Local employer part of biggest recent venture capital deal in U.S.
Nishad Majmudar
Staff writer
(July 25, 2006) — A communications company employing more than 200 people in Henrietta received the largest venture capital deal in the United States during April, May and June, according to a report released Monday.
Current Communications received $130 million in later-stage venture funding during the second quarter, the most active venture funding period in more than four years, according to a venture capital report from Ernst & Young and VentureOne.
Current was the top recipient despite a 40 percent drop in venture funding for the overall communications and networking segment in the quarter.
Current, based in Germantown, Md., develops networks that deliver broadband Internet service over power lines. The venture money came from TXU Corp., a Texas utility company that is installing Current's service, and Sensus Metering Systems.
Overall, venture funding in the United States totaled $6.73 billion in 619 deals during the second quarter, the report said. The amount of capital rose 5 percent from the second quarter of last year, and the deal count increased 3 percent.
"A lot of these companies that are getting investment are companies originally founded back in the dot-com bubble and there really haven't been any exit opportunities for them, so they're hanging around," said VentureOne research analyst Josh Grove. "A lot of these companies that have stuck around are good, strong companies that have had to fight through the down years."
The sectors to experience the largest increases in capital flow were the bellwethers of venture funding: information technology and health care.
Alternative energy attracted a record dollar amount. Investors provided $354 million in capital in 25 deals for energy companies, the highest level of investment ever recorded in that sector.
"This quarter's financing activity shows that venture capital investors are oriented toward both providing their existing portfolio companies with the capital needed to exploit market opportunities and funding emerging sectors with exceptional growth potential," said Joseph Muscat, Americas director of Ernst & Young's venture capital advisory group.
The San Francisco Bay Area continued to lead geographic areas in venture funding, with 207 deals and $2.42 billion invested in the past quarter.
BROADBAND over POWER LINES: new 200 Mbps Technology !!!
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Google-Watchers Watch Current
ReplyDeleteBy Eli Milchman
02:00 AM Jul, 26, 2006
A small developer of broadband-over-power-line technology topped a venture capital funding report for the second quarter, sending tea leaves swirling yet again for Google-watchers.
Rochester, New York-based Current Communications raked in $130 million during the April-to-June period, according to a report from Ernst & Young and VentureOne released Monday.
The new capital came from General Electric; TXU, a Dallas-based energy company; Sensus Metering Systems, a provider of metering systems for utilities; and EarthLink, which has partnered with Google to build a Wi-Fi network for the search giant's hometown of Mountain View, California, and is working on the same for San Francisco.
Google, along with privately owned media behemoth Hearst and Goldman Sachs, are among earlier investors who had previously committed $100 million to Current as of mid-2005.
Broadband over power line, or BPL, which lets users access the internet through any regular power outlet, trails cable and DSL respectively in number of users in the United States. BPL is seen as a potential rival to cable and DSL broadband services, but it has faced criticism in the past for its interference with radio transmissions, particularly ham radio.
Current now offers BPL service in Cincinnati, and is working with TXU to provide BPL in Dallas. The company is also part of a consortium, registered as Pop Wireless, that is participating in the Federal Communications Commission's wireless spectrum auctions scheduled to begin Aug. 9. The auction is being closely watched as a step toward more robust wireless data services.
The real problem with implementation of BPL over a large region will be regulatory rather than technical, said industry analyst Frank Dzubeck, president of Communications Network Architects.
"It's an issue where you've got local regulation that may or may not allow this to occur," Dzubeck said. "This is a very viable technology, but you've still got to get the power lines."
It has been widely speculated that Google is gearing up to become a major player in the ISP game, following its hiring of internet guru Vint Cerf and reports of its acquisition of dark fiber and a large block of internet protocol version 6 addresses. The company has denied it has any such plans.