Texperts, a UK text message answer service, has revealed that it included just one venture backer in its recent funding round – because other sources of capital were more straightforward.
UK-based hedge fund Odey Asset Management was the main backer of the recent £1.3 million ($2.6 million, €2 million) funding round, although venture firm Bestport Ventures also participated. The balance was drawn from “a range of institutional and high net worth investors”.
Sarah McVittie, the company’s founder and chief executive, told PEO: “Because of our limited resources we chose to pursue different avenues for funding, because due diligence can be a lengthy process with venture capitalists.” These demands may well be justified – but hedge funds tend to work differently, she said.
McVittie said the business would look to float early next year, since this was an easier method of raising funds than seeking venture capital backing.
Texperts, which recently changed its name from 82ASK, is a service that allows customers to send in questions by SMS and receive answers within five minutes for £1. It is largely used by 19-35 year olds, characterised by the company’s spokesman as “people with disposal incomes and not a lot of time.” It has had an average monthly growth of 20 percent, despite no marketing to date, and is now looking to step up its advertising after developing the necessary technology to manage expansion.
The 29-year-old McVittie, who founded the company after quitting her previous role at UBS, is now regularly cited as one of the UK’s top young businesswomen.
Texperts said the new funding will be used to “launch an aggressive marketing campaign, designed to grow the customer base, increase question volumes and provide working capital.”
The company has also appointed two non-executive directors: Nigel Bramwell, chief executive of workforce management company Dual Holdings, and Richard Brennan, Orange’s executive vice president of global brand marketing and products.