Loop founder to replace CEO as rights issue launched

Stuart Corner
Tuesday, 22 July 2008 05:25

IT Industry - Strategy

The founder of mobile social networking company, Loop Mobile (ASX: LPM) is to return to run the company replacing CEO Martin Hoffman. The move was announced along with a rights issue an comes just days after the company, which counts Telstra, Optus and 3 Australia as its customers, scored its first deal with a major US mobile network.

Hoffman will resign on 31 July 2008 to focus on his other new media and technology investments. At the request of the board and significant shareholders, he has agreed to continue as a non-executive director. Ian Rodwell who founded Loop in 2004 and who is currently head of technology and products will assume the role of CEO and managing director. Chairman Greg McCann thanked Hoffman "for his significant contribution to the establishment of Loop Mobile as an independent public company and its progress to date."

The one for two non-renounceable rights issue at five cents per new share is expected to raise $1.5 million before expenses. The new capital will be used by the company to continue the roll-out and marketing of its services in Australia and overseas.

Loop was founded by Rodwell in Perth in 2004 and went public in June2007. It provides an integrated mobile and online instant chat, user generated content, and social networking community globally to carriers and major brand properties, as well as directly to consumers via mobile web and the web and targeting the youth and young adult demographic.

The company's flagship service, MOKO.mobi, is implemented as a white label service across the 3 Mobile Australia, Virgin Mobile Australia and Optus networks and will be launched by Telstra in August. Loop announced last week the launch of MOKO with US 3G network, Helio. Philippines operator, Smart is due to launch in Q3.

Loop claims that MOKO "combines instant chat, user generated content, social networking tools, music profiles & content, to create one of the world's leading mobile & web services." MOKO is also available worldwide to any cellphone user via the Mobile Web and Web at www.moko.mobi.

The company says that MOKO is not intended to be a competitor to major Web social networks, but is designed to appeal to a different, and emerging demographic. "MOKO focuses on instant connections where users can meet new friends, and not just their existing 'real-world' friends," and that for its typical customer, "Mobile is their primary connection to the web, PC is secondary. Typically [they are] from outer suburban environments and 'fringe' sub-cultures [and] belong to 'socially expressive' consumer segments."

Loop remains headquartered in Perth but now has staff in Sydney and London and representatives in the USA, India, Dubai, and South East Asia. It has signed a MOU for a joint venture in India with Radical SoftNet to establish a localised Indian version of MOKO using the MOKO brand.

Loop says the JV is currently negotiating toward the first deployment for MOKO with Indian mobile operator, Idea Cellular, with launch potentially in late 2008. It adds that Radical SoftNet - a subsidiary of one of India's largest mobile phone and ancillary product distributors - "has relationships with all Indian carriers and there is the potential for further launches during 2009."