Firms Form Wireless Web Developer
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In a complicated transaction that will create a pure-play wireless Internet professional services firm, Web development shop K2Design Inc., venture capital player Unwired Ventures I, and wireless specialist SilverCube Inc. on Tuesday agreed to form a joint venture to exploit the potential of the wireless marketplace.
"We created the new company because we need to stay on top of the competing standards and technologies in this complex, fragmented and fast moving arena," said Matt de Ganon, executive chairman of K2 Design.
"This will allow us to quickly amass leadership in expertise and experience, with an organization clearly focused on a singular mission wireless applications."
Basically, K2 will shed all of its current wireless operations and give them to the joint venture, hoping that the combination of these resources, SilverCube's existing expertise, and Unwired Ventures' cash, will help the new, singularly-focused, company get ahead in this rapidly-changing marketplace. It's a way for SilverCube to gain more resources, and for K2 and Unwired Ventures, a partnership of Emerald Venture Capital, to get a stake in what they apparently believe will be a winning business model.
The complex deal calls for K2 to acquire a majority interest in the original SilverCube in a stock-for-stock exchange. Unwired will take a minority stake in the firm, in exchange for cash. Then, all three firms will contribute their respective interests to the joint venture. Unwired will then contribute more cash -- for working capital -- to the joint venture, in exchange for shares in the JV. K2 will end up holding the largest interest in the new firm. Meanwhile, Unwired Ventures has taken an undisclosed, but "significant" equity stake in K2, "as a vote of confidence in the direction the company has taken."
Initially heading up the operation as chief operating officer will be Greg Guidice, the founder and chief executive officer of SilverCube. Gary Brown, the chief operating officer of K2, will serve as interim chief financial officer.
The new SilverCube will create wireless content for its clients, as well as mobile commerce applications. Its services will include analysis, strategy, systems design, creative, and application development. The JV has partnered with Aether Systems Inc., a wireless software firm, which has already been working with K2. It will also inherit all of K2's wireless partnerships, including one with ThinAirApps.
Like many Web professional services firms, SilverCube aims to put together partnerships that cover all of the bases in the wireless arena, so its clients can come to the company for a one-stop shopping experience.
SilverCube has, thus far, concentrated on developing wireless content and e-commerce solutions for companies in the technology, automotive, manufacturing and public sector markets. Clients include General Motors, Edmunds, e-Chemicals and Automation Alley.