Data#3 secures $2.5m stake in Wi-Fi market with Discovery

Summary:Subject to the approval of its board, Data#3 will have a minority shareholding in Wi-Fi analytics company Discovery Technology.

Data#3 has plans to implant itself in the growing Wi-Fi market, announcing it has secured an option to acquire a minority shareholding in Wi-Fi analytics company Discovery Technology, with the potential of extending the investment into a controlling position by June 2015, and an acquisition by June 2017.

Data#3 is a reseller of Discovery's flagship solution, Connected Customer-xperience (CCX), an analytics, location, and customer communication software tool that is deployed over Wi-Fi networks.

Data#3 managing director John Grant said the investment to secure a stake in the Wi-Fi sector — anticipated to be worth in the range of AU$2.5 million — aligns with the company's strategy to capitalise on the cloud space.

"Industry analyst Gartner recently reported that, with almost 70 percent of adults in Australia now owning Wi-Fi enabled mobile devices, 86 percent of them looking for local information on their device as they move about and 88 percent taking action as a result, the opportunities that are emerging to respond to these behaviours and to enhance their experiences through their Wi-Fi connectivity have never been greater," he said.

"This move aligns with two elements of our strategy — to be a leader in the cloud marketplace, and a participant in the applications sector particularly where it influences our customers' downstream investment in infrastructure and managed services."

Grant said while he is unable to disclose the percentage of the initial minority shareholding, he said it's a "non-controlling, but a substantial share".

Subject to finalisation of due diligence and approval to exercise the option by the Data#3 board, it is expected that completion will occur in July 2014, and when full transaction details are also expected to be provided.

Data#3 said it intends to fund the investment from surplus cashflow, and will have the right to nominate one director to the board of Discovery.

The company also plans to retain its reselling relationship at "arm's length", and will manage it separately from the investment.

Discovery co-founder and shareholder Brendan Williams said the strategic investment by Data#3 will help strengthen Discovery's relationship it has with Cisco, as well as provide it with "financial support, guidance, and stewardship a typical start-up technology requires to deliver the outcomes we see are possible".

Topics: Cloud, Australia, Wi-Fi

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Since completing a degree in journalism, Aimee has had her fair share of covering various topics, including business, retail, manufacturing, and travel. She continues to expand her repertoire as a tech journalist with ZDNet.

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