Cyden

Origins

From the very start, the founders wanted to create a consumer device and knew they could make light devices smaller, cheaper and, at the same time, clinically more effective.

Our main challenges when starting the business

The first challenge was to create professional devices that were much better than those already in the market and much lower cost. This would give clinical and professional credibility before stepping into the consumer market. However, when founders established the company, they needed to raise money to get things going. This is difficult for a pure start-up as getting £50k is almost impossible (and it is actually easier to raise £2m), so the 4 founders utilised credit cards and secured a bank overdraft, thereby taking all the risk. Small grant funding followed for innovation but that takes a lot of time to secure. Finance was definitely a challenge and they lived hand-to-mouth for the first few years until £1.9m in private equity was raised in November 2004. The cost of IP was also significant and because the technology was ground breaking, it needed to be protected with patent applications. Filing patents and maintaining applications was a cash drain on such a young company but critical to giving the company the freedom to operate. Proving the technology worked was one challenge but then showing clinical evidence that it removed hair, treated pigmented lesions, treated acne and provided skin rejuvenation was a significant hurdle, especially with little cash to do it with. Clinical efficacy was critical before any finance could be raised and evidencing that Cyden’s technology was smaller, faster and better but backed with evidence that it worked and was safer than other products was key to raising funds in 2004. Route to market was another challenge and the challenge here was getting partners interested before the product was ready to launch. If the distribution channels were ready to go in one or two markets, then the company would have a real proposition to take to investors – a proven technology which was IP protected, clinically effective and safe to use and distribution partners ready to go. The firm managed to secure to partners who had already established brands in the beauty salon and dermatology sector, one in the UK and one in the US and by supplying a co-branded product which would benefit from their already established market presence, this gave Cyden immediate market access post-launch and helped with the fundraising.

Success Factor

Having a groundbreaking technology platform which has enabled products that compete globally has been essential. Protecting IP thereby ensuring freedom to operate and understanding where this technology and associated products meet growing market needs were critical to success. Secondly, an IP lead business with global market potential needs cash and finding an equity finance house that brought cash and management expertise to the business was a significant contribution to the firm’s development. By introducing private equity investors – high net worth individuals – the company also significantly extended its networking capabilities which led, ultimately, to the partnership with Boots. The third round of funding brought in Unilever Ventures which has further extended the firm’s potential market reach in the consumer field. Finally, people. None of the above works without skilled, committed and dedicated people and the founders were quick to realise that they did not possess all the skills needed to build the technology and the business and have brought in, at all levels, people who make a difference. The team of people in the business are priceless and Cyden’s nomination in this year’s Fast Growth 50 is down to them.

The Future

The company is now pursuing aggressive growth backed by a recent investment round of £11m., and anticipates sales growth from £5.5m in 2010 to £20m in 2011 as it takes advantage of a leadership position in a rapidly growing market. This will be achieved by establishing strategic partnerships with global brands capable of accessing multiple markets in both the hair and skin categories, launching the skin rejuvenation product in April 2011. The market is anticipated to grow to over £1bn within the next 2-3 years and Cyden is well positioned to play a lead role.