WiFi venture capital about to hit
February 24, 2006
SAN FRANCISCO & LONDON--(BUSINESS WIRE)--Investments
in wireless technology maintained strong growth recently and are
bucking the general venture capital investment trends that have
witnessed overall decline from 2000 to 2005.
The portion dedicated to wireless investments is on the increase,
and will continue to do so, hitting an all-time high in 2006.
These are the findings from the latest report by telecoms industry
research firm visiongain, entitled "Venture capital in wireless
and telecoms: Funding technology innovation".
Wireless was a significant growth sector for venture capital
investment in 2005. During 2005, 152 wireless-related companies
received $1.3 billion in funding, a 24% increase over 2004's $1.1
Wireless accounted for 7% of total VC investment last year, a
figure that will rise in 2006 and beyond. The bulk of telecom
investment today - around 60% - is in wireless and related technology,
including networking, infrastructure, semiconductors, mobile computing,
content and services.
"Wireless is where the action is and this is a great time
to be a wireless start-up in search of venture funding,"
says visiongain analyst Lynne Gregg.
"The focus of private equity investors is squarely on the
rapidly growing, global wireless market. Longer term, we expect
the movement towards financing wireless start-ups outside the
US to grow, as major funds are earmarking funds for start-ups
in Asian countries, such as China and India."
"As the US public markets remain weak and private equity
investing grows outside the US, we will see many more IPOs of
wireless companies taking place in the public markets outside
the US, such as the London Stock Exchange's AIM," adds Gregg.
Gregg, who has formerly held Director-level positions at AT&T
Wireless and T-Mobile and worked closely advising numerous VC
firms, concludes, "Historically, venture capital investment
has shown strong support for technology-oriented businesses, particularly
companies and industries that develop and rely upon information
technologies. The rationale is simple: these are growth industries.
Most venture capital firms are led by successful high-tech entrepreneurs
or individuals who have successfully financed them."