Subject: [NEXTEL-1] Special Report: What Wireless VC Favorites Are Doing

From: [email-masked]
Date: Sat, 12 Jul 2003 05:27:48 -0400

Special Report: What Wireless VC Favorites Are Doing

Jul 02, 2003

On top of the $68 million it raised in two founding rounds last year, Good
Technology added some $27 million in a Series C round in May. Broadview Capital
Partners led the round, and existing investors including Kleiner, Perkins,
Caufield & Byers and Benchmark Capital, which participated on a pro-rata basis.
Good is using the funds to accelerate its market penetration and for product
development schedules. Good not only is winning funding, but it's also winning in
court in its patent-infringement battle with Research In Motion [Nasdaq: RIMM]. In
April, a California state court denied RIM's request for a preliminary injunction
against Good for the second time, finding that RIM failed to demonstrate a
probability of success on the merits of any of its claims.

Airvana's third round of financing generated $40 million, led by Matrix Partners
with additional support from Qualcomm [Nasdaq: WCOM], Matsushita and from investor
Gururaj Deshpande. Airvana is providing the channel cards that Nortel Networks
[NYSE/Toronto: NT] uses to upgrade CDMA2000 1X networks to EV-DO (evolution-data
optimization) level.  Brazilian operator Vesper is the first company to use the
Airvana channel card, with Nortel upgrading the carrier's CDMA2000 1X network in
the Sao Paulo area to EV- DO. It also will supply PT Wireless Indonesia with
all-IP 1X EV-DO radio access network infrastructure, including IP-RN 8000 radio
nodes, IP-RNC 8500 radio network controller and AirVista Web-based management
system for the carrier's CDMA2000 1X EV-DO network in Jakarta. Alaska
Communications Systems is using Airvana's radio access network infrastructure to
test the interoperability between the EV-DO network and its existing CDMA2000 1X
network.  Sonera SmartTrust spread its ownership around in late 2002, with the
Carlyle Group, GE Equity and Eqvitc Partners acquiring stakes. Carlyle, through
its Carlyle Europe Venture Partners fund, led the investment syndicate. Parent
TeliaSonera [Nasdaq: TLSN] retains a 39.3 percent shareholding. More than 80
mobile operators, including Cingular Wireless, MTN, Sonofon, Telenor, Satelindo
and Vodafone UK, use SmartTrust technology to launch and manage enhanced mobile
services and control mobile end-user applications and equipment. The additional
funding will allow SmartTrust to increase its investment in product development,
geographical coverage and future growth areas. In May, it extended its business to
support the delivery and management of mobile data services for MTV when the cable
channel launched a mobile virtual network operation in Sweden.

Monet Mobile Networks' closing of a $32 million financing round in 2002 coincided
with the launch of its second CDMA2000 1X market, in Fargo, N.D. Monet launched
service on the first U.S. CDMA 1X network in Sioux Falls, S.D., in October 2001.
It doesn't offer mobile service with roaming coverage, but high-speed Internet
access within the footprint of each of its markets. Existing investors Mayfield,
Soros Private Equity and Hook Partners added more funding. LG Electronics, which
supplied Monet with CDMA2000 1X infrastructure equipment, and CDMA technology king
Qualcomm invested as well.

Wi-Fi chip developer Resonext Communications started 2002 by gaining $38 million
in two funding rounds. It ended the year by being acquired by RF Micro Devices
[Nasdaq: RFMD], a provider of proprietary RF integrated circuits for wireless
applications. RF Micro acquired Resonext to expand its total addressable market
and to complement its growing presence in 802.11b products. Resonext's product
portfolio focuses on 802.11a and multi-band 802.11a/b/g technologies.

GCT Semiconductor pushed its total venture capital backing to $54 million when it
closed its Series C equity round with $38 million in December 2002.  The round was
led by Pequot Ventures and included National Semiconductor, Pericom Semiconductor,
UOB Venture Management, 3V SourceOne Ventures, Mizuho Capital and ITX
International Equity. GCT is using the capital to transition its products from
sampling into mass production, to expand its geographical marketing presence and
distribution channels, and to continue developing innovative products based upon
its direct conversion architecture.

