Bluetooth Makes A Comeback

Copyright 2002 Securities Data Publishing
Private Equity Week...04/29/2002
From LexisNexis

By Carolina Braunschweig
from BroadbandWeek Direct, April 29, 2002

Bluetooth was big, then it was huge, then it was gone, and now it's coming back.

"It was overhyped, but then the hype curve just kind of faded," says Gordon Mella, whose wireless connectivity developer Rappore Technologies of Salt Lake City just scored a $3 million Series C round. "Now there's really real solutions in development and coming to market."

Bluetooth's comeback coincides with a resurgence of interest among investors in the wireless sector. But, unlike the pre-bubble days of hype, investors this time around are asking companies to deliver products and have a targeted line-up of key customers before committing to the deal.

Founded in August 2000 by four engineers with backgrounds at Novell and US Robotics, local early-stage investor EsNet Ltd. seeded the company with a $1 million investment in January 2001. Then in August of that year, Ridgewood Capital of New Jersey came in with a $2 million round of venture funding. Elton Sherwin, managing director with Ridgewood, took a seat on the company's board.

Now, with Rappore's first round of products shipped to Taiwan and Japan, EsNet and Ridgewood were joined by new investor Rocket Ventures, and strategic investors Brycen Co. Ltd. and Matsushita Electric Industrial Co. (Panasonic) in the deal.

Rappore develops software and services that allow electronic devices to communicate without wires. It develops the communication protocol that allows data packets to move from point A to point B - from one PDA to another, for example. Those so-called host protocol stacks' are coupled with Bluetooth profiles that define how a data packet interacts with a mouse or a printer so that the data packet not only travels from one device to another, but that device understands what the data packet means. Then, Rappore writes an application that a wireless device maker, i.e. a PDA maker or a cell phone maker, can use.

The company will use this round of financing to grow its 30-person team, to expand its sales efforts in Asia and Europe and for continued product development.