August 24, 2004 - VentureWire.com
Ottawa Citizen
Andrew Mayeda
Business Spotwave Wireless Inc., which makes equipment that improves wireless reception in buildings and vehicles, has dialed up another $7 million in venture capital.
The deal is the third in Ottawa to close this quarter and the latest sign that venture-capital activity is picking up.
Ottawa firms have landed $60 million since July, already surpassing the $53.6 million raised in the second quarter, according to the Ottawa Centre for Research and Innovation.
Last month, optical gear maker Tropic Networks Inc. and voice-over-IP software pro-vider Natural Convergence Inc. raised $41 million and $12 million, respectively.
Spotwave has now raised about $30 million in four rounds of financing, including a seed investment. The company also announced yesterday it has secured a $5-million line of credit from the Royal Bank of Canada.
President and chief executive Shane Young said the company will use the money to capitalize on surging demand among phone carriers and enterprise customers.
The firm's SpotCell line of products plugs the gaps in coverage that users of cellphones and other wireless devices often experience inside buildings or when underground.
The technology uses a "smart" antenna to identify incoming signals and amplify them.
Spotwave has deployed more than 2,000 of the systems for such major phone carriers as Telus Mobility, Rogers Wireless, Verizon Wireless, Sprint and Cingular. Carriers, use the technology to address trouble spots in their customers' wireless coverage.
Sales have picked up this year after a tough couple years in the telecommunications sector, said Mr. Young. He expects sales to triple this year, though he declined to disclose revenues.
"It's a welcome relief from the last couple years. While we've done pretty well, it's been no fun selling. It feels good now that things are starting to move forward. There's really some momentum building."
Spotwave employs about 50 people in Ottawa and 10 sales staff in the United States. Mr. Young doesn't plan to significantly increase staff.
He said the firm will proceed cautiously, building up its sales and marketing capability and enhancing customer service. Eventually he would like to expand in Asia, then Europe. But for now, the company is focused on North America.
"The next six to 12 months will be critical," he said.
The latest venture round was led by international player Newbury Ventures and VenGrowth Capital Partners of Toronto.
They were joined by Primaxis Technology Ventures, Venture Coaches (since merged with Skypoint Capital), Venturelink Fund, Growthworks WV Funds and RBQ Ltd.
Copyright Ottawa Citizen 2004.
