Startup Roundbox today announced $8 million in its first round of venture funding, news that coincides with the company’s emergence from stealth mode. Headed by executives from Dynamicsoft, Flarion Technologies Inc. and Microsoft Corp., Roundbox is positioning itself directly within the nexus formed by TV and wireless.
“We’re really excited about the market opportunity we have,” said Dennis Specht, the company’s founder and chief executive officer. “This is going to create a new world of applications.”
Founded in July 2003, Roundbox hopes to sell software to carriers and handset makers that supports broadcast technologies. Such technologies allow users to tune in to text, audio and video content. Unlike Verizon Wireless’ Vcast video-on-demand service, broadcast technologies provide streams of content that users can tap into-much like truck drivers do when they switch on a country radio station.
“We believe it’s going to create a whole new class of services and will change the way people use their phones,” said Specht, who also founded Dynamicsoft. Cisco Systems Inc. last year acquired Dynamicsoft for around $55 million.
Specht explained that Roundbox’s software would support both in-band and out-of-band broadcasts. In-band broadcasts work inside a carrier’s wireless data network, like Verizon’s Vcast service or Sprint Nextel Corp.’s MobiTV offering. Out-of-band services are those based on technologies like Qualcomm Inc.’s MediaFLO or the DVB-H standard. Out-of-band broadcasts run separately from a wireless carrier’s network and send content to a phone that has a suitable receiver.
Specht said Roundbox’s software would support a variety of innovative broadcast applications. For example, he said, phone users in a new city could tune to a broadcast about hotels in the area. Or a traffic channel could broadcast information about routes out of a congested area. Carriers could even sell ringtones and games over specific content channels.
“It’s really a software management system that can be either nationwide or geographically targeted,” Specht explained.
However, Specht largely declined to provide additional information on Roundbox’s service. He would not discuss the company’s business model, including whether it would charge handset makers for its software or sell only to carriers. He also declined to provide specifics on the company’s software offering, including when it would be available or how it would work inside a carrier’s network. Specht also did not provide specifics on Roundbox’s business, including its financial situation or even how many employees it has.
Nonetheless, Specht continued to boast about the company’s market and revenue potentials.
“We’re pumped about the market opportunity,” he said.
Core Capital Partners and RRE Ventures participated in Roundbox’s funding. Tom Wheeler, former head of the Cellular Telecommunications & Internet Association, is a special partner at Core Capital.
“Before wireless video and audio services can realize their full potential, it will be necessary to meet the business and technical needs of the carriers,” Wheeler said in Roundbox’s announcement. “The Roundbox platform allows carriers to maximize channel capacity on their existing networks while also allowing carriers to offer seamless service from other networks.”
Roundbox is betting on an area that has generated a significant amount of interest within the industry. Sprint Nextel has been introducing a variety of radio and TV broadcast services through its CDMA 1xRTT network. And Qualcomm has pledged $800 million to build a dedicated mobile TV broadcast network using its MediaFLO technology. Tower company Crown Castle International Corp. has announced similar intentions using DVB-H technology.
Industry forecasters are getting into the game too. Juniper Research predicts there will be 65 million mobile TV users worldwide by 2010, generating a total of $7.6 billion during that year.
“One thing is certain: Mobile TV is not just regular TV scheduling made available on the move via a mobile device,” research and consulting firm Current Analysis recently wrote. “Consumers want a wide choice of channels, but they want to be able to personalize this to make access easy and manageable.”
