Israeli start-up IXI Mobile announced today a structural change in the company, including the firing of 70 of its 200 employees, and withdrawal of its planned IPO on the Alternative Investment Market (AIM) stock exchange in London.
As part of the change in its business, IXI will focus on manufacturing and marketing the Ogo, a device for transmitting texts, instant messaging, and e-mail. The company’s other division, which develops operating systems for end-user devices, is closing down. IXI said that the other division burned a great deal of cash and created no revenue, while the Ogo division was starting to generate revenue.
IXI develops end-user devices for transmitting messages and operating software for wireless end-user devices. The Ogo is not a telephone; it handles text messages, and simultaneous transmission of instant messaging and e-mail. AT&T Wireless (now Cingular Wireless) and IXI launched the Ogo in the US in September 2004.
IXI Mobile cofounder and CEO Amit Haller said, “We decided to focus on the business division, which produces and markets the Ogo, in order to appeal to the rapidly developing wireless messaging market. Following the success of the device in the US and great global interest in it, we decided that managing the division would require our full management attention in the near future.”
Sources close to the company said that IXI had tried to sell the division that closed down to Comverse Technology (Nasdaq: CMVT), among others, but had not managed to do so. Two months ago, as part of an attempt to save the division, IXI went on a road show for its AIM IPO. IXI was trying to raise $50 million at a company value of $150-200 million. Following the closure of its division, IXI’s IPO will be withdrawn.
Last October, IXI raised $25 million at a company value of $50 million, before money. The company has raised $62 million to date.
The idea on which IXI was founded was turning items such as pens, wristwatches, cameras, and clothing into platforms for wireless services and applications.
Published by Globes [online] - www.globes.co.il - on July 27, 2005