SVOX, a five-year old university spin-off that makes software for in-car navigation systems, has raised several million Swiss francs to secure new customers.
The fresh funds will allow the company to tweak its software for new applications and markets abroad.
Volker Jantzen, the startup company's co-founder and CEO, declined to disclose details on the size of the investment, except to say that the amount is anywhere up to SFr9 million ($7.09 million).
SVOX, which employs 20 people, is best known for developing text-to-speech software, code and algorithms that can read text output from a database and translate it into the spoken word, and it does it without requiring a large computer system to drive it.
Its software is recognized as being fast, multilingual, and efficiently written. As a result, manufacturers of car navigation systems have licensed the SVOX text-to-speech engine.
The software is also now being targeted at personal and portable navigation devices, as well as mobile phones.
Not profitable yet
SVOX has spent about SFr5 million of its capital since founding and has not yet reached profitability, according to Jantzen.
But its cash flow has improved over the past year, the result of royalties ensuing from software licensing contract-wins signed several years ago. Sales grew by 50 per cent in the first half of this year compared with the same period in 2004.
"Some of the devices we had been working on in the past have now entered mass production," said Jantzen in a statement. "The increasing inflow of royalties will substantially contribute to the rapid growth of our company."
The SVOX CEO declined to give swissinfo exact sales figures, but he did confirm that current sales are greater than SFr1 million per year, adding that the company has contracts in place making cash flow predictable over the next five years.
The firm is at a critical point in its development, shifting its orientation from university spin-off to a fast growing software company.
SVOX' decision to restrict the number of shareholders to investors that bring more than just money to the deal is seen as one way to make the critical shift from technology orientation to market-oriented.
In its latest round of funding, the participation of the Siemens Mobile Accelerator has given the firm access to its first large-sized customer, Siemens VDO Automotive GmbH, an $11 billion a year automotive components subsidiary of Siemens that is based in Regensburg, Germany.
"In general, it helps to have an industrial investor. A startup can expand on the back of these truly global customers," commented Frank Becker of Zug-based Invision, a venture capital investment firm.
As for the other investors, Jantzen believes for example that Beat Curti – a well-known Swiss investor - is teaching the largely technology-oriented management team a more aggressive sales style
Despite SVOX already having won some promising long term contracts to supply its software to the number one and two automobile radio/hifi and navigation system suppliers in Europe, Siemens VDO and Harman Becker, Jantzen told swissinfo that there is room for improvement.
"Curti helps us stay focused on the most important deals in the market and makes us think hard about how we are going to win them over," he added.
"For all tech-oriented businesses, this is a critical point [the shift from selling a technology to developing a market] and it's important to have someone with sales and marketing experience driving the company as it goes forward," said Becker.
Curti is 68 and has demonstrated his deal making ability in the past, with holdings in several Swiss media companies and ecommerce ventures.
Originally, Curti hails from the retail sector where he founded what became Switzerland's third largest chain of supermarkets and shops. That firm, the Bon Appetit Group, was acquired by Germany's Rewe two years ago.
by Valerie Thompson