by Clifford Carlsen
[Posted on November 26, 2007 - 4:58 PM]
E-mail
del.icio.us
Technorati
DiggWireless chip developer Quantenna Communications Inc. doubled its bet on new technology still under wraps, landing $12.7 million in a Series B round led by Sigma Partners of Menlo Park, Calif., to complete development and begin marketing multiple antenna semiconductors late next year.
The Sunnyvale, Calif.-based company also brought in Germany's Grazia Equity GmbH as a new investor, joining returning backers Sequoia Capital and Venrock Associates, both of Menlo Park, to bring total investment to about $25 million.
The deal is expected to allow the company to launch its first products for a broad spectrum of wireless markets, and begin volume production with Taiwan Semiconductor Manufacturing Co. Ltd. as its primary fabrication partner.
Quantenna founder and CEO Behrooz Rezvani said he formed the company in January 2006 to replicate in the wireless industry the success that Ikanos Communications Inc. had achieved in developing chips for wire-line communications. Rezvani had founded Fremont, Calif.-based Ikanos with Sequoia as its largest investor, and left shortly after taking the company public in September 2005.
"When I left Ikanos, I asked, 'What is the missing link in wireless technology?' and set out to find a way to make MIMO [Multiple-Input-Multiple-Output] affordable," Rezvani said. "Wireless still has a lot of issues about reception, speed and reliability, and I wanted to develop chips focusing not only on cost, but on low power, because most MIMO chips now don't go into devices."
So-called MIMO chips accommodate multiple antennas that allow wireless products to transmit and receive multiple signals that can be combined to increase performance, but so far the technology has been widely used primarily in access points and routers in Wi-Fi applications. Rezvani said Quantenna intends to develop chips for a broad array of wireless applications including Wi-Fi, WiMax and next generation cellular technology.
Allen Nogee, principal analyst with wireless technology market research firm In-Stat in Scottsdale, Ariz., said that high-power and space requirements have so far limited the use of MIMO technology, but that it is almost inevitably the next frontier for most wireless applications. So far it has been fairly expensive, but he said demand for faster more reliable data transmission will necessitate a move to the technology.
"MIMO is definitely the future, but it is still probably several years out," Nogee said. "Expectations for faster and faster data rates and better reception are just not going to happen with single antenna technology, and MIMO allows you to combine several signals together and increase the throughput."
Rezvani was cagey about the timing of the company's product introduction, but he said the company will address all aspects of the wireless industry and that it has already been in contact with potential customers in manufacturing of handsets, routers and other devices. He said the new funding will carry the company through an initial product launch next year, and he expects to raise additional capital as soon as the third quarter of 2008.
After forming the company with a small amount of seed funding from Sequoia, Quantenna raised $12 million in a Series A round in June 2006 from Sequoia and Venrock. While Rezvani would not disclose a valuation for the current round, he said it came at a healthy increase over the companies previous round, reflecting its progress in developing prototype products. He said the company shopped the current round to only a small number of firms, but received multiple term sheets for the deal.
Sigma managing director Fahri Diner said he was attracted to the investment based on the record of its management and the opportunity in broadband and mobile wireless markets, and said Quantenna has demonstrated that it can produce potentially disruptive technology.
Rezvani said the company currently has about 40 employees, with most of them in the Sunnyvale office, but he said Quantenna also has about 40 contract employees in India and in the U.K.
Quantenna did not use an outside financial adviser in putting the round together, and had legal work on the deal from Art Schneiderman of Wilson Sonsini Goodrich & Rosati PC in Palo Alto, Calif.
