New investment in technology is reportedly down this year, like everything else, but venture capitalists (VCs) are still plowing cash into wireless and mobile. The general idea in venture investing, which is almost always high-risk, is to build a fund, parcel it out after careful due diligence, and hope that at least a couple of the investments in the fund will be home runs. The time horizon is at least three or four years, and the thrill of participating in a start-up (which is even better than being an analyst, I might add) is part of the bargain. Cool new technologies with great economic potential make life worth living.
I recently spoke with representatives of Granite Ventures and Commonwealth Capital Ventures to learn what they like these days. This isn’t an exhaustive report, of course, but a few of the topics we hit on are very interesting indeed:
– Femtocells are an area of focus at Granite, as they have an investment in fables IC vendor Percello, who are building a baseband chip for femtocell applications. I would still argue that femtocells should not be the preferred approach; instead, I recommend the converged cellular/Wi-Fi strategy that makes better use of available spectrum. But there’s little doubt at this point that femtocells are indeed going to have a major impact on the wireless world, particularly in the residence.
– Enhancements for subscriber units, including improved cameras and gyroscopes (perhaps offering better performance in position-sensing that accelerometers), were mentioned. No doubt about this one, either, we’re going to see ever more functionality added to handsets for the foreseeable future. Focusing on implementation technologies, rather than specific devices, also makes sense.
– Industrial radios and machine-to-machine were mentioned by both. This is very interesting, partially because I don’t think the full potential of this opportunity is generally appreciated, and because there is still a lot of innovation in this space. It’s not just about ZigBee or even Wi-Fi – the RuBee (IEEE 1902.1) standard was mentioned, and this low-frequency RFID-like technology is indeed worth a look. The whole sensors/smart buildings space does indeed seem poised for growth, although business cases and ROI models are immature as of now. Granite is also an investor in Ozmo Devices, who build Wi-Fi PANs – another concept I just love.
– Both firms mentioned a strong interest in mobile applications, including music apps, games, enterprise apps, and more. Again, no arguments here – with app stores shaping up as the preferred distribution channels, all that remains is the marketing. After all, has anyone actually explored all of the 40,000+ iPhone apps? How would one even know what to search for? SAAS was also mentioned, and I’m already, as you know a huge fan of that.
– A few other topics, including broadband IP backhaul (a potentially huge growth business as wireless data services continue to expand), were mentioned. I was impressed by the range of interests expressed by both, an indication of the amazing scope of wireless as well as the merits of a diversified investment strategy.
Me, I like network and device management, Web services, 4G technologies (particularly semiconductors and antennas), and LINUX-based operating environments. Regardless, the investment opportunities in wireless remain robust – and exciting isn’t too strong an adjective here, pretty amazing for a field that’s well over 100 years old.
