 |
 |
 |
||||||||||||||
|
 |
 |
 |
|
 |
|
 |
|
 |
|
 |
|
||||
| < 2005 News Listings | ||||||||||||||||
|
By Jeff Bounds Dallas Business Journal April 10, 2005 With an infusion of $15 million, InnerWireless Inc. will double the size of its Richardson headquarters and boost its staff by 50% over the next 12 months, the Richardson high-tech company says. The third round of funding, led by Milwaukee-based Johnson Controls (NYSE: JCI), comes on the heels of contracts InnerWireless is netting from a half-dozen large organizations, including the National Institutes of Health, Houston's ChevronTexaco and the new Baylor Regional Medical Center at Plano. The most recent equity funding, along with an undisclosed amount of debt that InnerWireless hopes to have closed by April 20, are aimed at giving the 100-employee company enough cash to grow aggressively. The company's technology allows wireless devices to be used anywhere in large buildings. "We see this market segment coming into its own over the next two years," says Ed Cantwell, InnerWireless' chairman, president and CEO. "We are fortifying the company from a capitalization point of view." Cantwell says this equity funding will be InnerWireless' last. All told, the firm has raised $50 million since its August 2000 inception. Nearly all of InnerWireless' existing investors participated in the latest round, including Dallas firms Sevin Rosen Funds and Genesis Campus. One new addition was Centennial Ventures, a Denver-based venture firm with expertise in the wireless area and with offices in Houston and Austin. Cellphones, personal digital assistants and similar devices often can't be used in parts of large office buildings and corporate campuses, such as elevators and underground parking garages because of technical and construction limitations in cellular networks. InnerWireless solves the problem by installing its system of cables, antennas and base stations. In some cases, InnerWireless owns the system outright and makes recurring revenue from leasing capacity on its system to parties that want to provide wireless services, such as cellphone companies. An example of that business model is in place at New York's Rockefeller Concourse Center and other public venues with large amounts of foot traffic. In other situations, InnerWireless co-owns the system with the building's manager. The landlord can use the system for its own uses, like paging and fire-safety matters, while InnerWireless can simultaneously lease time to wireless services firms. When selling to large institutions like the government, the client often buys the system outright. However, Cantwell says the company is increasingly moving to either owning or co-owning its system, and offering it like a utility such as air conditioning. Later this year, the company will start using this model with hospitals. Employee, client growth InnerWireless has about 60 customers. It has established a 10-person sales team around one of its biggest customer bases, health care. A sales group of identical size targets InnerWireless' two other main client groups: the government and large corporations. The company's 100-employee staff will grow by 50 over the next year, with the new additions being primarily project managers, engineers and designers. With 30 of the hires occurring in Richardson, InnerWireless is roughly doubling its headquarters space there to 36,000 square feet by taking room adjacent to its Kas Drive location. It expects to move by mid-May, Cantwell says. The company has an office in Hong Kong, as it sees much of its new business opportunities coming from Asia. It is also planning to open a New York City office at an unspecified date and has employees located there and in seven other major cities across the United States. Gartner Inc., a Stamford, Conn.-based market research concern, projects the market for in-building wireless systems will grow from $424 million in 2004 to $1.16 billion by 2008. Of that, the biggest piece, and biggest opportunity, is in selling hardware for the systems, according to Phil Redman, Gartner's Boston-based research vice president, mobile and wireless. Hardware, such as that developed by InnerWireless, will grow from $200 million to $500 million over that span, he says. The second piece of the market, maintenance and service -- essentially keeping installed systems up and running -- will go from $94 million last year to $311 million in '08.The last, implementation, will grow from $130 million to $350 million, he says. Developing hardware is the best growth area largely because it enables players in the space to differentiate themselves, he says. Implementations, he says, are more labor-intensive "grunt work" that can be done by large technical-service firms, he says. InnerWireless has at least two partnerships with service providers for installation work on its system: Norwalk, Conn.-based Emcor Group and Armonk, N.Y.-based IBM. Redman believes InnerWireless is among the top five players in what he calls a crowded industry. He likes InnerWireless' strategy of pursuing big companies and health care concerns, because many are looking to replace older, more complicated systems. Still, he cautions that all players in the space need to focus on differentiating their technology, be it on the types of technologies they support or on supplying antennas that can both send and receive data, rather than just receiving. "Everybody needs to do a better job on building awareness of the capability of the technology in the industry," he says. Competing systems "are looking more and more commoditized." (c) 2005 Dallas Business Journal (c) 2005 MSNBC.com |
|
|
Copyright ©2007 Rho Capital Partners, Inc.