Magis Networks Inc. may not be a recognizable brand name just yet, but its coterie of strategic investment partners form an elite group of top names in business and technology: AOL Time Warner Ventures, Motorola, Hitachi, Matsushita and Paul Allen’s Vulcan Ventures are among those betting on Magis being the next big thing in wireless chip sets.
Together, they helped Magis close an oversubscribed $40 million Series B financing round. Magis, a leader in wireless chipsets, develops products that enable wireless communication of TCP/IP data, video and audio throughout the home and office. It will use the money for a planned product launch.
To that end, the San Diego-based firm recently hired Bill Dahnke as vice president, product management and support. In this role he has overall responsibility for Magis’ advanced product strategy, as well as providing technical support to its customers. Dahnke has 20 years of experience in consumer and commercial communications product development and rollout.
“The [fund-raising] process did take about nine months because we took initial investment from our original VC’s, but then we really wanted to get the strategic players in and that’s a longer process, especially in this tough environment,” said Founder and CEO Clarence Bruckner.
Magis has developed a chip set that enables the wireless transfer of high-quality video, data and voice in real time. With beta testing this fall and shipping planned for the middle of next year it, Magis is looking bring this version of a wireless network to consumers and has sought ought partners that position them to do so.
Typical of Magis’ strategic partnership arrangement is the deal with Matsushita, which markets brands like Panasonic. Under the terms of the investment, the two companies intend to develop a strategic alliance that will include joint development and promotion of wireless networking products, and efforts toward adopting Air5 as an industry standard.
Magis’ technology also has clear application for cable providers. AOL Time Warner and Charter Communications (through Paul Allen’s Vulcan Ventures) together represent over 50% of the cable subscribers in the U.S. In Motorola, Magis has a leading manufacturer of set-top boxes for cable television and with partnerships among consumer electronics manufacturers Magis can be made compatible with the products from the end user to the service provider.
Len Leader, president of AOL Time Warner Ventures, says providing wireless video fits with AOL Time Warner’s interactive services objectives.
“A key thing about our technology is that you could have video conferencing to a laptop or a PC,” Bruckner said. “Other technologies – the existing 802.11 standards – do not have that real-time ability.”
No leader was named for the funding round and the company would not specify the amounts contributed by individual investors.
While this round could take Magis to profitability, Bruckner said a mezzanine round was possible. In addition to the strategic investors, WK Technology Fund, China Development Industrial Bank and each of the original investors participated. Bob Puette, a partner at WK Technology Fund, took the only board seat awarded in the round.
Formed in October 1999 with $1 million in seed money, Magis closed an $11 million Series A financing in May 2000 with Vulcan Ventures, Bay Partners and Crescendo Ventures all investing.
Contact Michael Taylor at: Taylormj01@yahoo.com