Reports

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Venture Capital Funding Quarterly

Telecom • Wireless • Mobile • Communications

3rd Quarter, 2008 – United States

Published by: VentureDeal

Summary

Telecommunications, Wireless, Mobile and Communications technology startups raised $375 million during Q3 08, a reduction of 38% from the previous quarter. 45 companies received funding, a decrease of 36% quarter over quarter. This continues and accelerates the recent downward trend of lower funding for the four sectors in the aggregate.

As the one bright spot, Mobile companies continue to show financing amount growth throughout the funding downturn. Wireless firms continue to receive the greatest funding amount between the four sectors.


Funding Activity

Telecom

The Telecom sector showed a dramatic reduction in funding, with a 69% decline in funding amounts and a 58% reduction in the number of companies funded during the quarter. As in the previous quarter, two companies received the lion's share of the funding. Aktino raised $14.2 million in its third round of venture capital financing. The company sells a bonded copper solution for telecommunications providers in the Ethernet and legacy broadband service markets.

Fonality secured $12 million from venture capital firm Draper Fisher Jurvetson and strategic investor Intel Capital. The company said it would use the funding proceeds for expansion purposes. Fonality provides affordable telecom solutions for businesses with 5 to 500 people per location.

Two other Telecom fundings during the quarter received close to $2.5 million each:
Alfalight $2.5 million
Telovations $2.3 million

Wireless

18 Wireless technology startups raised $179 million during the quarter, a decrease of 48% in dollar volume and a decrease of 45% in the number of companies receiving funding versus the previous quarter. This reverses a previous trend of consistent and healthy growth in the sector.

The largest financing during the quarter was WildBlue Communications, which received $50 million. The company offers high-speed Internet access via satellite and is focused on rural and underserved markets. WildBlue said that it would use the funding proceeds to expand its equipment leasing program for customers and expand its customer service posture.

RadioFrame Networks raised $28 million in its series F venture equity and debt funding round. A large syndicate of investors made the investment, which will be used to "fund operations and development targeting their rapidly growing femto and picocell market opportunity."

InnerWireless secured $2 million during the quarter. The company offers a converged in-building wireless platform for enterprises that "guarantees both wireless coverage and signal strength.” The company was founded in 1998 and claims more than 100 customers and a large syndicate of venture capital investors.

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