Kada Systems To Close $2.6M Series B

On Tuesday, Nov.12, Kada Systems Inc. is expected to announce that it has closed its second round of funding. Previous investors JK&B Capital and Network Angel Capital invested $2.6 million into the round – the valuation of which Kada Chief Executive Jim Acquaviva characterizes as “pretty much sideways” from the last round.

Kada develops Java platforms for mobile device applications. Acquaviva says the company currently focuses on building its market-share with Asian original mobile device manufacturers (ODMs), and the company has used its relationships with a few American companies to elbow its way into that market.

For example, Texas Instruments Inc. is among the Kada’s announced relationships. Acquaviva says Kada provides the Java stacks for the chipsets TI pitches to the ODMs. Kada has also announced a relationship with Cisco Systems Inc., which will carry Kada’s software on a voice-over Internet protocol phone to be released in the middle of next year. And, Acquaviva says the company will announce another relationship with a chipset manufacturer this fall.

“It’s must-have technology that enables a very significant trend towards richer technology in the mobile market,” says JK&B Partner Tom Neustaetter. Neustaetter says JK&B has been involved with the company since 2000 when it had three employees and a technology.

“It is progressing right on track,” he says. The company currently employs 25 people, including 20 developers, adding a developer each month. He expects products with this technology to be on the market by the middle of next year.

Acquaviva says Java-enabled phones offer application developers significant advantages over non-Java systems, and platforms like Kada’s offering allow developers to design applications at the Java level without worrying about the phone’s native operating system.

“The developer does not have to worry about what the device’s characteristics are,” Acquaviva says. He says that since the Java platform sits on a layer above the phone’s operating system, the basic operations of the phone won’t be affected by glitches in applications that run on the Java platform, and the Java platform prevents application vendors from having to customize their products to the devices’ various video capabilities.

Since this software runs on mobile devices, it must operate on limited memory resources and operate at high speeds. The company claims its products operate at the necessary speeds while occupying the requisite small footprint.

“This is software which enables these applications to run in a very constrained, difficult environment,” Neustaetter says.

Acquaviva declines to reveal the company’s burn rate or revenue, but he has said that he expects this $2.6 million round of financing to carry the company for a year.

“We wanted to take just what we needed to exploit the opportunities available to us and present ourselves to the marketplace again as these relationships mature,” Acquaviva says. This round brings the company’s total venture financing to $10 million, and he says, “There is high probability it will take us to break-even.”

Contact Charles Fellers