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Company: RaySat (formerly SkyGate)

HQ: Vienna, VA

Founded: 1997

Management: RaySat has impressive leadership. Its chairman is Yoel Gat, who was cofounder and CEO of Gilat Satellite Networks (Nasdaq: GILTF). RaySat’s CEO and president is Samer Salameh, previously CEO of the satellite services firm rStar and of Prodigy Online, one of the pioneering Internet Service Providers.

Investors: In July 2005, the company raised $27 million with Apax Partners and existing investors. RaySat was restructured in early 2004, when the company changed its name and raised $10 million from Benchmark Capital and Israel Seed Ventures.

Business Model: RaySat has developed a two-inch receiver: a flat antenna that receives satellite television broadcasts and provides Internet access from a vehicle – a car, RV, train, or airplane. For the hardware, consumers can expect to pay $2,000 for TV reception and an additional $1,500 for Internet connectivity. Users who already have satellite TV service in the home will pay only a modest amount to add mobile service. Audiovox, a publicly traded mobile media manufacturer and owner of the Jensen brand, has signed on to resell RaySat’s line of on-the-go antennas.

Competitors: Motosat, KVH Industries, Delphi and Tracstar Systems

Dirt: RaySat’s offerings are so compact and streamlined they make competing products look like they were developed back in the 1960s. With the proliferation of flat panels in cars, the success of XM and Sirius Satellite radio, and the growing demand for Internet access in trains and airplanes, we believe RaySat will explode out of the gates. The market for vehicles equipped with “backseat” entertainment is expected to reach 18 million units by 2008, according to a report by Frost & Sullivan, and we think RaySat could capture a significant slice of that pie. Indeed, the company is predicting an IPO in 2006.

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Tagged: Computing, Communications

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