AwayPhone gets connected
Article Date: Feb 09 2007
Trying to obtain funding for a start-up is no easy task, according to Sherry Madera, the straight-talking CEO of international mobile operator AwayPhone.
‘There is an equity gap in the UK,’ she says, referring to the trials and tribulations of getting the company off the ground at the end of 2005.
‘We tried to get angel financing and found it difficult. Any business looking for under £500,000 is in trouble. For a technology company it is a challenge to get in touch with people who understand the business.
‘The scope of investment among angels operating below that £500,000 mark is so broad, ranging from hair salons to bakeries. We wanted someone who could really help us.’
Madera suggests that the regional development agencies may be in need of a shake-up. ‘They could have some specialisation within their ranks,’ she says. ‘It would allow them to make a better decision about what they invest in and therefore make a better return.’
Not that any of this is an issue for Madera now, especially after Johnny Hon’s private equity and venture capital outfit Global Group stepped in as lead financier, along with angel investors. ‘We now have a corporate investor who really understands the business,’ she says. ‘This is of real benefit to us.’
AwayPhone has made some big strides in a short period of time. ‘We gave the business a trial run from November 2005 to March 2006, trying to gauge if the demand was there. The response was a resounding “yes”.’
The trial consisted of 75 executive travellers from companies such as drinks giant Diageo to financial services powerhouse Merrill Lynch.
AwayPhone’s proposition is to provide a service for business travellers, promising savings of up to 90 per cent on phone costs through using internet routing known as VoIP (Voice over Internet Protocol).
Only the local portions of a call are fed across mobile networks. Customers are also provided with a local number and calls to usual, fixed and mobile numbers are diverted to the AwayPhone handset so regular contacts do not need to change their dialling information.
A high price
Madera came up with the idea for the business while working for the merchant banking group London Asia. She used to do a lot of travelling and noticed when it came to conference calls and local calls it would cost a huge amount.
At present, AwayPhone has 87 different partners and operates in 78 countries. As to why AwayPhone can be so much cheaper than the larger operators, Madera says this is because the established organisations have a lot of infrastructure. ‘They make their money on roaming charges and use the profits for their other services,’ she claims.
Although the company is based in London with a core of 12 staff, Madera says the aim is to start recruiting in order to open offices in Asia Pacific, Europe and North America.
Like any growing business, finding people with appropriate skills has been a challenge. ‘We are a unique prospect as we have one foot in the mobile technology arena and one foot in internet technology. Getting people with experience in both areas is a tough ask,’ she says.
The level of innovation in the mobile technology sector means that keeping track of the latest changes in various countries and what customers want is quite demanding. ‘We are constantly on the lookout for feedback,’ she says.
Madera clearly enjoys running the company and seems to take pleasure in overcoming the difficulties that arise. As for the immediate goals for AwayPhone, she is concentrating on profitability.
‘I’m interested in ensuring the finances are right. I want this to be a strong business,’ she says.
