Reports

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Venture Capital Funding and M&A Quarterly

Telecom • Wireless • Mobile • Communications

1st Quarter, 2009 – United States

Published by: VentureDeal

Summary

Telecommunications, Wireless, Mobile and Communications technology startups raised $421 million during Q1 09, an increase of 10% from the previous quarter. 36 companies received funding, a decrease of 45% quarter over quarter. Previously, these four sectors showed a flat trend of funding in the aggregate. The current quarter indicated the first increase in funding amounts in several quarters.

As one bright spot, Telecom companies continued to indicate strong financing volume growth, while Mobile firms showed the sharpest decline in percentage terms of funding (-47%) among the four sectors.


Funding Activity

Telecom

The Telecom sector showed a dramatic increase in funding, with a 283% improvement in funding amounts but a 50% decrease in the number of companies funded during the quarter. As in the previous quarter, relatively few companies received the lion's share of the funding.

The primary funding event during the quarter was for Zayo Bandwidth, which received $128 million in its series B round of venture capital financing from a large syndicate of venture capital and private equity firms. Zayo says that it provides bandwidth, voice and managed services to carrier, enterprise, SME and government organizations.

VeriVue raised $65 million in a new funding round. The Westford, Massachusetts-based telecom company sells a portfolio of what it calls Media Distribution Switches that let telecom providers push high throughput video technologies closer to the edge of their networks.

Wireless

9 Wireless technology startups raised $71 million during the quarter, a decrease of 41% in dollar volume and a decrease of 59% in the number of companies receiving funding versus the previous quarter. This continues a recent trend of funding amount decline.

The largest financing during the quarter was for SkyCross, which received $23 million. The company is developing what it calls the next generation in RF technology for a variety of mobile and fixed markets. This funding was led by Investor Growth Capital and included other undisclosed investors.

Onset Technology raised $3 million from a syndicate of Israel-based investors. This Waltham, Massachusetts-based has created METAmessage, a smart phone compliance software application designed for law firms, financial services and other professional services companies.

Exalt Communications secured $15 million during the quarter in its third round of institutional venture capital financing. The company provides next-generation backhaul services to wireless service providers and enterprise customers.

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