Further funds are earmarked for follow-on rounds, according to investment director Jo Oliver who led the deal on behalf of Octopus.

Jonathan Reynolds, CEO of TouchType, remarks, ‘The investment will allow us to accelerate our product and commercial development and help us make a substantial market impact with our prediction technology.’

TouchType began trading in August 2008 and secured its first contract with a phone manufacturer earlier this year. Negotiations with other manufacturers are underway.

The company claims that its technology boosts writing efficiency by up to 50 per cent compared to a QWERTY keyboard.