Zamano raises €2.5m to cut its debt and drive expansion

ZAMANO, a mobile telephony applications provider headquartered in Dublin, has raised €2.5 million, in venture capital, which it plans to use to drive its international expansion and cut its debt levels.

The funding comes entirely through the transfer of 3.9 million shares in the company to the Ulster Bank/Diageo Venture Fund – which is managed by NCB Ventures – and will result in the fund becoming a significant shareholder in Zamano, with an approximate 15% stake.

Zamano is using €1m of the fresh money to pay off more of its debt. By the end of this year, Zamano’s debt will amount to €2.7m; down from €7.7m at the end of 2008.

The remainder of the funds will be used to develop a new suite of smart phone applications and to fund its expansion into new international markets.

Zamano already has a significant international presence – with footholds in Britain, Spain, the US and South Africa. The company is also eyeing up entry into the potentially lucrative areas of Mexico and Brazil; two countries with high mobile phone penetration and a strong mobile internet market.

“The placing will put Zamano in a strong position as we enter 2010, with a strengthened balance sheet and the capacity to execute our strategy in an exciting new market for the group,” said the company’s chief executive, John O’Shea.

Mr O’Shea said that the extra shareholders would help take the company to the next stage of its development and said that the Zamano board remains comfortable with market expectations for profitability for the current year.

For its part, this is the third investment made by the Ulster Bank/Diageo fund – which specialises in investments of between €1m and €5m in Irish SMEs across various business sectors – and it is expected to make a fourth significant investment before the end of this year.