundraising and the acquisition of AxisMobile, Synchronica now has sufficient mass and funding to take advantage of the outstanding opportunity to exploit the commercial potential of mass-market mobile email."

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Synchronica's Mobile Gateway delivers push email and mobile sync of calendar and contact data for consumers and business users with connectors to both consumer email applications like Yahoo and Google Gmail and corporate email like Microsoft Exchange and Lotus Domino. The Mobile Gateway does not require additional software on the handset or behind the firewall. Instead it uses push IMAP and SyncML, both open industry standards, to sync built-in email and PIM applications pre-installed on more than 1.5 billion handsets. By adding in AxisMobile's functionality, even basic phones will be able to send and receive email, broadening the market for Mobile Gateway in the consumer arena, especially in small or emerging markets where lower-end devices dominate.

The AxisMobile acquisition will also boost Synchronica's footprint in several emerging markets by adding a strong sales force and key customer contacts in areas Synchronica has not tapped in Eastern Europe, CIS and Russia, along with Synchronica's existing presence in the Middle East, Africa and Latin America. AxisMobile currently has eight live customer installations with major mobile operators, predominantly in Central and Eastern Europe and China.

And emerging markets are a hot bed for mobile email. According to research firm Informa, there will be 4.81 billion mobile phone subscribers by 2012, with the next billion coming from emerging markets.

Earlier this year, Synchronica launched a distribution deal with Brightstar, a distribution and supply chain solution provider for the mobile industry. Under the deal, Brightstar distributes Synchronica's Mobile Gateway in over 50 countries and across six continents. Brightstar provides mobility solutions to more than 30,000 resellers, network operators, MVNOs, retailers and independent agents globally and represents several leading wireless manufacturers. Last year, Brightstar's gross revenue reached nearly $4.8 billion. The company estimates that one of every 20 mobile devices delivered in 2007 came through Brightstar.

"There are real synergies between Synchronica's products and target markets and our own, so it makes great commercial sense to combine forces," said AxisMobile executive chairman Shai Schiller, in a statement. "Both companies are committed to open standards and to developing products that work on even the most basic of handsets -- a must given that the market for mass market mobile email is being fuelled by demand from the developing world."