UWB Startup Scores $31.5M

It appears that the ongoing ultrawideband (UWB) standards quandary hasn’t scared off investors. Alereon, an Austin, Texas-based startup, said Tuesday that it has secured $31.5 million in venture capital funding, the largest investment yet in the industry.

Austin Ventures led the Series A round. Additional investors included Centennial Ventures, Pharos Capital, and Kinetic Ventures. The company, a spinoff of UWB pioneer Time Domain, said it expects to close a small amount of additional funding early this year.

Alereon will use the funding to complete product development on its UWB chipset and for sales and marketing efforts, said Jeff Ross, the company’s executive vice president. He said the financing would carry the company through the end of 2005 and “well into initial revenues.”

The chipset combines a UWB radio with a media access control (MAC) layer, baseband, antenna and software. It’s designed to wirelessly connect consumer electronics devices, PCs, PC peripherals and mobile devices at very high speeds (over 100Mbps), over short distances, using low power. The company plans to begin sampling the chipsets in the third quarter, and ship them in the fourth quarter.

The fact that Alereon is offering a complete package sets it apart, Ross said. “Where the other companies are just doing a MAC or just doing a radio, we’re doing the whole thing.”

The chipsets will be based on the UWB specification from the Multiband OFDM Alliance (MBOA), an industry group whose members include Intel, Texas Instruments and Alereon. Many expected that specification to become the basis for the IEEE 802.15.3a standard for high-speed, short-range wireless networking (it still may be), but pressure from a rival group led by Motorola has led to a stalemate in the voting process.

The MBOA is moving ahead with its spec, though, with or without the IEEE’s blessing. The group plans to release a draft specification in February, followed by a final release in May and expects MBOA-based products to hit the market in the first half of 2005. While the MBOA will continue to lobby the IEEE for its proposal, it now seems that the spec isn’t likely to be ratified until it proves itself in the market.

Ross said that while he of course would prefer to have IEEE approval before shipping the chipset (the next IEEE meeting is next week in Vancouver, British Columbia, but most industry watchers don’t expect any break in the deadlock), he’s not concerned about going to market with a pre-standard product.

“The reason that you need a standard is to ensure interoperability, ensure that there will be multiple sources, and ensure that you’ll have market momentum. Right now, we have 42 companies backing the MBOA standard. We have seven of the 10 largest semiconductor companies in the world, all of the consumer electronics companies, all of the PC companies — anyone you could mention, except Motorola. We not only have all the suppliers, … we have all the customers as well. So we’re fairly sure the MBOA meets those criteria.”

He called MBOA compliance “the next best thing” to IEEE approval. “It should provide sufficient comfort to the suppliers and the customers that they can move forward.”

Alereon has several partnerships in place, according to Ross, but he could not disclose any details. “We will be making some announcements probably toward the end of the second quarter,” he said.

For now, he said, the company is focusing on PC peripherals such as printers, video cameras and storage devices. “We think the adoption will be quicker on the PC side than on the CE side, and that’s simply because if you look on the CE side, there’s about five companies that drive the market. On the PC side, there’s a single company — Intel.”

Research firm Parks Associates also believes that UWB will find early success in the PC industry as a cable replacement technology. A recent study predicted that PCs and peripherals will account for 70 percent of UWB-enabled devices in 2005, while fixed CE devices such as set-top boxes and high-definition TVs will comprise only 5 percent. However, the study indicated that UWB will eventually catch on in the fixed CE space and ultimately overtake the PC market by 2008.

In the meantime, Ross said that Alereon will contemplate improvements to its chipset. For starters, he said, there’s room to grow in the three-band radio; adding more bands could produce higher data rates. He also noted that the company will probably move from a two-chip solution to a single-chip CMOS product.

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