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Case Study: Connexion2 and Identicom

Published: May 2005

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(Left) Craig Swallow, Chief Executive, Connexion2 (right) Matthew Male, Investment Manager

The Company

Based in Dinnington, Sheffield, Connexion2 designs and develops mobile devices that help to improve the working lives and safety of lone workers.

The Company was borne out of a development project devised by Triteq Limited, a Berkshire-based electronic product design company, in collaboration with AME [Product Services] Limited, a Sheffield-based product design company. The project was headed up by Connexion2 Chief Executive, Craig Swallow, who has over 15 years' experience in the IT and mobile communications industries, with a particular focus on taking non-voice GSM based products to market.

The Company was formally established in 2003 and completion of its first product, Identicom, occurred in late 2004. Identicom is believed to be the first lone worker security product of its kind: an identity card holder containing a GSM module that can be activated discreetly should the wearer find himself in a threatening situation.

The Identicom discreetly alerts a dedicated call-centre that assistance may be required and can record any verbally communicated abuse, which could be used in future prosecution, if appropriate. The device can also support the identification of a worker's location using location based service technology and helps their employer ensure the safety of their lone working staff and thereby meet their moral and legal duty of care.

The Challenge

Craig Swallow said: "We believe that Identicom is the first lone worker protection product of its kind and is specifically designed to help workers at risk of danger from those they come into contact with. However, we have faced the challenge of getting the product from design stage into production, and then out into the field."

Once the development work had been completed, Craig's key issue was to raise sufficient funding to finance the sales and marketing effort of the Company in order to generate enquiries and turn them into sales.

Like many small, earlystage businesses, Connexion2 did not have a track record of trading and the Identicom product was still an untried solution and therefore, raising finance from traditional sources to meet the Company's requirements fully was difficult.

The Solution

Through his advisers, Craig was introduced to South Yorkshire Investment Fund, which exists to help companies in the region bridge the funding gap that is left unfilled by traditional sources of finance.

Together they drew up a business and marketing plan that laid out the key business proposition of Connexion2 and the process for bringing Identicom to market.

The Fund recognised that Connexion2 had pioneered a revolutionary remote security device and saw the long-term potential for the solution in a number of sectors. After undertaking its own due diligence, the Fund agreed to invest £200,000 in return for a minority equity stake in the Company. The investment completed on November 1, 2004.

Commenting on the deal Matthew Male, Investment Manager, said: "We believe that Connexion2's Identicom is a genuinely innovative product with huge potential in the UK and European personal security markets."

"We actively seek out companies like Connexion2 not just because of the quality of their product or service but also because of the high quality of the management team, and Craig Swallow and his team are no exception to this.

Craig is ably supported with a strong management team and a number of non-executive directors, who between them all, have some very strong experience within the IT and telecommunications industries."

Progress to Date

Since the Fund invested in Connexion2, the Company has completed a series of extensive trials with the National Health Service that culminated in John Reid, the Health Secretary, endorsing Identicom when the NHS announced that certain nursing staff were to get a personal protection device.

John Reid said: "I am determined to do everything within my power to stop NHS staff suffering from violence and abuse. They dedicate their lives to caring for the sick and in return they deserve respect. Anyone who attacks our staff will face tough action and the possibility of jail."

In a ringing endorsement he added: "Up to 100,000 staff work alone in the NHS everyday and thanks to this device they will have the knowledge that help is only a button away. As recordings of incidents can be used as evidence in court hearings, it also offers the police and the NHS Security Management Service valuable information in punishing these criminals."

At a grassroots level, Health Visitor Anne Lewis, who works for Northern Liverpool Primary Care Trust visiting families in their homes, said: "Identicom is very easy to use and it records my whereabouts each time I walk up to a house for an appointment.

" It is also very discreet; it doesn't look like a panic alarm which means that I can secretly activate the alarm without arousing the suspicion of the patient and potentially inflaming the situation."

The Company has recently recruited a number of staff, including an Operations manager and a Sales & Marketing Manager, to help it maximise the potential of the opportunity.

Editor's Notes

About South Yorkshire Investment Fund

South Yorkshire Investment Fund  provided seedcorn, loan and equity linked investments, ranging from £15k to £2.5m, specifically to help small and medium businesses meet the gaps in funding they need for growth and development.

Created as part of the Objective 1 programme, the Fund is a private and public sector business finance provider. The European Regional Development Fund and Yorkshire Forward are investors in the Fund.

South Yorkshire Investment Fund also provided access to Business Angel investments from the Yorkshire Association of Business Angels and Microloans through BiG Business Loan Fund and Donbac Microloan Fund.

Finance Yorkshire has now taken on responsibility for providing gap finance in Yorkshire and the Humber.

For further details please contact Suzanne Tinkler,  on 0845 649 0000.

South Yorkshire Investment Fund Ltd is a company limited by guarantee (Registered No 3936065). South Yorkshire Investment Fund comprises three sub funds, the South Yorkshire Investment Capital Fund, the South Yorkshire Investment Development Fund, which are each managed by YFM Venture Finance Limited, and the South Yorkshire Investment Small Business Fund, which is managed by Finance South Yorkshire Ltd. YFM Venture Finance Limited (Tel 0113 294 5000) and Finance South Yorkshire Ltd (Tel 01709 386 377) are each authorised and regulated by the Financial Services Authority. South Yorkshire Investment Fund also provides a number of services, which are not regulated by The Financial Services Authority. These include the pilot Seedcorn Fund, BiG Business Loan Fund, Mentorbank and access to the Donbac Microloan Fund. BiG Business Loan Fund is managed by Donbac Ltd (company registration No. 01925556) and Key Fund Yorkshire Ltd (Tel 0114 242 8900).