Clearstone Leads SiNett Deal

The need for unity between wireline and wireless networks is a strong enough pull for investors that a wireless local area network (WLAN) company without a product on the market can raise sufficient capital in difficult environments.

SiNett, which develops WLAN silicon and software, is an example of this need. SiNett, which was founded in 2002, expects to release its first products in the second half of this year. In preparation for its launch, the Sunnyvale, Calif.-based company raised $15 million in an oversubscribed Series B round of funding. The deal is expected to be announced June 14.

New investor Clearstone Ventures led the round with approximately $6 million for 45% of the round. Previous investors Alliance Ventures and Matrix Partners invested pro-rata.

The company raised $8 million in a Series A round last May. The company says the latest round was an up round from the Series A and a source familiar with the deal says it has a post-money valuation between $40 million and $50 million.

SiNett was founded by Shekhar Ambe, who serves as CTO, Shiri Kadambi, who is president and CEO and Shrikant Sathe, who is vice president of marketing and operations. Ambe and Kadambi were founders of Mavrick Networks, which they started in 1997. Maverick was acquired by Broadcom in 1999. Sathe served in engineering and management positions with Cadence, Infineon Technologies and Intel.

While the company will have to operate on a tight timeline and offer its products at very competitive prices, Clearstone partner Sumant Mandal says that the company’s main competitors have not yet offered the kind of unifying services that SiNett does.

The company has 40 employees, including those at its research and development facilities in Bangalore, India. It plans to employ more than 60 by the end of the year, with most of the new hires working on research and development. SiNett projects its revenue reaching between $3 million and $4 million next year.

The deal is the latest investment in the WLAN space. Earlier this year Waltham, Mass.-based Chantry Networks raised $11 million in a Series B round led by Ventures West and Tatara Systems of Acton, Mass. raised $8 million in a second round of institutional backing from Highland Capital Partners and North Bridge Venture Partners. Late last year Lexington, Mass.-based Legra Systems raised $12 million in Series B funding led by Duchossios TECnology Partners.