In one fell funding swoop, the corporate wireless e-mail market has a new major contender.
Wireless e-mail company Visto Corp. announced it raised an astonishing $50.4 million during an extended, three-month fund-raising round. The news comes shortly after Visto acquired fellow wireless corporate e-mail company ViAir.
“Fifty million is a nice war chest to work from,” said Warren Wilson, practice director at Summit Strategies. “It positions them, resource-wise, ahead of a lot of companies.”
Indeed, Visto’s $50 million score serves to demonstrate the turbulent market for wireless access to corporate e-mail and applications. Some players have boasted of solid successes, including Research In Motion Ltd. and JP Mobile Inc. At the same time, others have been forced to pare down operations, sell to other companies or simply shut down. For example, Qualcomm Inc. recently shut down its Wireless Knowledge subsidiary, folding the company into its business division. Other firms like Mobilocity and 2Roam have been forced to shut down completely. Acquisitions have become the norm, as Nokia Corp., Palm Inc. and others have pushed consolidation by purchasing various wireless e-mail companies.
“Due to the depressed economy, a lot of competitors are acquisition targets,” Summit Strategies’ Wilson said.
And, as the stagnant economy continues to tighten its grip, Visto said it will use part of its new funds to further the consolidation game.
“We think we’ll be consolidating a lot of the niche players,” said Brian Bogosian, Visto’s chief executive officer.
Bogosian said Visto will use its new cash reserves for three main purposes: to support its sales and products, to acquire other companies and to fund potential patent battles. Bogosian said Visto holds a variety of patents related to its wireless e-mail technology, and the company’s new funds will allow it to protect those patents by taking those companies that infringe on the patents to court. Others in the wireless enterprise space have taken similar strategies, including RIM and Pumatech Inc. Bogosian said Visto has not yet begun any legal proceedings.
“E-mail is still one of the important core functions companies look to mobilize first,” Wilson said.
Much like its competitors, Visto offers a range of products to extend corporate applications to wireless devices. The company sells its Visto Mobile Access Solution Server Addition directly to corporations, allowing them to offer businesswide wireless access to information. The company counts Howard Hughes Medical Institute, General Electric and others as customers. Visto also has a major device sales effort, teaming with companies like Palm, Motorola Inc. and Sony Corp. to package its software along with devices. This effort, Bogosian said, helps to seed Visto’s technology by allowing individual employees to set up wireless access to their e-mail. Further, Visto is teaming with carriers including AT&T Wireless Services Inc., Nextel Communications Inc. and others to sell the company’s products.
So far, Bogosian said, Visto counts around 300,000 users.
Although Visto’s $50 million score was the largest by far last week, the company is not the only wireless player to announce funding.
c Messaging company MobileSys Inc. announced $8 million in venture capital and private equity along with a merger with mBlox Ltd., a European text messaging services provider.
c Electronics software platform provider Tao Group announced it scored an additional $9 million in venture funding, bringing the company’s total war chest to $40 million.
c Startup Orative Corp. announced it scored $6 million in venture funding, which the company said it will use to sell wireless communication services to businesses.
c Bermai Inc. received a $12 million B round of financing to support delivery of the company’s 802.11x chipset portfolio starting in the third quarter of this year.
