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Israeli chip developer Wisair Ltd. took advantage of renewed optimism in the market for wireless devices for PCs and peripherals to land a $24 million Series D funding led by Susquehanna Growth Equity LLC. The deal expands Wisair's venture capital syndicate to include new investors Advent Venture Partners of London and Bridge Capital Fund LP and Yasuda Ventures, both of Japan. Participating previous investors included Apax Partners LP of Israel, Intel Capital of Santa Clara, Calif., Vertex Venture Capital of Israel, Broadcom Corp. of Irvine, Calif., and the founders of Israel's RAD Group. The round brings total equity investment in the seven-year-old company to $65 million, and is expected to be the company's final private round, with projections of positive cash flow by mid-2010. "The fundraising market was very receptive to the fact that we are the leading UWB [ultra wideband] company to have a single chip product in full production, and investors gave us great offerings," said Wisair founder and CEO David Yaish. "We raised the majority of the money from new investors, which is a good indication that investors and customers see us as the leader." Yaish would not disclose pricing of the deal, but said it came at a healthy premium to the company's $16.7 million third round in January 2006, before it had products on the market. Since that time, Wisair introduced initial chipset products in late 2006 and single chip products in mid-2007. Wisair's products enable UWB wireless traffic over personal computers, peripherals and consumer electronics devices, allowing for much greater bandwidth than WiFi products currently available. Products using UWB technology, which enables short-range, low-power, high-bandwidth radio communication, have been in the market for a couple of years, but are expected to become much more ubiquitous in the next few years as more single chip products become available and costs come down. Dell Computer Inc. of Round Rock, Texas, Lenovo Group Ltd. of Raleigh, N.C., and Toshiba Corp. of Japan all have introduced laptop computers featuring UWB-enabled wireless universal serial bus (USB) technology to eliminate the tangle of cords connecting printers, monitors and other peripheral devices. Analysts expect growth in the market to accelerate as consumer electronics products are similarly enabled. Brian O'Rourke, a principal analyst with research firm In-Stat, projects a market for 20 million wireless USB devices this year, growing to 70 million in 2009. He would not quote figures beyond 2009, but said that after a slow start the market for USB-enabled UWB products has taken off and that growth after 2009 will be even steeper. "The most important driver will be the cost of chips coming down, and the mother lode will be in consumer electronic devices that won't really start until 2009," O'Rourke said. "That will be driven by availability of single-chip products, and while Wisair and Staccato are the only companies to have products now, they all have a roadmap to get there." San Diego-based Staccato Communications Inc. and Wisair have single-chip products available, but devices currently on the market include chipset products manufactured by Wisair, Staccato, and Allen, Texas-based WiQuest Communications Inc., which O'Rourke said has probably been the most successful and plans to produce a single-chip product later this year. Jonathan Klahr of Bala Cynwyd, Pa.-based Susquehanna Growth Equity said that during the firm's due diligence for the current investment, he became convinced that Wisair has a lead on competitors. "We were attracted to the investment by two things: this was one of the best technology teams we have seen, and they executed development on a very tough chip to produce where others have not succeeded," Klahr said. "We talked to a lot of customers that told us this was the cheapest, best-performing product available." Yaish said design cycles for adapters to attach to PCs and peripherals run about six months, while PC design cycles are nine- to 12-months, and consumer electronics devices are 12- to 15-months. The company already is in production with Asian contract manufacturers to deliver products for early devices, but Yaish said large shipments for consumer electronics products such as cameras will begin to ramp up in 2009, putting the company on track to reach profitability in 2010. Wisair raised the new money without using an outside placement agency, and had legal work on the deal from internal lawyers at the RAD Group. Yaron Romem of Yigal Arnon & Co. in Tel Aviv represnted investors. - Clifford Carlsen
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