Wireless firms draw investments

Private companies with wireless -related products, particularly broadband wireless, garnered significant interest from venture capitalists during the third quarter, with the two largest deals going to such start-ups.

During the third quarter, 41 wireless companies received $455 million in investments from venture capitalists, according to the MoneyTree Survey released by PricewaterhouseCoopers (PwC), Thomson Venture Economics and the National Venture Capital Association. That's the highest level of investments in the wireless segment in four years, says Tracy Lefteroff, global managing partner of PwC's venture capital and private equity practice.

During the first three quarters of this year, 114 wireless-related companies saw $984 million in investments, compared with 135 companies garnering $1.1 billion during all of 2004, the report says.

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Private companies with wireless -related products, particularly broadband wireless, garnered significant interest from venture capitalists during the third quarter, with the two largest deals going to such start-ups.

During the third quarter, 41 wireless companies received $455 million in investments from venture capitalists, according to the MoneyTree Survey released by PricewaterhouseCoopers (PwC), Thomson Venture Economics and the National Venture Capital Association. That's the highest level of investments in the wireless segment in four years, says Tracy Lefteroff, global managing partner of PwC's venture capital and private equity practice.

During the first three quarters of this year, 114 wireless-related companies saw $984 million in investments, compared with 135 companies garnering $1.1 billion during all of 2004, the report says.

"The wireless area has been a hot spot," Lefteroff says, adding that wireless companies could be the force that lifts the networking and telecom sector out of its five-year slump.

The creators of the MoneyTree Survey produce a slice of data for Network World that tracks network-related companies, including those in networking and telecom equipment and services, computer hardware and software and semiconductor markets.

"A lot of companies lost a lot of money in this sector over the last five years, but there's definitely going to be some growth in the future, and wireless is something that's going to attract investor money and build customer bases," Lefteroff says.

FiberTower, which builds backhaul networks based on microwave technology that connect cell towers to central offices, topped the charts with $150 million. Visto, a wireless-messaging application and service provider, received $70 million.

Click to see: More malaise

"By definition, what we do is look at things that are somewhat over the horizon," says Michael Greeley, general partner with IDG Ventures, who listed wireless mobility as one such area. "I count this [past] quarter as very good. The sentiment now is we can finally begin to make money again."

Among the broadband wireless companies that saw third-quarter investments was Aperto Networks, developer of wireless access systems, with a $17 million round. The company's 802.16/WiMAX base stations and subscriber units are sold to service providers.

Pronto Networks received $3.2 million in investments to help build its Wi-Fi and WiMAX infrastructure business. And $2 million went to LCG Wireless, maker of 3G and in-building wireless infrastructure products.

Overall, network-related companies had investments totaling $2.5 billion for the third quarter, down slightly from the $2.9 billion invested in the second quarter, which is traditionally a slow period This past quarter's investment levels in network-related companies was up slightly from the $2.3 billion garnered during the same period last year.

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