Amadeus Capital Partners Limited today announced that Entropic Inc, a company based in Cambridge and Washington DC, has been acquired by Microsoft. 

Amadeus first invested in Entropic in March 1998. At that time the founders agreed that a new product strategy was needed and that the management team would benefit from further strengthening. Entropic’s advanced voice recognition and speech synthesis toolkits were the industry de facto standard and were used in research laboratories around the world.

Amadeus recognised the potential of the technology and the high-calibre team led by Professor Steve Young who was both part-time CTO at Entropic and a Professor in the Engineering department at Cambridge University. Amadeus also introduced OAK Investment Partners, a Silicon Valley venture capital company as a co-investor in Entropic.

Subsequently Amadeus helped recruit a new CEO, Paul Finke, previously Vice President of the Bay Networks IP services division. Paul joined Bay Networks in 1995 following the acquisition by Bay of his former firm, Performance Technology Inc. Since that time Entropic has developed a new strategy to create innovative products and services to enable internet access from mobile phones. The company was re-positioned as a products and services company focussing on server-based telephony products to access the internet, and in particular the wireless market. The result has been that Entropic’s Voice Gateway enables access to information on the internet by using normal speech over the phone.

Following an additional Amadeus investment in Entropic in 1999 and an approach from Microsoft, Amadeus helped management negotiate terms with Microsoft. Sir Alec Broers, Vice-Chancellor of Cambridge University, commented “this is an example of Cambridge University’s outstanding innovative technology being helped on its way to the world marketplace by Amadeus”. Cambridge University is a shareholder in Entropic. 

Most of Entropic’s 40 employees in Cambridge will continue to work in Cambridge, whilst the majority of the 15 Washington DC-based employees will relocate to Microsoft’s operations in Redmond, USA. Professor Steve Young will continue to drive development in the UK and will retain his association with Cambridge University as Chair of the Speech, Vision and Robotics Group. Hitesh Mehta, a director of Amadeus Capital Partners in London commented “this acquisition shows that UK technology is world-class, and is a positive endorsement that our model of ‘Silicon Valley style’ value-added venture capital really can make a difference. We are particularly pleased that we convinced Microsoft to retain a development facility in the UK”. 

Amadeus Capital Partners Ltd, a UK-based venture capital fund, was founded in 1997. The company offers investment, vision and expertise to high tech and internet companies in the UK and Ireland. The size of its first fund, Amadeus I, is £50 million and the current portfolio includes 18 companies, among these are Orchestream, Prosum,, Mediasurface, and ThinkNatural. The directors of Amadeus are Anne Glover, Hermann Hauser, Peter Wynn and Hitesh Mehta, who all have have significant operational and investment experience in the information technology sector. Amadeus’ investors include Gilde, Microsoft Ventures, BancAmerica, European Investment Fund, Lazard, Reuters and Global IT Fund.