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Wireless retail equipment maker Altierre Corp. today is expected to announce a $22 million Series C round that will bring its total venture capital raised to $52 million. Galleon Group of New York led the round; insiders D. E. Shaw Group of New York, DuPont Capital Management of Wilmington, Del., ATA Ventures of Redwood City, Calif., Kinetic Ventures of Chevy Chase, Md., and Labrador Ventures of Palo Alto, Calif., also participated. The San Jose, Calif., startup is developing radio frequency identification-based hardware and software platforms for retailers, primarily supermarket chains, that enable the user to dynamically change prices and sale information throughout the store. Altierre claims that its yet-to-be-released technology will improve price accuracy and reduce costs and paper waste, while improving communication with consumers. "We've been working with a few retail partners for several years under signed agreements," said Altierre chairman and CEO Sunit Saxena. "Once the system was working, word got out, and we've seen overwhelming interest from several customers." The company plans to focus on the supermarket industry initially because "the supermarket chains are the ones that churn the prices the fastest, have the lowest margins and are the toughest entities," said Saxena. "So once we succeed there, it's a much easier entry into other verticals." Altierre estimates that more than $40 billion is spent annually worldwide implementing price changes in the food, drug and mass-retail segments, including $10 billion by the U.S. supermarket industry alone. The company said it has been co-developing its wireless dynamic pricing solution with several of the top 10 U.S. grocery chains and has signed agreements with some of them. After the supermarket chains, Altierre plans to focus on large mass-market retailers, although he said the systems can be tailored to any size store. Altierre sells an entire turnkey system that includes all of the software, hardware and RFID tags that customers need. It also employs third-parties to install the systems in stores. "Retailers have their retail job to do, and they don't want to be data system integrators, that's part of the problem with the whole RFID supply chain," Saxena said. "People have been coming up with components and [the retailer's] IT has a massive headache trying to figure out" which technologies are compatible. "We've taken all the guesswork out of that--its an end-to-end system," he continued. "The system and tag batteries last for about five years and the payback [for the retailer] is in about one to two years." The round's proceeds will allow Altierre to expand its production and manufacturing operations, as well as ramp up hiring in sales and engineering ahead of the release of its technology within the next few months, Saxena said. The company has 70 employees, up from 35 about a year ago. Saxena said he does not foresee the need for more capital, although he left the door open to another growth round, should Altierre need to accelerate its growth rate. The current round came at an increase in valuation to that of the prior funding, he said. Although Saxena was confident that Altierre's offerings will be in high demand, he was leery of overextending the company. "We're being a little selective, taking on only a few partners to ramp up," he said. "Do we want to take on 10 customers all at once? Probably not. We may take three or four, and have more in the hopper, but we don't want to get too far along until we get to a certain stage of revenue." Founded in March 2003, Altierre's last venture round came only 11 months ago, when the company closed a $17 million Series B round. Its first institutional money came in a $13 million Series A announced in January 2005. DLA Piper represented the company in the transaction, while the investors turned to Gibson, Dunn & Crutcher LLP.-- George White
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