Duolog expands into US market
10th September 2006
Duolog, a Dublin firm that develops technology for mobile phones and other wireless devices, is targeting the United States in a bid to triple its revenue to €15 million in three years.
The company has just raised €1 million in equity and loans and plans to raise further investment to finance the expansion.
Ray Bulger, the founder and chief executive of Duolog, said the company planned to gain the scale to compete internationally.
Duolog had revenue of €5.2 million last year, but hopes to increase that figure to between €15 million and €20 million by 2009. Bulger said the company was profitable and had invested heavily in research and development.
‘‘We have put a lot of time and effort into R&D and have products on the shelf,” he said.
‘‘Our objective now is to scale the company. We have been growing at 20 to 30 per cent a year. We could continue that level of reasonable growth or take the plunge and expand.”
The new investment came mainly from Duolog’s existing backers, which include Enterprise Equity, entrepreneur Jim Mountjoy and private clients of Davy Stockbrokers. The company has raised a total of €4.5 million since it was founded in 1999.
Duolog initially provided chip design services, but has focused on so-called virtual silicon validation technology in recent years. Bulger said the firm already had a deal for the technology with one of the three main players in the sector, giving it a head-start over competitors.
‘‘This is a new sector that is estimated to be worth €100 million and there are no players in it yet,” he said. ‘‘It is there for the taking. We had revenue of nearly €3 million from this product last year, and will do a full launch next year.”
The company expects modest growth in revenue this year to about €6 million. However, Bulger said that Duolog had the potential to grow rapidly as the silicon validation market developed. ‘‘The turnover from this product will allow us to be aggressive.”
Bulger said that Duolog would invest the new funds in marketing and sales, particularly in the US. It also plans to raise more funding, possibly from US venture capitalists.
‘‘Compared to the Irish market, there is a quantum leap in the level of funds available in the US,” he said.
‘‘It would also push the profile of the company and give us a wider set of investors.”
Duolog is close to signing a number of significant deals, which could help finance the expansion. It is also in discussions with its existing investors and EnterpriseIreland.
While the firm has reinvested its profits in growing the company, it will need extra funds to boost its rate of growth, Bulger said. ‘‘We could stay in our comfort zone, but we won’t get to a serious level with current growth. Every multiple of €1 million means a lot to us.”
Duolog employs almost 120 people, including about 60 in Dublin and Galway. It has more than 50 staff in Budapest and a small number of staff in India. The company has worked with Intel, Texas Instruments, IBM and Sky, and last year won a deal with the European Space Agency.
Bulger said the company had been forced to be innovative because the technology and telecoms markets changed so fast, particularly after the dot com boom and bust. ‘‘Our product portfolio is completely different to what it was in 2000.“We have to constantly adapt”.
‘‘Now we are well-established and are well-known in our markets. We will be going very actively for the US, and if we can convert that opportunity, we can do very well. I see no reason why we can’t be a significant international player,” he said.
Bulger is a former managing director of Silicon & Software Systems (S3), a Dublin-based division of the Philips group.
Earlier this year, S3 raised €10 million in funding from ACT Venture Capital and the company’s management took a stake in the business.
Bulger said it was encouraging to see Irish chip companies such as S3, Lightstorm Networks and Redmere Technology attract significant investment to compete internationally. ‘‘If they can make it, it would be brilliant for Ireland,” he said.
The Sunday Business Post – 10th September 2006