InnoWave ECI Wireless Systems approached several local venture capital funds in an effort to raise $20 million to $30 million, VC sector sources estimate.

Meanwhile, parent company ECI Telecom (Nasdaq:ECIL) has been looking into the possibility of merging InnoWave with a company in the same field, including local player Alvarion (Nasdaq:ALVR).

Alvarion, created by the merger of Floware and BreezeCom, trades at a $100 million market cap. The company ended 2001 with $183 million cash. Revenue last year came to $99 million, and losses came to $110 million.

Last week InnoWave's financial difficulties became evident when it announced plans to halve its staff of 350 in May in order to cut operating costs. The company is suffering from the severe crisis affecting the wireless access solutions market worldwide.

InnoWave ended the fourth quarter of 2001 with $22.5 million revenue, down from $31 million in the previous quarter. Operating loss widened to $6.6 million, compared with $2.9 million operating loss in the third quarter.

InnoWave dismissed 50 of 400 workers in the second half of 2001, and three months ago cut wages by 15% across the board.