ITRAN Communications, an Israeli start-up specializing in developing solutions for communications over power lines, has signed an agreement for a joint venture with three Japanese companies. The identity of the companies was not disclosed, but ITRAN said that one was a provider of computerization solutions, another was a manufacturer of computer system accessories, and the third was a distributor of such products. ITRAN will hold 32% of the venture and will receive $5 million, of which $3 million will be reported as revenue and $2 million invested in the company at a $54 million company value, before money. ITRAN anticipates that it will receive another $10 million in revenue from the venture next year.
ITRAN has already signed an agreement for a joint venture with the Kansai Electric Power Company, the world’s eighth largest electricity producer, and Matsushita Electric Works, a leading Japanese wiring and information device/system provider. Kansai will hold 51% of the venture, called Linecom, ITRAN will have 43%, and Matsushita 6%. ITRAN will supply the venture with its chips, designed for transmitting data over electricity networks at 24 Mbps. Matsushita will design and manufacture the systems, and Kansai will provide access to its customers. Revenue from this agreement is also estimated at $5 million, $2 million of which was transferred to ITRAN when the deal was signed. In April 2001, ITRAN signed an OEM agreement with Mitsubishi. Under the agreement, ITRAN will receive $3 million, plus royalties on components to be manufactured by Mitshubishi, based on ITRAN’s chips. ITRAN also supplies chips to a joint venture of Microsoft, General Electric, and SMART in the smart home appliance field.
According to the report about its most recent investment, ITRAN’s company value is much smaller than the value it claimed in its financing round, which begun a few months ago. At that time, sources close to the company estimated its value at no less than $80 million, compared with a $54 million value in the current deal. The company is apparently going ahead with its capital raising, while guaranteeing its revenue from the ventures in which it is partnering.
President and CEO Avner Matmor and company chief scientist Dan Rafaeli founded ITRAN in 1996. The company has raised $12 million to date, including the investment reported today. Investors in the company include Microsoft and the Argoquest, MVP, and Technoplus funds. The company employs 60 staff in its Beer Sheva, Tel Aviv, and Florida offices.
Published by Israel's Business Arena on October 18, 2001