The Magic WordBy now, VCs are slamming the door on any hapless entrepreneur still seeking funds for B2B or (god forbid) business-to-consumer start-ups. But those who show up with business plans containing the magic word wireless get the fatted calf treatment. "There's this sense that wireless is what comes after e-commerce and B2B," says Seth Goldstein, a principal at Flatiron Partners in New York, which established a fund for so-called pervasive computing in late 1998. In the first quarter of 2000 alone, some $622 million in venture funding flowed into wireless-communications equipment and service providers, almost half of the entire amount invested in that category in all of 1999, according to VentureOne. And there's no sign of a slowdown. Last Tuesday, Informio, a spanking-new wireless-services company that allows customers to get access to Internet voice and data from any telephone, announced a $42 million first round of financing. The Lexington, Mass.-based company is still testing its technology with carriers, and has no customers. Tantau Software, a mobile e-commerce player, raised $40 million in a second round of financing on June 13. And, in a still-choosy IPO market, wireless companies remain shoo-ins. Handspring ( HAND), a maker of mobile devices, went public on June 21 with solid first-day gains of 35%. OmniSky, a company that offers a wireless portal for customers of Palm Pilot and other mobile devices, filed on June 16 for an initial public offering, despite only two months of real operating history (see earlier
When Wireless Became HotThe love affair with wireless has been building for years, particularly in Europe. But only in the past few months has it really blossomed in the U.S. You can almost trace the exact moment to late February in New Orleans, the scene of the Cellular Telecommunications Industry Association's Wireless 2000 conference. There, top executives from America Online ( AOL), Microsoft ( MSFT), Sun Microsystems ( SUNW) and other companies proclaimed that wireless devices would overtake PCs in just a few short years.
|Wireless startups: Too much, too soon?|