High tech firm goes west

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The Independent Online
Superscape, the most successful of the trio of quoted British virtual reality companies, is expected to switch its allegiance to Nasdaq, the US high tech stock exchange, following the shift of its headquarters from Hampshire to California. With Virtuality now in the hands of administrators, a once promising London mini-sector could be reduced to just one company - Division.

John Chiplin, Superscape's chairman, said last week that "it is an option to go on Nasdaq - it would be more suitable for Superscape than the London Stock Exchange". The company has raised $23m through private and public issues, mainly in the UK, but future funds would come from the US. This would be much easier if the company were listed on Nasdaq, Mr Chiplin said, because of the "critical mass" of high tech companies listed on it.

Share prices are much higher on Nasdaq, where the average price/earnings ratio is 50, against 18 for the FT All Share index. Sixty UK companies are quoted on Nasdaq, ranging from established groups such as Carlton to high tech operations like Select Software and Xenova Group.

Superscape, which produces 3-D simulation software mainly for business applications, has been increasing its exposure to the US. "Two years ago none of our business was with the US," Mr Chiplin said. "In the last financial year 53 per cent was." He has formed joint ventures with IBM, Intel and Microsoft, and has introduced an aggressive marketing culture. "We're taking an English technology boutique and turning it into a company that looks and feels like a US high growth software company."

The company moved its headquarters and sales operation to Santa Clara last year to be near its partners and customers. Product development is staying in the UK, "since in Silicon Valley people hop jobs, because the skills in the UK are excellent and because salaries are a lot lower".

Superscape is concentrating on 3-D software that runs on the World Wide Web.

The existence of three quoted virtual reality companies - the only ones in the world - has given an exaggerated impression of the importance of the UK in the sector.

Each covers a specialist area - Division produces sophisticated prototyping software, Virtuality is mainly in games while Superscape has moved to the Web - but the big US computer companies have VR sections that, together, are at least as important as the British contribution.