NEW YORK-Venture-capital investments in telecommunications and wireless companies reached $5.2 billion during the third quarter, a 186-percent increase from the $1.81 billion investment total a year earlier, according to PricewaterhouseCooper’s MoneyTree Survey.
Funding in telecom/wireless companies during the first nine months of 2000 surpassed the total invested in the sector in all of 1996 through 1999 combined, said Kirk Walden, national director of the MoneyTree Survey.
Across industries, the venture-backed investment tally was $17.6 billion, nearly double the $8.9 billion recorded during the year-ago quarter.
The number of individual companies receiving venture-capital financing during the latest complete quarter was 1,283, compared with 1,004 a year earlier. Of these, 240 were in the wireless/telecom sector, where 141 had gained funding during the third quarter of 1999.
About 36 percent of the wireless/telecom companies to receive funding were in their formative stages, having received seed or first-round capital.
These companies accounted for 15 percent of the dollars invested.
By contrast, a collective snapshot across sectors shows that formative- stage companies received $8.13 billion, or 43 percent of total dollars, and comprised 52 percent of all companies gaining capital.
Of the $5.2 billion total most recently invested in wireless/telecom, $3.45 billion went to broadband and wireless service providers. NT Corp., a Pensacola, Fla., provider of integrated communications services, received the single- largest investment, $156 million in fourth-stage capital.
Also up near the top of the chart was Tellme Networks Inc., a Mountain View, Calif., provider of voice-activated Web search engine services for wireline and wireless customers. It received a $113 million investment.
Salt Lake City-based Talk2Technology, which provides voice access infrastructure to network operators, garnered $43 million in first-round private equity.
RealCall, Stamford, Conn., obtained $40 million in second-stage funding for its business, which provides real-time alerting and data-to-voice applications for wireless devices and interactive television.
Voice Access Technologies Inc., which describes itself as a Los Gatos, Calif., developer of voice-recognition “concierge” services for wireless carriers, got $100,000 in bridge financing.
Not surprisingly, companies involved in aspects of Internet content delivery to wireless devices cropped up often in the list of venture investments last quarter.
Among these was Voxeo, a Scotts Valley, Calif., network infrastructure provider for allowing cell phones and telephones to interact with Web-based applications. It received $25 million in second-stage financing.
Ecutel Inc., an Alexandria, Va., wireless virtual private network provider, gained $6 million in first-stage capital.
Some companies are looking past voice and data services to multimedia offerings. One example is ActiveSky Inc., Redwood City, Calif. It gained $20 million in second-round financing for its technology to enable streaming graphics, video and animation over wireless networks. Another, Synovial Inc. of Freemont, Calif., received $2.5 million in bridge financing for its wireless multimedia software solutions.
Communications fusion is the target of still other companies on this quarter’s list. An initial investment of $1 million went to Listman Home Technologies, Roswell, Ga., whose software facilitates the convergence of Internet appliances, wireless networks and residential Internet service.
“Investments were spread all across the industry and touched practically every facet of the industry … (including) equipment and wireless infrastructure companies,” Walden said.
This quarter’s PWC MoneyTree Survey included responses from 707 venture capitalists. Further information can be obtained at www.pwcmoneytree.com
