Totally Wireless Raises $14M for Portal

After spending more than ten years as a brick-and-mortar retailer of wireless products and services, Totally Wireless of Fremont, Calif., raised $14 million in its first institutional round of venture financing.

U.S. Venture Partners of Menlo Park, Calif., led the round with a $6 million investment in the Series B offering. U.S. Venture Partners had declined to invest in Totally Wireless as a traditional retailer two years ago, said Chief Executive Mike Merrill.

Alta Partners and Alta Communications, both brought in by Sirrius Financial of Minneapolis, each contributed $4 million in the round. The company previously received funding from angel investments.

As part of the deal, Magdalena Yesil of U.S. Venture Partners, Garrett Gruener of Alta Partners and William Egan of Alta Communications will join the company’s board of directors.

“We originally planned a nationwide expansion,” Merrill said. “With the future of brick-and-mortar retailers unclear, we decided to invest in developing and marketing our site and get into launch mode.”

The company’s Web site, which is currently operational, will be fully implemented by the end of the year, Merrill said.

Totally Wireless sells cellular phones and modems, pagers and long distance and information services. In 1996, Totally Wireless was the first retailer to have non-exclusive distribution relationships with more than one carrier. The company has established relationships with major carriers including AT&T Wireless Services, Sprint PCS, and Qwest Communications.

“Unlike most Internet startups, Totally Wireless has long-term relationships with major carriers,” said Alta Principal Ravi Chiruvolu. “They have done a lot of necessary things on the back-end which is the hardest to overcome.”

Totally Wireless may raise another round of private financing prior to a likely initial public offering, although Merrill said the company is in no need of cash.

“I can execute just fine with what I have,” he said. “In terms of getting out there and more aggressively building our brand, it might behoove us to go public or make a strategic move.”