Led by London-based venture capital firm TLcom Capital Partners with Jerusalem Venture Partners and Magnum Communications Fund also participating, mobile wireless hardware firm CellGlide closed a $10 million Series B round this week. It brings the total raised by the London-headquartered startup to $20 million since being founded in September 2000.
Mobile wireless carriers are banking on data to carry them through their next stage of growth. The carriers expect at least 25% to 30% of their revenue to come from Web pages, photos, video clips in the coming years. The problem so far is that their networks can’t support it. While Europe’s wireless GSM(Global System for Mobile Communications) networks can handle the bandwidth of thousands of simultaneous voice calls per cell, it bogs down when as few as two people per cell try and transmit bandwidth-hungry data, says JVP general partner Laurel Bowden, who did the deal for JVP from its London office. “Mobile carriers are desperate to be able to leverage data services,” she says.
That’s where companies like London-based CellGlide come in. CellGlide, using technology developed by its Israel-based engineering group, has come up with hardware that “shapes” data over networks. The hardware looks at available bandwidth and prioritizes the data according to preset parameters and rates set by the carrier. A streaming video clip from an earnings call might get priority and cost more than a download of a photo of a prized Yorkshire terrier, for example.
CellGlide has had limited trials of its technology with Europe’s three largest wireless carries, says CellGlide CEO Liron Langer. The tests have been a success, he says and anticipates a full-scale trial in Europe by early 2003. “We expect to be generating revenue quite soon,” he says.
While not as advanced as Korea and Japan, Europe’s GSM network is more developed than the United States and it is in Europe where CellGlide’s initial customer focus is, Langer says. GSM subscribers worldwide are expected to surpass one billion by the end of 2003.
The CellGlide technology is compatible with the current network technology and anticipates the transition to the next-generation GPRS (General Packet Radio Service) network. GPRS promises a higher capacity service geared toward mobile email, color Internet browsing and location-based services in the coming slew of mobile gadgets. But will people pay for this stuff?
In Japan and Korea data services have already taken off. Europeans are crazy for text-messaging, but it remains to be seen whether they will shell out their Euros for additional data services. Perhaps the biggest unknown is the U.S., which has been much slower to take up any of the mobile offerings.
Langer expects to make inroads first in Asia and then in the U.S. “I think there won’t be any GPRS presence [in the U.S.] until sometime near the end of 2003.”
JVP had a busy week also closing a $5.5 million Series F round for its long-held portfolio company Teleknowledge. The round was led by investors 3i, Jerusalem Venture Partners, and Tamir Fishman Ventures.
Teleknowledge helps Internet portals devise strategies to generate money and sells software that then automates the billing process. Ofer Segev, CEO of TeleKnowledge, says the money should take the company to profitability in 2003.
Contact Michael Copeland