Scottish product design agency Filament has taken over software development consultancy Arceptive to create a full end-to-end IoT product development agency.

The addition of Arceptive takes Filament’s headcount to 29 and, following a year of integration and alignment, the agency expects the merger to double its turnover from last year’s £1.75m by the end of 2027.

Since launching in 2019, Arceptive has delivered digital infrastructure for hardware companies, serving clients from start-ups to multinationals across the UK and Europe. The consultancy specialises in software engineering, cloud architecture, data science and machine learning.

Arceptive (arceptive.com) was founded by Stefan Raue and Cham Abeyratna, who have run businesses and built engineering teams together since 2015. They bring more than a decade of hands-on experience founding companies and leading engineering teams across industries including finance, wearable devices and sports-tech to the Filament team.

Filament and Arceptive already share close ties, having worked on multiple projects together including for Transport Scotland, a range of Scottish government-funded sustainability projects, and the co-development of Nooku, an IoT start-up that provides air quality monitoring systems for social housing. The companies are also already both based at Skypark’s The Beyond co-working space in Finnieston, Glasgow, which Filament co-founder Gregor Aikman helped establish.

Combining the companies’ expertise creates a full end-to-end IoT product development agency. It will also allow Filament to support clients bringing smart products to market more quickly and competitively, particularly in regulated environments such as med-tech and wearable health devices.

Filament has delivered projects for a broad range of businesses, including international brands such as Hotel Chocolat, Tchibo and Ikea, as well as early-stage companies and university spin-outs, most recently through the University of Glasgow’s Infinity G programme. Co-founders Aikman, Craig Lynn and Danny Kane have been in business together since 2008, founding Filament (www.filamentpd.com) in 2015.

“For the past ten years, we’ve focused on our core competencies and organic growth, but all of our projects have had a software element to them and more than 80% had an IoT or smart aspect too,” said Kane. “So, combining with Arceptive felt like the next natural iteration of the business. We had aligned our systems and ways of working from sharing projects over the years, and this gives our clients the best of both worlds: a full-stack range of services and the agility of a boutique agency. The size of the combined business puts us in a real sweet spot, and it’s also an opportunity for us to scale, diversify our income streams, and develop our own IP.”

Raue added: “We know how each other works, we share the same standards, and we’ve already proven what we can do together. Bringing the two organisations together under one roof simply means we can do it faster and better.”