Bristol, 07 November 2013 – BGF, the independent company established to provide growth capital to the UK’s growing businesses, today announced its £2.45m investment in Sub10 Systems (Sub10), a specialist designer, developer and vendor of class-leading millimeter wave (“MMW”) wireless solutions for mobile telecoms.

This is the seventh investment to be led by BGF’s regional team for the South West of England and South Wales and Sub10 is the first business to be backed by BGF in Devon. The investment was managed for BGF by Ned Dorbin, Alex Garfitt and Edwin Davies. Sub10 was introduced to BGF by law firm Foot Anstey in Plymouth. Several other advisers from the South West were also involved in the transaction.

The business has grown rapidly since its formation in 2010 and is forecast to deliver FY14 revenues of c.£10m. The company’s head office is in Newton Abbott, Devon, and it currently employs 37 people.

Sub10’s products are high speed wireless devices for data transfer across mobile networks where historically data transfer has been slow and unreliable. The company’s customers are primarily telecommunications companies and network operators. Due to the growth in mobile data traffic, many operators are using wireless to save on radio spectrum usage and thereby increase efficiency. This can be achieved by using products such as Sub10’s wireless links where plenty of data spectrum is available for relatively short, high speed, point-to-point data connections. This is ideal for densely packed communications networks such as urban areas and Sub10’s products will help to improve the performance of mobile networks.

Sub10’s aim is to develop the smallest, best in class MMW wireless solutions which are cost effective and installer friendly. The company exports 90% of its products and currently the majority of its sales are to operators in Eastern Europe, Russia and Turkey with the remainder to the UK and Ireland.

The investment of growth capital from BGF will support Sub10 as it invests in R&D, recruits additional staff, increases sales and marketing spend, and will provide additional working capital so that Sub10 can meet larger future orders.

BGF has also introduced Richard Atkins via its Talent Network to the business as Non-Executive Chairman. Atkins has broad IT and telecoms experience having spent his executive career with IBM Global Services as well as significant chairman and Private Equity experience.

Sub10 is well-placed to grow rapidly in an expanding market. Driven by 4G network rollouts, mobile operators are expected to increasingly invest in metro and small cell networks to cope with this increase in data usage. Global data traffic grew 70% in 2012 and is expected to continue increasing at an exponential rate. The potential addressable market size is estimated to be more than £1bn by 2018.

Stuart Broome, founder and CEO of Sub10, commented:

“Many of the team here at Sub10 gave up secure jobs with the likes of Motorola to start a business that we were passionate about and one that we felt had significant potential for growth. There was a real gap in the market for Sub10’s products and our decision is certainly paying off; there is now considerable expansion within the industry and our Ethernet bridges are gaining increasing traction with the large telecommunications firms and integrators worldwide.

“This offers Sub10 real growth potential. BGF’s investment will allow us to further develop our range of wireless products in line with customers’ demands whilst also funding an increase in our sales and marketing efforts to target larger customers and orders.

“We looked at a number of financing options and then were introduced to BGF by Foot Anstey. Having spent time with the BGF team we feel confident that they are the right fit for us and look forward to an extremely bright future together.”

Ned Dorbin, Senior Investment Manager, commented:

“Sub10 is a relatively young company and it is growing rapidly as a result of the work of an extremely experienced management team and their ability to carve out a niche in the expanding MMW wireless solutions market.

“BGF’s long-term equity finance is well-suited to technology companies’ investment plans, especially where the company is growing like Sub10 and where the business case often works best over extended time periods. We are delighted to be investing and are also very pleased to be backing such an ambitious team and an innovative South West business. We hope this is the first of many such companies from this region that BGF invests in.”