Synchronica, which provides mobile email and synchronization solutions, is acquiring consumer mobile email specialist AxisMobile for $4.9 million (£2.6 million) in new Synchronica shares. Synchronica has also raised additional funds of $10million, from new and existing institutional investors, which brings the total funding secured in 2008 to $18 million. The company says the additional funds will be used to accelerate product integration and fuel the growth of the combined business in emerging markets such as China, Africa, the Middle East, Eastern Europe and Latin America.
The AxisMobile acquisition aims to make Synchronica the leading player in mass market mobile email and synchronization middleware for mobile operators and service providers. The addition of AxisMobiles complementary technology, customer base and routes to market, combined with the injection of $10 million of additional funds, will enable Synchronica to provide mass-market mobile email solutions that work on more than three billion mobile phones in the market today.
AxisMobiles consumer mobile email platform complements Synchronicas award-winning Mobile Gateway software by adding email to SMS and email to MMS gateways, as well as a client-less solution for WAP/xHTML browser access. AxisMobiles patented Optimizer email transcoding gateway also adds the ability to display a large variety of attachments such as Word, Excel and PowerPoint presentations on standard feature phone handsets that would otherwise be unable to support such functionality.
Synchronica says that the AxisMobile acquisition will also enlarge its footprint in emerging markets, by adding a strong sales force and key customer contracts in the relatively untapped areas of Eastern Europe, CIS and Russia, to Synchronicas existing sales presence in the Middle East, Africa and Latin America. Currently, AxisMobile has eight live customer installations with major mobile operators, predominantly in Central and Eastern Europe and China. Customers include MTS, the largest mobile operator in Russia and CIS with 84 million customers; Megafon, a Russian mobile network operator with 34 million customers across 88 regions of the Russian federation, including its Moscow subsidiary Sonic Duo; T-Mobile; and E-Plus, Germanys third largest mobile network operator, with 13.6 million customers. AxisMobile has also secured contract wins with a leading Ukrainian mobile network operator, a further leading Tier-1 Russian mobile network operator, and a leading Swiss mobile network operator. 
Forecasts point to emerging markets as a breakthrough area for mass-market mobile email. Informa predicts that there will be 4.81 billion mobile phone subscribers by 2012, with the next billion subscribers coming from emerging markets, where PC and fixed-line penetration is low.
“The fundraising and the acquisition of AxisMobile is a dramatic acceleration for Synchronica, and I believe that it will build value for our shareholders,” says Synchronica CEO, Carsten Brinkschulte. “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. 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.”
Synchronicas Mobile Gateway delivers push email and mobile synchronization of calendar and contact data targeting consumer and business users with connectors to mass-market mailboxes such as Yahoo or Gmail, as well as business mailboxes such as Microsoft Exchange or Lotus Domino. Mobile Gateway does not require users to install additional software on the handset or behind the firewall and instead uses the dominant open industry standards push IMAP and SyncML to synchronize the built-in email and PIM applications pre-installed on more than 1.5 billion handsets in the market. With the injection of AxisMobile technology, even the most basic phones will be able to send and receive email, further expanding the addressable market for Mobile Gateway in the consumer sector and in particular in emerging markets where low-end devices are dominating the market.
