@ TWS: VC firms interested in disruptive tech, security functions

AUSTIN, Texas–Venture capitalists speaking at the Texas Wireless Summit held here earlier this week said they would be interested in funding businesses that drive innovation, including technology that can better enable handoffs between different network technologies, mobile security solutions, multi-radio interference and video optimization.
Venture-capital funding is down from its heights in the early 2000s, said Jackie Kimzey, a general partner at Sevin Rosen Funds, during a panel at the Texas Wireless Summit. About $15 billion likely will be invested in venture capital funds this year, down substantially from the $100 billion invested in the early 2000s. However, that’s not necessarily bad news because fewer funds means less competition for the companies that do get funding.
Venture capitalists have to be patient on their strategies as some of these investments take seven to 10 years before they pay off, either in an initial public offering or through an acquisition. Sevin Rosen has invested in about 250 companies since it was founded in 1981.
New Enterprise Associates is one of the nation’s largest venture capitalists and currently has about $11 billion actively invested, said Paul Hsiao, a partner in the firm. The company has funded 660 firms and 167 of them have gone public.
NEA has a history of backing semiconductor firms, Telegent Systems, which makes chip solutions for free-to-air broadcast TV in mobile handsets, laptops and other portable devices. Telegent has sold 100 million chips, Hsiao said.
Sevin Rosen looks at a lot of semi-conductors, and today is backing some that are “capital efficient,” Kimzey said. One such company is Javelin Semiconductor Inc., which is located in Austin. The company, which has raised about $12 million in funding, is building a 3G power amplifier that uses standard CMOS integrated circuitry, which is cheaper than Gallium Arsenide-based power amplifiers. In an interview with RCR Wireless News, CEO Brad Fluke explained that the company’s employees have a history of innovations in semiconductors using CMOS materials rather than more expensive options. Fluke and many of Javelin employees came from Silicon Labs in 1996 and before that Crystal Semiconductors, which was acquired by Cirrus Logic. Both companies have a history of innovation in using CMOS rather than more expensive materials.
For its part, companies like Qualcomm Inc. (QCOM) use a VC arm for strategic investments. Qualcomm invests between $250,000 and $10 million in companies that it thinks will help it grow the wireless ecosystem, said Nagraj Kashyap, VP of Qualcomm Ventures. The chip maker has had a VC arm for 10 years now, and currently has investments in 40 companies across six global regions.
Some of these companies are on the periphery, and some never actually intersect with Qualcomm’s core vision, but they can still be good investments, he said. For example, Qualcomm Ventures invested in a battery company A123. That company’s battery technology is not being used in wireless, but is applicable to power tools and hybrid cars, Kashyap said. A123 had an initial public offering last year. “So we’ll take it both ways.”
Qualcomm Ventures is holding its global QPrize for the second year. The competition invites companies to compete for the most innovative ideas in the wireless marketplace. The company has put aside $750,000 in seed capital in a series of six regional business plan competitions and one grand prize. Each regional winner from the United States, Europe, India, Israel, Korea and China receives a $100,000 prize, while the grand prize winner gets another $150,000 in funds.