Satellite technology developer Sofant is set to create a dozen or more new jobs in Edinburgh after sealing a multi-million pound investment round and securing its first commercial contract.

The company expects to finish development of its communications terminal next year following a £4.2 million equity injection from existing investors EMV Capital, Kelvin Capital, Scottish Enterprise and the British Business Bank's Future Fund. The deal closed as Sofant also signed its first commercial contract with a Fortune Global 500 defence contractor for the development of a next-generation tactical communications system.

The firm's technology – a combination of antenna design and machine-learning algorithms – uses 70 per cent less power than existing systems, which stops antennas from getting too hot. This eliminates the need for expensive cooling systems.

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Chief executive David Wither said Sofant was "very pleased" to have investors who understand the disruptive nature of the company's technology.

"Sofant will use the proceeds from this investment round to build a satellite communications terminal in 2023 which targets mobile applications, with commercial sales expected to begin later in the year,” he added.

Set up in 2011 as a spin-out from the University of Edinburgh, Sofant currently employs 18 people but expects that to rise to between 30 and 35 as activity ramps up.

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The company was founded by Ahmed El-Rayis, Nakul Haridas and Tughrul Arslan following seven years of research and development at the university. EMV, Kelvin Capital, Scottish Enterprise and Old College Capital are its four largest shareholders, with the remainder owned by the management team and staff.

“Sofant will play a significant role in the future of a wide range of wireless communication systems and its value is already being recognised by industry leaders," Mr Wither said.