Intel Capital has made its first investment in a WiMax startup. Intel Capital’s Communications Fund almost slipped under the radar last week when it added its name to Stamford, Conn.-based Motia Inc.’s list of investors.
The company had already raised $6 million from Axiom Venture Partners, Carrot Capital and Kodiak Venture Partners since its founding last year, and last week it added another $12 million of private equity to its capital structure in a deal led by Prism Venture Partners.
It is Motia’s third round of venture funding. The deal comes months after both Motorola and Hawking Technologies said they would incorporate the startup’s smart antennas into their own wireless networks. Motia is still an early-stage venture, but it’s gaining traction in an emerging wireless technology known as WiMax, a last-mile technology that wirelessly delivers broadband into the home.
Intel Corp. is already the technology’s biggest cheerleader. Intel executives chair the WiMax industry forum.
The company is developing a WiMax chipset for carriers that should be available by the second half of 2005, says Intel spokeswoman Laura Anderson. WiMax-enabled laptops should be available by 2007, if all goes according to the chipmaker’s plans. By then, chipsets could retail for as little as $25, according to some estimates.
Maravedis Inc., a wireless industry research group based in Montreal, expects the market for WiMax technology to reach $600 million by 2005 and grow at a steady clip to $1.6 billion by 2008.
Although analysts predict Intel and wireless industry giants like Nokia are likely to dominate the sector, venture capitalists have been trickling into WiMax deals as the technology gains momentum, according to Thomson Venture Economics (publisher of PE Week).
For example, Trapeze Networks, of Pleasanton, Calif., got off the ground in November 2002. To date, it’s raised $50 million from the likes of Accel Partners, CE Unterberg Towbin, Oak Investment Partners and Redpoint Ventures.
Another WiMax startup, WiDeFi of Satellite Beach, Fla., was launched last August with $1.6 million from the Band of Angels, CampVentures, Grace Venture Partners and Inflexion Partners. It raised another $6.8 million in March from a list of investors that includes Aurora Funds, Axiom Ventures and Village Ventures.
Intel would not disclose the size of its investment in Motia. But it rarely invests more than $1 million in a startup and often throws development deals and joint partnerships into the mix, making its backing more lucrative for the startup. It has said it would invest as much as $150 million in wireless industry startups.