Published on Thursday November 12th, 2015
By The Herald
SENSEWHERE, the provider of indoor location solutions, has bolstered its global growth ambitions after receiving a “very significant” investment from Tencent Holdings, the Chinese internet services company.
The University of Edinburgh spin-out did not disclose the value of the deal, or reveal the size of the stake Tencent has acquired.
But it said the planned roll-out of its solutions to millions of users in China and neighbouring markets was a major boost in its ambition to provide a “truly global solution for indoor positioning”.
The deal with Tencent will allow the Chinese company to provide an indoor location solution to its services in the social media and gaming arenas, as well as the mobile advertising market.
It means Sensewhere has become Tencent’s preferred vendor for location-based advertising services in China. Sensewhere will also look to extend its database of location and positioning services, and ramp up its operations in Scotland as a result of the investment.
Chief executive Rob Palfreyman said: “This investment by Tencent will be significant for the company and is an endorsement of our technology, strategy and ability to deliver low cost, highly scalable and highly accurate universal indoor positioning.”
“I am thrilled with the collaboration, and having Tencent as a strategic investor will help take sensewhere to the next level and assist us growing our customer base, building new location-based services and investing further in R&D.”
The solution designed by Sensewhere, which spun out of Edinburgh University in April 2010, provides a positioning service to end-users indoors, where GPS services are weak or inaccurate.
The company has used its technology to build up a map of access points or beacons, which customers pay to dial in to.
It is already been used in North and South America, including network operators and mobile handset manufacturers, who are looking for a better performance from phones where GPS is not available.
The deal with Tencent means users of WeChat and QQ – Chinese messaging solutions – can continue to use the service in area where there is no effective GPS.
Mr Palfreyman’s arrival at Sensewhere in 2009 marked a switch in its focus from location-based software to hardware. He said the company turned its attention to the Chinese market in August last year, having previously focused on pitching the technology to Apple, Facebook and Google.
“It seemed to make sense,” he said: “There are a lot of homegrown solutions [in China], for example Tencent’s WeChat and QQ is very similar to Facebook. A lot of the restrictions in China, where Google and Facebook can’t operate, [means] they have their own homegrown services. We felt that the middle of last year was as good a time as any to go out there and investigate.”
Working closely with Scottish Development International, meetings were set up with companies in the Far East with a view to taking the technology to China. Tencent tested the software over Christmas and by February it has signalled its interest in investing, Mr Palfreyman said.
“The immediate project is to deliver the software and have that integrated on to Tencent’s platforms. We have a team of engineers out in China right as we speak doing just that. But we will also be continuing to develop the IP – this is a fast-moving space.
“We will be focusing quite heavily on R&D, improving the power consumption, improving the accuracy, improving the user experience and building the database. Those are our immediate goals.”
Sensewhere received its first external investment in May 2011, which came from Chairman Jim Divine and his associates.
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