Global Communications Semiconductor totaled $27.5 million with two closings of its
Series D funding round in 2002. Sirenza Microdevices and KLM Capital Group added
$10 million in the second closing after TCW/YFY Investment Partners led funding in
the $17.5 million first closing. Global Communications said the funding proves the
validity of its pure-play foundry business mode.

IPWireless added $27 million to its VC backing with funding from Bay Partners,
Doll Capital Management, Gabriel Venture Partners, JF Shea & Co., Northwood
Ventures and Oak Hill Capital Management. The company, founded in 1999, lists
Sprint [NYSE: FON], Clearwire Technologies, Teewinot Wireless Data and Maui Ski
Fiber among its customers. It says major wireless operators in Europe are testing
it technology; it expects mobile operators in China, Malaysia and the Philippines
to begin testing soon.

Ensemble Communications is a beneficiary of investors' re-emerging interest in
wireless broadband other than Wi-Fi. It bagged $25 million in equity financing
from new investor Ampersand Ventures and existing backers Crescendo Ventures,
Enterprise Partners, Institutional Venture Partners, KTB Ventures and Trinity
Ventures. Ensemble designs, manufactures and markets point-to-multipoint systems
operating at frequencies from 10 GHz to 45 GHz for mobile backhaul and broadband
wireless access markets worldwide.

Vernier Networks, which last month added Long Beach Airport to the customers using
its products to manage access points and to control user access on public Wi-Fi
networks, received $24.2 million in Series C financing in 2002 to raise its total
funding to $33.7 million. Allegis Capital and Financial Technology Ventures led
the round, which also included UV Partners and existing investors Doll Capital
Management, Foundation Capital, Masthead Venture Partners and Weber Capital
Management.  Vernier is using the capital to accelerate product development, to
expand sales and marketing efforts, and to fund ongoing business operations.
Symbian added $34 million funding from its existing shareholders --

Matsushita [NYSE: MC], Motorola [NYSE: MOT], Nokia [NYSE: NOK], Psion and Sony
Ericsson in January 2002. It then added $21 million in April when Siemens [NYSE:
SI] signed on as an owner. (Editor's note: Sony Ericsson, the wireless device
joint venture of Sony [NYSE: SNE] and Ericsson [Nasdaq: ERICY], actually has
replaced Ericsson as a Symbian owner.) Siemens' entry into the Symbian fold added
heft to an already strong venture backed by some of the most influential brands in
the business. Symbian has become the dominant operating system for high-end
smartphones, making it difficult for PDA vendors to grab mobile phone marketshare
simply by wirelessly enabling their products.  Alan Dick & Co.'s latest $25
million in VC backing from Lloyds TSB Development Capital shows that young
companies aren't the only operations investors will support. Alan Dick got started
in 1971 serving the broadcast industry before starting a cellular services
division in 1992. Its mobile telecom customer base includes operators Vodafone
[NYSE: VOD], Orange [Paris: OGE] and mmO2 [Nasdaq: OOM] along with such vendors as
Ericsson, Motorola and Nokia.

AAT Communications got a new CEO as well as an additional $100 million in
financing in June 2002. VC firm Cequel III joined existing AAT stakeholder
Charterhouse; its CEO, Jerry Kent, added the same post with AAT to his
responsibilities. AAT's former CEO, William Marraccini, continues as president and
retains equity interest in the company. AAT, launched in 1998, owns, operates and
manages nearly 6,000 wireless communications sites throughout 47 states. The
company is using the additional investment by Charterhouse and Cequel III, which
is focused in the media and telecommunications sectors, to extend its acquisitions
of tower sites.

A year ago, Mesa Communications Group agreed to purchase 16 mobile network towers
in the Biloxi, Miss., and Baton Rouge, La., markets from Gulf Coast Wireless, a
Sprint PCS [NYSE: PCS] affiliate. The deal increased to more than 50 the number of
towers Mesa owns and operates in Gulf Coast markets. The Gulf Coast deal came six
months after Mesa closed a $85 million round of financing, including a $75 million
senior credit facility. The credit facility is led by BNP Paribas and includes
Tyco Capital, GE Capital and Wachovia Bank. In addition, Schroder Ventures US Fund
added $10 million in additional equity to its existing Mesa stake.

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