Belfast software firm Mobile Cohesion has ceased trading. The company, launched in 2002 by software industry veterans Denis Murphy and Richard McConnell, made software that enabled mobile operators to manage their relationships with content providers. A spokesman for Enterprise Equity, which had provided funding for the firm in 2006, confirmed that Mobile Cohesion had closed but could provide no further details.
That bites.
Mobile Cohesion was set up in 2002 and raised $4.8 million in 2006. but…
The company had racked up accumulated losses of almost £10.7 million by the end of the financial year to March 31, 2007, up from £8.9 million a year earlier. This represented an increase of almost 20 per cent in the company’s accumulated losses.
Despite its losses, the company’s turnover increased significantly in the year to March 31, 2007. It reported turnover of £228,572, up from £41,097 in the previous year.
Its software uses internet tools to make it easier for mobile operators to roll out a range of multimedia services.
It’s a bit of a blow to the local market that a digital content operator failed but it’s worth spending time investigating why. Obviously having revenue of £228,572 when your operating costs are ten times that is one of those reasons – was the product wrong? Too early? Too late? Too specialised?
That’s not exactly news – I think it closed over a month ago. Very sad news, I know for a fact they were trying very hard to make a go of it. Cruel timing also in the light of this report http://venturebeat.com/2008/07/06/mobile-ad-company-admob-is-about-to-kill-it/ I think Mobile Cohesion were very interested in the mobile advertising market.
Actually I think they shut their doors closer to 3 months ago…
Hey, it was on ENN today – I don’t pretend to be a news service.
It is terribly sad – I remember reading about them last year with a lot of interest but that’s a heck of a lot of burn ($$$) for such a short period.
And, if Northern Ireland tradition services, three companies will rise from the ashes all claiming the IP….populated by ex-developers
It is a pity, but how do you get that far in debt before shutting down? Surely it must ring a bell earlier that there is something wrong in the business model.
Well, any money you spend before you start making money is a loss – whether it’s a loan or whatever. You have to get the money from somewhere and a limited company, as a legal entity of itself, has no assets when it starts so it has to get money from somewhere.
It’s one thing if you are a sole trader or two blokes working out of a garage. But if you’re building something that needs 10 qualified and experienced engineers you’ve just spent over half a million right there in salaries, employers contributions, property, insurance, equipment, software and insurance (never mind pensions, company cars, travel, training, SG&A and the Xmas dinner).
In the Fiscal year ending in March 2007, they spent 1.8 million but we have no idea how many people they had, what costs were involved in their setup, the amount of travel required to be a global exporter and the marketing expenses to get into trade shows and the like. Also paying interest on the previous 8.9 million they owed.
I can see how they ran it up and I am surprised it went on like that but it must have been due to extraordinary investor confidence that, after more than 5 years, ran out. Their sales were simply too low – it took them 4 years to achieve £41K in revenue but the next year their revenue was £228K. For all we know, next year might have gotten them £1M…
It’s a sad story is all. And the market opportunity was just badly timed.