Wireless chip co Runcom raises $10m

The company has apparently shelved immediate plans for a Nasdaq flotation.

After a long period without any investment and with question marks being raised over 4G networks, wireless chip company Runcom Technologies Ltd. is set to announce the completion of a further financing round. Sources inform ''Globes'' that the company is raising $10 million from UK technology venture capital fund TLcom Capital LLP. This is Runcom's second official financing round, after it previously raised finance in 2000 from Vertex Venture Capital and Concord Ventures. The latest round will bring the total raised by Runcom to $18 million.

Runcom, founded in 1997 by CEO Dr. Zion Hadad, was one of the companies behind the development of Orthogonal Frequency Division Multiple Access (OFDMA) technology. The standard enables the transmission of a greater volume of data transmitted by any wireless carrier by dividing the frequency into sub-frequencies. The OFDMA standard is also considered the basic technology for both WiMAX and the rival LTE standard, and will probably be viewed as the fourth generation of cellular (after CDMA).

Runcom sells chips for computing and mobile devices (such as handsets, modems, set-top boxes and others), and also base station cards for telephony operators. It also provides consulting services. The company's first large customer was Samsung Electronics Co. Ltd. (KSX:5930). It was reported a year and a half ago that the company intended to float on Nasdaq towards the end of 2007 or in early 2008. Runcom's value in a possible listing was not clear although the company claimed that a value of around $500 million was feasible. Things have changed since then. Wall Street is now off-limits to early stage companies and progress in WiMAX has also been delayed slightly.

Runcom is headquartered in Rishon LeZion and employs 120 people. It ended 2007 with sales of $20 million, and it was profitable. The company said in the past that it aimed to double its sales to $40 million in 2008. Runcom came 3rd in the Deloitte Touche Brightman Almagor Fast 500 company rankings, after it posted 4,846% growth over the last five years.

Published by Globes [online], Israel business news - www.globes-online.com - on September 1, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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