As capital flows into the wireless space, the companies who are lucky enough to reap the benefits span a wide range of wireless ventures, from infrastructure to content. Among recent deals are those of Conterra Ultra Broadband Inc., which provides wireless connectivity for K-12 educational institutions as well as cellular backhaul via microwave technology; Quattro Wireless, which enables mobile advertising; and Vantrix Corp., which focuses on interoperable solutions for delivering rich media content to wireless phones.
Vantrix and Quattro both recently closed on Series B venture rounds of about $12 million apiece. Quattro went from its Series A to Series B round of funding in less than a year, after raising $6 million in it’s A series. Conterra, meanwhile, recently closed on a $41 million round of private funding led by an undisclosed investment management firm.
All three companies cited a confluence of factors that resulted in their ability to attract financing. Although their markets and business models are different, the qualities investors sought were very similar.
Jason Adkins, Conterra’s executive VP of sales and marketing, said that the company was able to draw investment in part because the cellular backhaul space is expected to explode as operators continue to roll out next generation networks and cope with the increased data traffic that goes along with the faster networks.
Carriers, Adkins said, “are frankly facing a crisis which we’re helping to solve.”
The backhaul market is expected to triple from its current size within the next few years, Adkins said, putting Conterra in a strong position to capture a good share of the market. Similar changes are going on in the educational market, he added, because of the growth in distance learning, and wireless security and surveillance technology that are requiring school districts to re-engineer their networks in the near future.
“A very fast-growing, high-moving space . I think that attracted a lot of attention to fund us,” said Adkins.
Leadership and experience
Andy Miller, CEO of Quattro Wireless, said that the company’s leadership and their track record helped seal their funding deals. Miller and Quattro’s CTO, Eswar Priyadarshan, both were in senior management positions at m-Qube, which was acquired by Verisign Inc. for $250 million early in 2006.
Balance was important, Miller said-not to only have great expertise in engineering or technology. Hence the company’s VP of sales came from Advertising.com, and its CFO has experience in multiple start-up companies.
“We brought in a well-rounded team, both on the advertising side, the publishing side and the mobile side,” Miller said.
He said that venture investors “definitely like to bet on folks who have done this and come through”-although, he added, “I think they also like people who have failed before, who’ve sort of been through the highs and lows and can figure out what to do when those situations arise. And if you’ve been in start-ups, you’ve probably failed at least once.”
Miller added that the level of scrutiny was much higher in the most recent funding round, with emphasis on investors’ formulas and expectations for return on investment.
Business plan
Manish Jha, CEO of mobile media solution provider Vantrix Corp., said that over the course of nearly 50 presentations to potential venture investors (and an investment round that was ultimately oversubscribed), he got the sense that “a lot of folks in the venture capital community are interested in investing in companies that are in the sexy, content-provider kind of space. I get that, because content brands and the brands that people have a passionate relationship with.”
Vantrix, which counts operators such as AT&T Inc. and brands such as ABC News among its clients, was able to appeal to the investors’ interest in content as well as the reality that wireless operators are still the gatekeepers of most content.
“In today’s marketplace, the operators still are the most influential entities in terms of how mobile media is evolving,” said Jha. “The content providers are looking to the operators for direction and frankly relying on them, because by and large most of the content still is heavily managed and distributed by the operators.”
By having both brands and carriers as high-profile customer wins, Jha said Vantrix was in a unique position to appeal to investors-and to establish itself within the industry.
In addition to high-profile customer wins and an emphasis on cross-platform interoperability for rich media services, Vantrix also pointed to its strategy to continue growing and offer platform-agnostic, cross-media services for converged technologies that haven’t made it to the market yet, but are highly anticipated.
Although the company emphasizes mobile, Jha said, it is also going to be talking in the coming months about distribution across multiple platforms-via IMS, IPTV and the like-which operators are planning for and working on, but have not yet rolled out.
“Mobile is hot, and we’re all over it-but one of the things that operators find attractive, and also investors find attractive, about what we’re doing is that we’re doing some very cool and advanced applications for the future of multimedia.”
