Broadband Financing Slows

If you want a high-speed Internet connection while relaxing on your sailboat or while commuting to work on a train, then you’ll be interested in two companies that announced venture investments last week.

Navini Networks raised a $30 million Series D funding led by Lehman Brothers Venture Partners. Austin Ventures, Granite Ventures, Sequoia Capital and Sternhill Partners also participated. The round brings Navini’s funding to date to $115 million. Past investors that didn’t fund the Series D include Intel Capital and a slate of Internet Bubble-era corporate investors, such as TI Ventures and Silicon Valley BancVentures. The company raised a $25 million Series C deal last year. Navini gives users broadband connections without DSL or a cable modem.

Meanwhile, RaySat, a McLean, Virginia-based company, raised a $10 million Series A round from Benchmark Capital and Seed Partners. RaySat says its satellite antennas can give users high-speed Internet access as well as satellite entertainment services while in a moving vehicle.

The two deals offer hope to the non-Wi-Fi wireless broadband space. So far this year, private equity deals in wireless broadband companies have taken a plunge, according to Thomson Venture Economics (publisher of PE Week). Thomson Venture Economics counts only about $35 million in private equity deals in wireless broadband in the first six months of 2004, a $60 million drop for the same period the year before. In all, private equity investors pumped more than $152 million into wireless broadband companies in 2003, about $30 million more than in 2002.

At the time of Navini’s Series C round, Charles Golvin, a Forrester Research analyst, told PE Week that the wireless broadband market is a tough one to penetrate, because the spectrum bands on which it operates have been segmented and must me marketed regionally.

Recent moves by Richardson, Texas-based Navini appear to address this factor. The company has set up varying partnerships with local providers, such as Alcatel in France and Tri-State Broadband in the Southeastern U.S. Navini opened an office in China this past April that focuses exclusively on the Asian market.

Unlike Navini, RaySat supplies Internet-enabling antenna that allow mobile broadband access. The company plans to use its Series A funding to break into the “rear-seat entertainment” market, focusing on enabling live satellite TV broadcasts to moving vehicles, such as luxury SUVs. The company already provides broadband and broadcast services to the European passenger train market.